by the pandemic. On Monday, Wells Fargo said it expected to reduce its dividend from its current level of $0.51 per share when it reports second-quarter results on July 14. It was the only big bank to announce a reduced dividend; the others, including Citigroup, Bank of America and JPMorgan Chase, are leaving theirs unchanged.
The Fed’s warning of looming uncertainty was reiterated by another regulator, the Office of the Comptroller of the Currency, which warned in a report on Monday that the coronavirus pandemic has created so much extra work for banks that they are at risk of falling down on basic requirements like reporting customer activity to credit bureaus and rooting out fraud.
The regulator, which oversees the country’s largest banks, released the report as part of its routine assessments of the industry. It said programs created by Congress to try to prop up the economy, including a $650 billion aid package for small businesses that was structured as a series of forgivable loans, put special stresses on banks just as they were grappling with volatile financial market conditions and widespread lockdowns that forced many of their employees to work from home.
“This could cause breakdowns in controls related to account management, servicing management, flood insurance coverage, credit bureau reporting, and complying with applicable laws and regulations,” the report said.
The regulator also warned banks to keep a close eye on loans to homes and businesses that could be in jeopardy because of the economic shutdown caused by the pandemic, and to watch out for fraudsters looking to take advantage of the sudden shift to work-from-home to find weaknesses in banks’ security systems. — Emily Flitter
Another economic adviser is leaving the Trump administration.
Bimal Patel, a senior Treasury official and close aide to Treasury Secretary Steven Mnuchin, is leaving the department this week, the latest departure of a top member of President Trump’s economic team.
The exodus comes at a pivotal moment as the Trump administration and lawmakers in Congress have been debating the framework for another economic stimulus package while cases of the coronavirus are surging around the country and the economy is struggling to shake off a recession.