Risk Channel delivers the latest, most relevant and useful business intelligence to key decision makers and influencers, each weekday morning.

American consumers' expectations about the risk of debt delinquency have risen to their highest level in more than four years, according to a new report from the Federal Reserve Bank of New York. Its September Survey of Consumer Expectations showed that the average perceived probability of missing a minimum debt payment during the next three months increased for the fourth consecutive month to 14.2%, the highest level since April 2020 when it was 16.1%. Outside of the pandemic, last month's reading was the highest since January 2017. The probability of losing one's job in the next 12 months was flat in September when compared with August, though the probability of voluntarily leaving a job ticked up from 19.1% in August to 20.4% in September, the highest level since July. “For people with good incomes and good credit scores, things are going well; they’re still able to access plenty of credit and, by and large, paying on time,” said Ted Rossman, senior industry analyst at Bankrate. “If you’re in the half who’s using a card for convenience and rewards, life is good. Now the other half, that can be a much more troublesome situation when you think about potentially longer-term credit card debt.”

 

CNN

Fox News

Regulatory Compliance done right - less stress, more success

What if compliance could do more than keep you out of trouble?

Imagine using regulatory compliance to attract more customers, build trust with investors and streamline your operations. It's possible! Join experts Michael Volkov, Kyle Walker and Rebecca Walker for a webinar on October 30 to learn how to: 

• Turn compliance into a long-term business advantage
• Create a risk framework that fits your structure
• Safeguard your expanding network and minimize partner risks
• Future-proof your risk strategies – for today and tomorrow

Don’t just manage risk – turn it into an advantage.

Get started!

 

Howard Lutnick, co-chair of Republican presidential nominee Donald Trump's transition team, has said that under a second Trump administration, companies like Apple would face increased taxes in the U.S. He emphasized that a Trump presidency would "limit monopoly providers" and make the 2017 tax cuts permanent, encouraging domestic building and tax payments. Mr. Lutnick, who is also chief executive of Cantor Fitzgerald, said that Elon Musk told him he was happy for Tesla to pay more U.S. tax, so long as such rules applied to everyone. “Have them pay their taxes in America and that is how you fix America,” he said. “There shouldn’t be carve outs for Apple.”

 

Bloomberg

Matt Garman, the CEO of Amazon's AWS unit, has defended the company's new 5-day-per-week in-office policy and suggested those who do not wish to work in-office five days per week can quit. "If there are people who just don't work well in that environment and don't want to, that's okay, there are other companies around," said Garman. "By the way, I don't mean that in a bad way," he said, adding "we want to be in an environment where we're working together."  Garman said nine out of 10 workers he has spoken with support the new policy, which takes effect in January. "When we want to really, really innovate on interesting products, I have not seen an ability for us to do that when we're not in-person," he said at an all-hands meeting. The company has been enforcing a three-day in-office policy, but CEO Andy Jassy said last month that Amazon would move to five days to "invent, collaborate and be connected."

 

Reuters

Law firms, holding vast amounts of sensitive, confidential data, are increasingly becoming targets for cybercriminals, placing corporate clients at risk. In a 2023 lawsuit, Mondelez faced legal action after its law firm, Bryan Cave Leighton Paisner, suffered a data breach, exposing sensitive employee data. The case highlights the growing concern that corporations could be held liable for their law firms' cybersecurity failures. Legal experts warn that companies cannot outsource their "duty of care" and must take steps to mitigate risks, including evaluating law firms' security practices, limiting data shared with outside counsel, and ensuring indemnity clauses are in place. With cybersecurity threats on the rise, companies are advised to rigorously assess third-party risk management, even with trusted law firms, to avoid potential financial and reputational damage. Proactive measures, like securing proper indemnity and data minimization, can help mitigate potential liabilities from such breaches.

 

Corporate Counsel

A recent cyber forum revealed significant gaps between federal cybersecurity initiatives and the realities faced by K-12 schools. Hosted by U.S. Deputy Secretary of Education Cindy Marten and Deputy National Cyber Director Harry Wingo, the forum highlighted schools’ struggles with adopting multi-factor authentication (MFA), with many districts pushing back against more secure MFA methods. Mike Hamilton, founder of PISCES, noted that institutional resistance to change is compounding the issue, alongside funding shortages. Despite cybersecurity being a high priority, funding remains scarce, with only 8% of state leaders feeling they have sufficient resources. The rising number of cyberattacks on schools—surpassing even hospitals and government offices—has underscored the urgent need for better defenses. Forum organizers aim to foster a community of practice to drive improvements, aligning with the White House's 2023 National Cybersecurity Strategy to protect under-resourced organizations like K-12 schools. 

 

Politico

McKinsey is overhauling its China business after cutting back on government-linked clients and reducing the unit’s workforce by nearly 500 people, about a third of the total. In recent times, the company has been separating the China unit from its global operations to reduce security risks with doing business in the country. Over the past two years, McKinsey’s workforce in Greater China, which includes Hong Kong and Taiwan, has shrunk by hundreds of employees. McKinsey first opened in mainland China in 1993 and grew quickly alongside the nation’s economy, winning business from state-owned firms including China Construction Bank, and China Telecom.

