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Morning Briefing

Morning Briefing

US authorities have reached a record $33 million settlement with New Jersey-based Hudson City Savings Bank over allegations that the lender discriminated against minorities by withholding mortgages.

The authorities claim that in a practice known as 'redlining' Hudson City avoided giving credit access to those living in predominantly minority neighborhoods between 2009 and 2013. "We allege that Hudson City's redlining practices illegally cut off opportunities for consumers in predominantly black and Hispanic neighborhoods to get a mortgage and achieve the dream of homeownership," Consumer Financial Protection Bureau Director, Richard Cordray, said in a press release.

The Justice Department said there could be more cases to come against banks over redlining.

Also in the US, a District Judge has ordered that Deutsche Bank must face a $190 million lawsuit by the US government over alleged tax fraud 15 years ago. The judge rejected Deutsche's arguments that the government had waited too long to sue and failed to state a legally sufficient claim.

India's new private sector lender, IDFC Bank, is targeting 15 million customers within five years as it builds a bank "unlike any other".

"It is now possible to build a distribution architecture that is much lighter, much less costly and with handheld technology can deliver financial services right to the rural community", executive vice-chairman and managing director, Rajiv Lall, said in an interview with the Hindu.

Mr Lall said the bank carried out a comprehensive survey: "One of the findings was that people don't like bankers. Second was that by and large customers felt their bankers were not treating them with respect." The bank will commence operations on 1 October.

Japanese financial group, Nomura, has reached an agreement with Italy's Banca Monte dei Paschi di Siena over a multimillion-dollar derivative transaction known as the Alexandria Notes, one of a number of tactics used to conceal the Italian bank's difficulties by transferring risks to other banks. The settlement is expected to cost Nomura $287 million.

Nomura said in a release that it ''does not accept allegations made against it or admit any wrongdoing in connection with the settlement."

Kenya's Ecobank has introduced its first ever prepaid cards to the market, with the roll-out of the Ecobank Salary PrePaid Card and the Ecobank Travel PrePaid Card.
The cards are Visa-branded and will target Ecobank customers and non-customers.

Banks in Korea have begun to introduce "financial department stores," which are intended to be one-stop shops for all financial requirements.
KB Financial Group yesterday launched a branch covering four major segments — banking, securities, life insurance and non-life insurance — in Yeouido, Seoul.

The simultaneous operation of "life and non-life units at a bank branch" is a market first, according to a group spokesman: "We will focus more on sufficient consideration of customer needs and their wider choice on a mid-term basis, rather than seeking a short-term performance."

Wearable payments start-up, Kerv, has launched a crowdfunding campaign to bring its contactless payments ring to market. The company, chaired by former Ukash CEO, David Hunter, is looking to raise £77,000 on Kickstarter as mass production capital for the ring, which will retail at £49.99.

A UK coroner has called for the rules governing payday loans to be overhauled after a teenager killed himself on the same day that payday lender Wonga emptied his bank account.

Kane Sparham-Price, 18, hanged himself after he was left penniless when Wonga took out a payment due under his loan agreement. His death prompted the South Manchester Coroner John Pollard to write to the Financial Conduct Authority (FCA) warning that similar deaths would occur unless action was taken. Mr Pollard called for the introduction of a minimum sum which lenders must leave in accounts to "avoid absolute destitution".

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