Latest news with #reputationalrisk
Yahoo
a day ago
- Business
- Yahoo
US lenders weighed reputation rules, not politics, in closing accounts, sources say
By Nupur Anand and Saeed Azhar NEW YORK (Reuters) -Decisions by some major U.S. banks to close accounts were based on rules around reputational risk, people familiar with the matter said, pushing back on President Donald Trump's accusation that he and his conservative supporters were denied services for political reasons. Trump on Tuesday renewed his criticism of JPMorgan Chase and Bank of America, saying they discriminated against him by refusing to accept hundreds of millions of dollars in deposits. While banks have been careful not to contradict the president directly and provoke his ire, two industry sources cited regulations under the former President Joe Biden's administration that forced them to weigh reputational risks as the reason lenders have dropped clients or avoided others. The sources declined to be identified because of the sensitivity of the matter. One bank was concerned about this issue when dealing with Trump because of his legal woes during the Biden administration, the first source said. Spokespeople for JPMorgan and Bank of America both said they do not consider political affiliations in banking decisions and welcomed Trump's efforts to change regulations. A source familiar with the matter said that JPMorgan continues to have a banking relationship with members of the Trump family and it also banks a number of campaign accounts linked to Trump. The White House did not immediately respond to a request seeking comment. BIDEN ERA RULES Under the Biden era, regulators who oversaw the banks would judge the lenders' compliance with the rules, which banks said were based on subjective judgments by government supervisors, the first industry source said. Banks were also concerned about whether regulators would punish them for providing services to individuals who faced legal proceedings, like Trump, the first and second sources said. The main U.S. bank regulators -- the Federal Reserve, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency -- have all directed its supervisors this year to stop considering reputational risk when examining banks, a metric that had drawn industry complaints for being too subjective. "The heart of the problem is regulatory overreach and supervisory discretion," the Bank Policy Institute, an industry group, said in a statement. A looming executive order expected as early as this week would instruct regulators to review banks for "politicized or unlawful debanking" practices, according to a draft reviewed by Reuters. Banks also plan to use the current debate to push the government to clarify anti-money laundering laws and establish a clear federal standard on fair access to financial services, the third source said. NOT ISOLATED Trump's criticism echoed longstanding "debanking" complaints from Republicans, who have accused Wall Street banks of "woke capitalism," as well as denying services to gunmakers, fossil-fuel companies and others perceived to be aligned with the political right. Earlier this year, the Trump organization sued Capital One for closing 300 accounts related to the group. The closures came after thousands of Trump supporters stormed the U.S. Capitol on January 6, 2021. Capital One declined to comment beyond its earlier legal filings. Trump also drew headlines in January when he blasted banks for debanking at a gathering of business leaders in Davos, Switzerland. Paul Chesser, director, corporate integrity project at the conservative-leaning National Legal and Policy Center (NLPC), cited former Kansas Governor and Senator Sam Brownback as among the conservatives who were debanked by JPMorgan and other banks. Brownback wrote in the New York Post that JPMorgan had abruptly canceled his newly opened account for the National Committee for Religious Freedom in 2022. The JPMorgan spokesperson said the decision to close the accounts was not related to politics. "The Senator is fully aware why his accounts were closed," the spokesperson said, without elaborating on the reasons for the closure. Brownback told Reuters he had been given five different reasons by the bank for the account closure and was not certain what the final explanation was. NLPC has raised debanking concerns with BofA and JPMorgan through shareholder proposals, which were not included in the banks' proxies, Chesser said. Bank supervision by government regulators is a mostly confidential process that limits banks from explaining to clients why they are declined services. "Customers should not be in the dark about why they are being de-banked," said Chesser. "Nobody got any explanation. They're totally left in the dark. And that is probably the number one priority." Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Reuters
a day ago
- Business
- Reuters
US lenders weighed reputation rules, not politics, in closing accounts, sources say
