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☆ Workers are paying to get part of their paychecks early. It's 'payday lending on steroids,' one expert says
▼ + stars: | 2024-01-28 | by ( Greg Iacurci | ) www.cnbc.com time to read: +12 min

Fotostorm | E+ | Getty ImagesMillions of American workers are paying for early access to their paychecks. So-called "earned wage access" programs, which operate either directly to the consumer or through employers, let workers tap a portion of their wages before payday, often for a fee. Earned wage access has gotten more popularEarned wage access goes by various names: daily pay, instant pay, accrued wage access, same-day pay and on-demand pay, for example. "It's another version of payday loans," Monica Burks, policy counsel at the Center for Responsible Lending, a consumer advocacy group, said of earned wage access. However, a recent study by the U.S. Government Accountability Office found that earned wage access products "generally cost less than typical costs associated with payday loans."

Persons: it's, Marshall Lux, Lux, hasn't, Cherie Chung, EarnIn, MoneyLion, Monica Burks, —, Thad Peterson, There's, EWA, Peterson, Harvard's, we're, Stacy Greiner, Dave, Ben LaRocco, Miranda Margowsky, Margowsky, Atif Siddiqi, Siddiqi, Safwan Shah, Shah, doesn't, Harvard's Chung Organizations: Harvard University, Finance, Harvard Kennedy School, Lux, Harvard, Hilton, Uber, Walmart, Companies, Center for, California Department of Financial Protection, Center for Responsible, U.S, Government, Office, GAO, Datos, Commerce, Economic, Financial Technology Association Locations: Kroger, McDonald's, California, Vermont

Legal experts say that if California wins, it could embolden other states to take action against lenders that make high-interest loans to low-income borrowers using what critics call "rent a bank" partnerships. Several nonbank lenders have already exited California, said Saunders, whose group tracks high-interest lenders. In California, OppFi took the unusual step of preemptively suing to try to block the state from taking action. