Beloved Institutions—Facebook And Banks—Discuss How To Increase Their Popularity

Mark Zuckerberg wants to know your credit card balances. What could possibly go wrong?
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Facebook wants you to use Messenger more. And also buy and/or sell more stuff on it. Really, anything to get you to spend more time on its platform so that investors stop shaving hundreds of billions of dollars from its market cap.

ZuckerWolf

Fortunately for Mark Zuckerberg & co., they know exactly how to do it: Get access to all of your more sensitive financial information. And having shown its responsibility with and ironclad security over user data, it should have no problem convincing some of America’s other most trustworthy companies, banks, to hand it over. I can see no problem with this at all for either party, or for the happy customers caught in between.

Facebook increasingly wants to be a platform where people buy and sell goods and services, besides connecting with friends. The company over the past year asked JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc. and U.S. Bancorp to discuss potential offerings it could host for bank customers on Facebook Messenger, said people familiar with the matter.

Yes, who wouldn’t want to see Facebook and Wells Fargo team up to give you just what you wanted, even if you don’t know you want it (and especially if you don’t know you already have it)?

One large U.S. bank pulled away from talks due to privacy concerns, some of the people said.

Well, just tell me which bank that is and I’ll move all of my money to Wells and refinance my house with a new mortgage from Citi.

As part of the proposed deals, Facebook asked banks for information about where its users are shopping with their debit and credit cards outside of purchases they make using Facebook Messenger, the people said….

“Like many online companies, we routinely talk to financial institutions about how we can improve people’s commerce experiences, like enabling better customer service,” Ms. Diana said. “An essential part of these efforts is keeping people’s information safe and secure.”

Yes, yes, of course. We trust you. Why wouldn’t we? Maybe you can also find a way to get Duane Reade to tell you exactly what I was buying with my debit card, as well, so as to further improve my commerce experience with that not-at-all sensitive or potentially embarrassing information. You probably already have my Social Security number, so that should be no problem. Just put it all through the algorithm along with my web browsing history and television habits from my cable provider and the geolocation data you’re mining from my iPhone and whatever else you’ve got on me. You’ll know me even better than I know myself! And stop worrying so much about “getting ahead of the public and legal fallout” from your data collection. If you’re comfortable enough to be asking banks for my credit card balances so soon after that fake news Cambridge Analytica thing, you must be pretty confident that we the consumers and our elected representatives have no especially strong concerns about such things.

Facebook to Banks: Give Us Your Data, We’ll Give You Our Users [WSJ]
Tech Firms, Embattled Over Privacy, Warm to Federal Regulation [WSJ]

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Facebook Will Take Free Money From Banks But Don't Expect It To Show Any Gratitude

The Wall Street Journal today discovered that universal banks that lend money to companies for cheap tend to want investment banking business in return for that lending and I guess that's a scandal: As the market for technology IPOs revs up and the biggest banks seek to capitalize on the size of their balance sheets, the practice of selecting underwriters that also provided loans is coming under focus, spurred by Facebook's IPO process. Critics of the practice say the choices aren't accidental and reflect the "you-scratch-my-back-I-scratch-yours" way that Wall Street works. Bankers, for their part, say they aren't allowed to make loans on the condition that they receive other business, but borrowers can use the loans as a factor in choosing underwriters. Some bankers say that lending is just one of the many services they offer companies. At Facebook, the credit line played a role in the batting order for underwriters, said a banker who worked on an underwriting pitch to the company. When I was young and naive and pitching for underwriting business against banks that did lots of lending, I always thought that banks "aren't allowed to make loans on the condition that they receive other business, but borrowers can use the loans as a factor in choosing underwriters" thing was ripe for a scandal. I still sort of think that: I just do not believe that no client coverage banker has ever said "we'll be in your credit facility but only if you promise us underwriting or M&A business." (Some people agree with me!) And, as the Journal notes, that would be a criminal violation of the antitrust laws, which is unspeakably weird but there you go. But if you ask a banker who has been carefully and recently briefed on anti-tying regulations, he will probably tell you something like "we don't demand underwriting business to provide a loan. Companies demand loans to get underwriting business." And, as the Journal says, that's not illegal.