NEW YORK, Aug 7 (Reuters) - Decisions by some major U.S. banks to close accounts were based on rules around reputational risk, people familiar with the matter said, pushing back on President Donald Trump's accusation that he and his conservative supporters were denied services for political reasons. Trump on Tuesday renewed his criticism of JPMorgan Chase (JPM.N), opens new tab and Bank of America (BAC.N), opens new tab, saying they discriminated against him by refusing to accept hundreds of millions of dollars in deposits. While banks have been careful not to contradict the president directly and provoke his ire, two industry sources cited regulations under the former President Joe Biden's administration that forced them to weigh reputational risks as the reason lenders have dropped clients or avoided others. The sources declined to be identified because of the sensitivity of the matter. One bank was concerned about this issue when dealing with Trump because of his legal woes during the Biden administration, the first source said. Spokespeople for JPMorgan and Bank of America both said they do not consider political affiliations in banking decisions and welcomed Trump's efforts to change regulations. A source familiar with the matter said that JPMorgan continues to have a banking relationship with members of the Trump family and it also banks a number of campaign accounts linked to Trump. The White House did not immediately respond to a request seeking comment. Under the Biden era, regulators who oversaw the banks would judge the lenders' compliance with the rules, which banks said were based on subjective judgments by government supervisors, the first industry source said. Banks were also concerned about whether regulators would punish them for providing services to individuals who faced legal proceedings, like Trump, the first and second sources said. The main U.S. bank regulators -- the Federal Reserve, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency -- have all directed its supervisors this year to stop considering reputational risk when examining banks, a metric that had drawn industry complaints for being too subjective. "The heart of the problem is regulatory overreach and supervisory discretion," the Bank Policy Institute, an industry group, said in a statement. A looming executive order expected as early as this week would instruct regulators to review banks for "politicized or unlawful debanking" practices, according to a draft reviewed by Reuters. Banks also plan to use the current debate to push the government to clarify anti-money laundering laws and establish a clear federal standard on fair access to financial services, the third source said. Trump's criticism echoed longstanding "debanking" complaints from Republicans, who have accused Wall Street banks of "woke capitalism," as well as denying services to gunmakers, fossil-fuel companies and others perceived to be aligned with the political right. Earlier this year, the Trump organization sued Capital One (COF.N), opens new tab for closing 300 accounts related to the group. The closures came after thousands of Trump supporters stormed the U.S. Capitol on January 6, 2021. Capital One declined to comment beyond its earlier legal filings. Trump also drew headlines in January when he blasted banks for debanking at a gathering of business leaders in Davos, Switzerland. Paul Chesser, director, corporate integrity project at the conservative-leaning National Legal and Policy Center (NLPC), cited former Kansas Governor and Senator Sam Brownback as among the conservatives who were debanked by JPMorgan and other banks. Brownback wrote in the New York Post that JPMorgan had abruptly canceled his newly opened account for the National Committee for Religious Freedom in 2022. The JPMorgan spokesperson said the decision to close the accounts was not related to politics. "The Senator is fully aware why his accounts were closed," the spokesperson said, without elaborating on the reasons for the closure. Brownback told Reuters he had been given five different reasons by the bank for the account closure and was not certain what the final explanation was. NLPC has raised debanking concerns with BofA and JPMorgan through shareholder proposals, which were not included in the banks' proxies, Chesser said. Bank supervision by government regulators is a mostly confidential process that limits banks from explaining to clients why they are declined services. "Customers should not be in the dark about why they are being de-banked," said Chesser. "Nobody got any explanation. They're totally left in the dark. And that is probably the number one priority."
Russia Today
2 days ago
- Business
- Russia Today
Biden administration pressured top US banks to cut out Trump
The administration of former US President Joe Biden pressured some of the country's biggest banks to sever ties with Donald Trump, the New York Post reported on Tuesday, citing anonymous sources. Speaking to CNBC earlier this week, Trump said that JPMorgan had told him he had to withdraw hundreds of millions of dollars in assets, and that Bank of America declined to accept the funds when he attempted to transfer them. Trump did not elaborate on the timing or circumstances, but the Post, citing anonymous sources, has reported that the events possibly occurred after he left office in 2021. According to the outlet, the banks were pressured by the White House in response to Trump's role in the January 6 Capitol riot, which occurred on the day Congress was set to certify Biden's victory. At the time, Trump insisted that the election had been 'stolen' from him by the Democrats. 'Think back to what it was like being Trump back in 2021; he was a hot potato after January 6 and the regulators made it clear to us that we shouldn't do business with him,' an unnamed banking executive told the newspaper. A JPMorgan official said that regulators 'put the fear of God in you if you did business' with people like Trump. According to the report, the US Office of the Comptroller of the Currency and the country's Federal Reserve scrutinized financial institutions under rules requiring them to weigh reputational risks tied to their clients. Critics have previously accused US banks of discriminating against conservatives and cryptocurrency-linked businesses, under those guidelines. The Wall Street Journal also reported this week that the Trump administration had prepared a draft executive order aimed at penalizing banks that engage in such 'de-banking' practices. The order could be signed by the president as soon as this week, the paper said.
