Mitsubishi UFJ Financial Group Inc. sued New York’s banking regulator to prevent it from supervising the company. Starting this week, it has switched to federal oversight for its state branches. The news was first reported by Reuters.
On Nov 8, New York regulator announced that the bank and its New York branch will continue to be under its supervisory. The Japan-based lender has filed a complaint in the Manhattan federal court to stop the enforcement of the order passed by the regulator.
U.S. Office of the Comptroller of the Currency (OCC) has said in a letter that it has given Bank of Tokyo-Mitsubishi the license to convert its branches in New York, Illinois, Texas and California into federally regulated branches. So, per the complaint filed by the lender, the federal US banking laws state that the OCC’s powers are superior to the individual state regulator’s powers and thus, violate the law.
Incidentally, the New York regulator had earlier taken action against some lenders. They were charged for inappropriately managing transactions involving the countries, which are subject to US sanctions. In 2013 and 2014, Mitsubishi’s subsidiary, Bank of Tokyo-Mitsubishi, had to pay $565 million as penalties.
Per a spokesperson for OCC, the bank has the power to select under whose regulation it wants to function. OCC is a popular choice among all the banks, as its present comptroller, Keith Noreika, has promised to minimize financial rules and help in economic development.
Shares of Mitsubishi have gained 14.8% over the past year, underperforming the industry’s rally of 23%.
The stock has seen the Zacks Consensus Estimate for current-year earnings being stable over the last 30 days. As a result, the stock currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same space are Erste Group Bank AG (EBKDY - Free Report) and Shinhan Financial Group (SHG - Free Report) , both sporting a Zacks #1 Rank (Strong Buy), and The Bank of N.T. Butterfield & Son Limited (NTB - Free Report) carrying a Zacks #2 Rank (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
For Erste Group, over the past 30 days, the Zacks Consensus Estimate has been revised 16.6% upward for 2017. Its share price has increased 41.1% over the past 12 months.
Shinhan Financial has witnessed an upward earnings estimate revision of 8.5% for 2017, over the past 30 days. Its share price has risen 12.4% over the past 12 months.
Bank of N.T. Butterfield & Son has witnessed an upward earnings estimate revision of 2.2% for 2017, over the past 30 days. Over the past 12 months, its share price is up 26.1%.
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