As reported recently in American Banker, three leading banks — Citi, PNC, and BMO— are offering savings accounts with interest rates as high as 4.20%, but there is a catch: to take advantage of these higher-than-normal rates, customers must reside beyond the scope of physical branches.
“These three banks are saying, ‘Hey, let's go out of our footprint and take money from banks that are sleepy and bring it into our bank and make money,’” Neil Stanley told American Banker. “And my sense is that this regional strategy will continue as long as the banks don't alienate their in-market clients.”
Stanley is the founder and CEO of The CorePoint, a banking consultancy. Recently, Stanley sat down with Rob Blackwell, IntraFI’s Chief Content Officer, for an exclusive, invitation-only webinar, Refining Deposit Strategy Amid Increasing Pressures.
The webinar afforded Stanley a chance to discuss strategies for attracting and retaining customers as deposit competition heats up. He also shared his views on the current economic outlook, consumer finances, and what more Fed rate hikes mean for banks.
Recently, the Fed, FDIC, and OCC issued a joint statement advising banks to heed caution when dealing with deposits from crypto firms, including stablecoin reserves. Although the statement makes no mention of Silvergate Bank, the crypto bank that experienced a run recently that depleted $8 billion in deposits, it’s likely fallout from Silvergate contributed to the actions of the agencies.
Recently, a CFPB published a blog entitled “Why the largest credit card companies are suppressing actual payment data on your credit reports.” The piece recounted how last year it sent inquiries to the CEOs of the nation’s biggest credit card companies only to find six of the leading issuers aren’t reporting borrowers’ repayment information to credit bureaus. Doing so, the blog explained, might help millions of Americans improve their credit scores. Failing to report that info could have the opposite effect. Some analysts saw the blog as a less-than-subtle warning to issuers although it is unclear if any actual changes in policy or enforcement actions will follow.
Are stablecoins the new front in the crypto war? The Securities and Exchange Commission might be preparing to investigate Paxos Trust over whether it failed to register Binance USD, a stablecoin Paxos lists and issues, as a security. Should an action follow, it could send ripples throughout the stablecoin market, though talks this week between the bank and the agency have been “constructive.” Paxos maintains Binance USD is not a security, and it is prepared to defend that position through litigation, if necessary.
Recently, a CFPB official penned a blog entitled “Why the largest credit card companies are suppressing actual payment data on your credit reports.” The piece detailed how last year the agency sent letters to the CEOs of the nation’s biggest credit card companies only to find six of the largest credit card issuers are not reporting borrowers’ monthly repayment information to credit bureaus. Doing so, the blog explained, might help millions of Americans improve their credit scores. any analysts saw the blog as a less-than-subtle warning that the agency may be planning some action around credit card payment reporting - although not yet clear if it will result in actual policymaking or enforcement actions.
If the Consumer Financial Protection Bureau makes good on its demand for deep cuts in credit card fees, many credit-card heavy banks may need to modify their business models, analysts and attorneys told S&P Global Market Intelligence. If the CFPB’s proposals for an $8 cap on missed payments and similar rules goes into effect, card issuers may need to make up for lost revenue by increasing their interest rates, reducing rewards, tightening underwriting, and more, one analyst predicts.
The Financial Times recently shared insights from Steven Blitz, an economist at TS Lombard, who offered a grim forecast for some smaller banks that “look like they are heading for an unsettling mix of reduced funding and more underperforming loans,” Blitz wrote. One man’s opinion, of course, but Blitz considers a range of factors that lead him to ponder the prospect that a possible small bank funding crisis could be in the offing.
In a recently filed complaint filed Friday, Wyoming’s Custodia Bank claims the Fed and the Kansas City Fed lack the authority to deny the bank’s master account application, accusing the KC Federal Reserve Board of orchestrating the bank’s master account rejection. The crypto bank claimed Fed officials coordinated with the White House to prevent it from accessing the Fed’s vaunted payment system, raising questions about the central bank’s independence.
Financial regulators in Illinois recently revealed legislative plans to enhance consumer protections as it crafts a new regulatory framework for digital-asset firms. The legislative package includes a proposal requiring digital-asset exchanges and firms to obtain a license to operate in Illinois, while another would introduce new disclosure requirements for small-business lenders. Another would better equip the state with tools to target fraudsters.