June 1, 2023

Some Goldman Sachs Customers Report Apple Frustrations

 The mainstream press tends to generally praise Apple when it does anything and such was the case in April when it announced the launch of a savings account in partnership with Goldman Sachs. But since that time, there are anecdotal reports that customers are having difficulty getting their money out of those accounts. In many cases, it is taking weeks to get funds back, according to The Wall Street Journal. 

10 Possible Ripple Effects Brought on by Bank Failures

 The banking industry is just starting to grapple with the fallout from this most recent crisis, and executives should brace for far-reaching consequences. In light of that, American Banker offers up 10 predictions of how banking might change permanently following on the heels of the recent bank failures, covering everything from increased regulation to reciprocal deposits.

Per FDIC, U.S. Banks Saw Record Deposit Declines in Q1

 Bank deposits dropped 2.5% in the first quarter of 2023, the largest such decline since the FDIC started tracking the data as part of the Quarterly Banking Profile in 1984. The failures of Silicon Valley Bank and Signature Banks didn't help, but the primary driver for the decline is interest rates as consumers seek higher yields elsewhere. 

Bloomberg: Insuring All Deposits Won’t Make Banking Safer

It's rare to see the Bloomberg editorial staff take a position on banking, but the news outlet decided to evaluate calls for unlimited deposit insurance. It argues that far from making the system safer, it would encourage banks to pay higher interest rates and take bigger risks "even as their earlier bets turned bad."

CFPB Says Payment Apps Cold Leave Money Vulnerable

The CFPB warned that PayPal, Cash App, and Venmo are not backed by the FDIC or any government guarantee. "Popular digital payment apps are increasingly used as substitutes for a traditional bank or credit union account but lack the same protections to ensure that funds are safe," CFPB Director Rohit Chopra said.

Payments and Banks Work to Battle Payment Fraud

Financial institutions and payments companies are seeking to coalesce around new efforts to battle skyrocketing payments fraud, which has become much worse over the past 12-18 months. One potential reason for an uptick in fraud: the banks' long-standing aversion to sharing customer data, though that attitude may be changing.

CFPB Says 4Q Overdraft Revenue Fell 50% in Three Years

 Bank overdraft revenue fell nearly 50% in the fourth quarter compared with three years earlier, according to new Consumer Financial Protection Bureau data. Banks reported $1.6 billion in overdraft revenues during the fourth quarter of 2022, CFPB data shows, a major decline from the fourth quarter of 2019.

OCC Calls Out Big Banks with 'Persistent Weaknesses'

Large banks with "persistent weaknesses" may be required to curtail operations, divest subsidiaries, or exit business lines based upon a recent update to the OCC's manual on policies and procedures for enforcement actions. The regulator’s new enforcement manual appendix comes in the wake of the recent bank failures and is aimed at larger and more complex financial institutions.

N.Y. Fed Says Banks Borrowed More to Pad Liquidity

 U.S. banks borrowed so heavily from the Federal Reserve and other liquidity providers during the recent crisis that the inflows outpaced the decline in deposits they were seeking to offset, according to new research from the Federal Reserve Bank of New York.

FHA Proposes Some Borrowers Can Access Low Interest Rates

The Federal Housing Administration is aiming to help homeowners who've fallen behind on their mortgages by temporarily reducing their monthly payments. Importantly, the agency wouldn't require those who take advantage of the program to give up a low interest rate for a higher one.