 

Reuters

Wall Street Journal

Tesla is facing significant challenges in launching its advanced driver-assistance package in China due to regulatory hurdles. According to China Daily, while the company has received support from the Chinese government to trial some self-driving features, "no full self-driving systems have been approved for use in the country." Issues surrounding mapping and data security are under scrutiny, complicating the rollout. Tesla CEO Elon Musk previously sought approval for robotaxis in China, which is crucial for the company as it is its second-largest market after the U.S. The company has priced its full self-driving feature at 64,000 yuan (approximately $9,000) per year, but it remains unavailable until regulatory approval is granted.

 

South China Morning Post

Alimentation Couche-Tard's $47.2bn bid for Seven & i Holdings, owner of 7-Eleven, is likely to encounter significant challenges during the U.S. antitrust review. According to Jennifer Rie, an antitrust analyst at Bloomberg Industries, the "chances are very high” that the U.S. Federal Trade Commission (FTC) will find the concentration levels problematic due to the proximity of Circle K and 7-Eleven locations. The merger could necessitate divestitures of up to 2,463 stores, representing 12.31% of the combined outlets. Couche-Tard founder Alain Bouchard said: "We have an answer to that”, indicating the company is prepared to address potential antitrust concerns. The FTC has been vigilant in scrutinizing major mergers, particularly in the retail sector, which could complicate Couche-Tard's ambitions.

 

Japan Times

Elon Musk’s X has updated its terms of service to steer any disputes from users of the social media platform to a federal court in Texas whose judges frequently deliver victories to conservative litigants in political cases. New terms of service to take effect on 15 November specify that any lawsuits against X by users must be exclusively filed in the U.S. District Court for the Northern District of Texas or state courts in Tarrant County, Texas. It is common for companies to include venue clauses in their terms of service specifying which forum would hear any disputes filed against them. But the choice of the northern district of Texas stands out because X is not located in the district, Reuters notes.

 

Reuters

Kellogg, known for producing Froot Loops and Apple Jacks, is facing mounting pressure to eliminate artificial dyes from its cereals in the U.S. Activists rallied outside the company's Michigan headquarters, presenting over 400,000 signatures demanding change. Food activist Vani Hari said: “I'm here for all the mothers who struggle to feed their kids healthy food without added chemicals”. While Kellogg has successfully removed artificial colors in other countries, such as Canada, it continues to use them in the U.S. The company claims that “more than 85% of our cereal sales contain no colors from artificial sources”. However, recent legislation in California banning certain food dyes may force Kellogg to reconsider its stance on artificial ingredients.

 

Boston Globe

Los Angeles has secured a $35m settlement from Monsanto, along with two affiliated companies, Pharmacia LLC and Solutia, for producing toxic polychlorinated biphenyls (PCBs) that contaminated local waterways. The lawsuit, filed by Los Angeles City Attorney Hydee Feldstein Soto, accused Monsanto of knowingly producing harmful chemicals for decades. PCBs, which were banned in 1979, have been linked to serious health risks and environmental damage. The funds will be used for compensatory restitution and waterway remediation. Monsanto, now part of Bayer, denied liability but agreed to the settlement, continuing to defend similar claims in other cases.

 

The Recorder

Instagram has introduced new safety features aimed at protecting teenagers from sextortion scams. The platform is leveraging technology to identify scam accounts, preventing them from accessing the “Following” and “Follower” lists of potential victims. This move is designed to hinder scammers who often exploit these lists for blackmail. Additionally, Instagram will restrict users from screenshotting or screen recording ephemeral images sent via direct messages, ensuring that intimate content remains private. Meta explained: “This means that if someone sends a photo or video in Instagram DM or Messenger using our ‘View once' or ‘Allow replay' feature, they don't need to worry about it being screenshotted or recorded in-app without their consent.” Furthermore, nudity protection filters will be automatically activated for users under 18, blurring images that may contain nudity and warning users about the risks of sharing sensitive content.

 

London Evening Standard

According to a report published Thursday by the Centers for Disease Control and Prevention (CDC), teen smoking has reached an all-time low in the U.S., with a 20% decrease in tobacco use among middle and high school students. The number of students using tobacco products dropped from 2.8m to 2.25m, marking the lowest level since the CDC began tracking in 1999. Deirdre Lawrence Kittner, director of CDC's Office on Smoking and Health, said: “Reaching a 25-year low for youth tobacco product use is an extraordinary milestone for public health.” The decline is largely attributed to reduced vaping rates, which fell to under 6%. Other tobacco products, including hookahs, also saw decreased usage. The survey included nearly 30,000 students, revealing that while overall tobacco use among high school students dropped to 10%, there was no significant change among middle school students.

 

The Baltimore Sun