Globe and Mail
25-07-2025
- Business
- Globe and Mail
After viral Coldplay kiss-cam video, advice for workers on when private relationships become your employer's concern
Is there still a line between your private affairs and accountability to your employer? In the age of viral videos and online sleuthing, what happens away from work can derail an executive's career as quickly as what happens in the boardroom. Just ask Andy Byron, the now former chief executive of tech company Astronomer, who abruptly resigned last week after being shown embracing the company's chief people officer, Kristin Cabot, on the Jumbotron at a Coldplay concert near Boston. The pair's frantic reaction after appearing on the big screen during a kiss-cam moment prompted Colplay's frontman, Chris Martin, to joke that they were probably having an affair. As it turns out, that appears to be true. Mr. Byron resigned shortly afterward, likely to avoid termination, and Ms. Cabot was placed on leave. The viral Coldplay kiss-cam video shows digital sleuthing can go too far The fallout raises legal questions: when do Canadian employers have a right, or even the obligation, to intervene in consensual relationships between employees, especially senior ones? When two senior executives are involved in an apparent affair, the reputational risk to their employer can be significant. It calls into question their judgment, integrity and values – and, by extension, their ability to lead. Key figures such as a CEO or chief people officer are often closely tied to a company's brand and public image. This places them in a fiduciary role, meaning they are legally obligated to prioritize the company's best interests. If a fiduciary's private conduct becomes a matter of public scrutiny, it can damage the company's reputation, sometimes irreparably. As a result, employers often react swiftly when executives face public allegations of misconduct or online shaming, even if unrelated to their positions. Despite that those allegations may later be disproven, damage or potential damage to a company's reputation alone may sometimes be great enough to justify immediate dismissal, potentially without severance. Even consensual office romances can lead to disputes, sexual harassment complaints or retaliation claims. Where one employee holds power over the other, such as in a reporting relationship or with influence over promotions or compensation, the employer's right to intervene becomes more evident. These relationships carry a high risk of perceived favouritism during the relationship or retaliation if it ends. Many companies treat such relationships between managers and subordinates as serious business risks and have established policies requiring disclosure so appropriate steps can be taken to protect the company and those involved from misconduct claims. Some companies even go further and prohibit such relationships altogether. If a company adopts such a policy, then any violation can be treated as a disciplinary matter and, depending on the circumstances and severity of the violation, can also lead to cause for dismissal without severance. In the absence of a formal workplace dating policy, many companies have detailed codes of conduct that attempt to regulate workplace behaviour. Those codes of conduct are usually broad enough to capture situations of an actual or perceived conflict of interest, which can often arise when a senior employee becomes romantically involved with a more junior one. In a high-profile case last year, the Royal Bank of Canada dismissed its chief financial officer for just cause after being tipped off to an alleged affair with a subordinate. The bank claimed she breached its code of conduct by engaging in an undisclosed personal relationship that allegedly resulted in preferential treatment, including raises and promotions. Both parties denied the affair and any favouritism, but the case will likely turn on whether the code of conduct was breached and whether the breach was serious enough to justify the bank's reaction. How employees respond to internal investigations also matters. When a complaint involves harassment, discrimination or retaliation, employers are legally required to investigate. That usually starts with interviews and fact-finding missions. If an employee is dishonest during this process, refuses to answer questions or retaliates against someone who made a complaint, that alone is often grounds for dismissal for cause without severance even if the initial infraction would not have led to that result. The key takeaways for employees are that engaging in a consensual relationship with a colleague can become their employer's business, particularly if they are in a senior role or are having a romantic relationship with a more junior employee. Concealing that relationship, especially where it may give rise to a real or perceived conflict of interest or violates company policy, may be grounds for termination without severance. Employees in positions of authority and influence are held to an even higher standard. They must assume their personal and private interactions, even in a dark corner at a Coldplay concert, are not beyond their employer's scrutiny. Daniel A. Lublin is a partner at Whitten & Lublin, representing clients in workplace legal disputes. He can be reached at Dan@
Times
13-07-2025
- Business
- Times
The businesses using journalists to protect their reputation
A t the height of the pandemic, two journalists working at Dow Jones decided to use skills honed over years of reporting to address a novel but growing challenge facing businesses — reputational risk. Justin Williams, a former editorial executive at The Daily Telegraph, and Sophie Elsworthy, a journalist and former elite athlete, founded InsightX in 2020 as lockdown shuttered businesses. The London-based agency has taken a novel approach to due diligence, using investigative journalism to treat every target, whether it be a sponsor, celebrity or supplier, as a potential front-page story. In doing so, it is addressing the growing issues of reputational contagion, a new type of risk that is increasingly occupying decision-makers at big corporations and brands, alongside more prosaic concerns about solvency that have commonly formed the bulk of due diligence work.
