Wells Fargo Lawsuit, PayPal's Crypto Expansion, Mifflinburg Bancorp Merger, OpenAI Restructure

Banking on Disruption Daily

In today's episode:

- Wells Fargo faces another lawsuit over its cash sweep program, accused of breaching fiduciary duties by offering low interest rates on client cash balances. The SEC is investigating the firm, which has announced an interest rate hike on sweep deposits expected to reduce revenue by $350 million annually.

- PayPal Holdings now allows U.S. merchants to buy, hold, and sell cryptocurrency directly from their business accounts, excluding New York State. This update aligns with growing business demand and includes the introduction of PayPal USD on the Solana blockchain.

- Mifflinburg Bancorp and Northumberland Bancorp announce a merger, aiming to increase scale and efficiency, marking another consolidation in the community banking sector.

- The FDIC proposes new recordkeeping mandates for banks holding deposits from nonbank companies, with CFPB Director Rohit Chopra endorsing the move to address risks posed by nonbanks in consumer deposits and payments.

- The FDIC's Office of Inspector General calls for stronger conflict of interest training within the agency. Eight recommendations aim to enhance internal controls following a congressional investigation.

- The CFPB invites public comments on Financial Data Exchange’s application for recognition as an open banking standard-setter, focusing on inclusiveness, transparency, and due process.

- OpenAI plans to restructure into a for-profit benefit corporation to appeal more to investors while maintaining its mission to benefit everyone. This move includes offering CEO Sam Altman equity in the new structure.