SEC Investigating Goldman Sachs ESG Mutual Funds
<p>The U.S. Securities and Exchange Commission
(SEC) is reportedly investigating the asset management arm of banking giant
Goldman Sachs as part of its heightened scrutiny of asset funds that focus on
environmental, social, and governance investment standards. According to a <a href="https://www.wsj.com/articles/sec-is-investigating-goldman-sachs-over-esg-funds-sources-say-11654895917?mod=latest_headlines">Wall
Street Journal</a> report, sources familiar with the matter have said that the
investigation is civil in nature and is apparently examining the firm’s
ESG-focused and clean energy funds.</p>
<p>The news comes on the heels of a May <a href="https://www.reuters.com/markets/us/us-sec-unveil-rule-crackdown-funds-greenwashing-2022-05-25/">announcement</a>
of an SEC proposal offering rule changes designed to tighten restrictions on
requirements for ESG fund claims to ensure greater standardization in marketing
and investment disclosures. That proposal was developed in response to concerns
by activists that U.S. fund managers were mislabeling funds as ESG in an
attempt to attract environmentally conscious investors.</p>
<p>According to the SEC, the new rules would
impact roughly three-quarters of funds and prevent them from including ESG
labels in their names if the funds were not truly focused on ESG investment
concerns. The new disclosure requirements have been advertised as a way to
ensure that investors receive timely and accurate information about each fund’s
ESG strategies, including disclosures in annual reports, prospectuses, and
brochures used by financial advisors. </p>
<p>The rules would also require any fund that
uses the ESG, low-carbon, or sustainable label to demonstrate that at least 80
percent of its investments are targeted to certain ESG-approved industries and
companies. </p>
<p>Goldman Sachs has told regulators that its
ESG offerings already commit to that 80 percent target by maintaining the bulk
of investment assets in stocks that align with fund criteria. That target
number does not include companies and industries that primarily make or sell
products that fail to satisfy ESG standards, such as coal, oil, gas, weapons,
and tobacco.</p>
Read more >>Canada’s VersaBank Makes Bid to Acquire U.S. Bank Charter with Purchase of MN Bank Branch
<p>Ontario-based Canadian bank VersaBank has <a href="https://www.versabank.com/versabank-to-acquire-occ-chartered-national-us-bank-providing-platform-for-growth-in-the-united-states/">announced</a>
its bid to purchase a single U.S. bank branch in Holdingford, Minnesota for
$13.5 million. If the offer is approved by U.S. and Canadian regulatory
authorities, the purchase would provide the digital bank with lucrative U.S.
bank charter and access to the American banking market. According to a press
release this week, the acquisition will also provide the Canadian company with
roughly $60 million in assets.</p>
<p>The Holdingford bank that VersaBank wants
to acquire is a subsidiary of Stearns Financial Services and maintains a
charter from the Office of the Comptroller of the Currency. If the deal is
approved by regulators, Stearns Bank Holdingford will operate under a new name,
VersaBank USA, N.A.</p>
<p>While the purchase would provide the
Canadian firm with new financial assets, the acquisition of an OCC charter will
likely prove to be the bigger prize. For most financial firms, acquiring an OCC
bank charter can be a costly and time-consuming application and approval
process. As a result, recent years have seen a rise in fintech firms’ interest
in purchasing community banks in an effort to gain access to charters without
undergoing that complex process.</p>
<p>One notable example is San Francisco’s
LendingClub fintech firm, which purchased Massachusetts-based Radius Bank early
in 2021. In February 2022, another San Francisco firm, ScoFi, completed a
similar deal, with its acquisition of Golden Pacific Bancorp.</p>
<p>VersaBank President and CEO David Taylor
said that the acquisition of the Holdingford branch would enable his company to
bring its successful digital operation to customers throughout the United
States:</p>
Read more >>Biden Pick for Fed Banking Supervision Role One Step Closer to Senate Confirmation
<p>The Senate Banking Committee voted 17-7 on
Wednesday afternoon to approve President Joe Biden’s nomination of Michael Barr
to serve as the vice chair of banking supervision at the Federal Reserve. The
bipartisan vote saw five committee Republicans join with 12 Democrats to send
Barr’s nomination to the full Senate, where his confirmation is likely to
receive final approval.</p>
<p>Biden’s first pick for the post, Sarah Bloom
Raskin, was forced to withdraw her nomination after opposition from the entire
Republican caucus and West Virginia Democrat Joe Manchin left her without the
confirmation votes needed in an evenly divided Senate. Raskin had drawn fire
for various controversial actions, including her perceived support for using
the Fed’s regulatory powers to influence lenders to boycott loans to energy
firms.</p>
<p>During Senate testimony, Barr seemed to
discount any major Fed role in addressing climate change and instead focused on
its important mission of fighting rising prices and “bringing down inflation to
the Federal Reserve’s target of 2%.” When asked about the Fed’s role in forcing
the banking industry to confront climate change concerns, Barr suggested that
central bank had no power to tie credit allocation to that industry’s climate
change contributions.</p>
<p>If, as expected, Barr is confirmed by the
full Senate, he will become the Fed Board of Governors’ top regulator. As the
vice chair for supervision of the banking industry – a position created by the
2010 Dodd-Frank financial regulations, which he helped to design while working
for former President Obama’s Treasury Department – Barr would be charged with
overseeing regulation for the complex U.S. financial sector, while also
exercising a permanent vote in future Federal Reserve policy meetings.</p>
Read more >>
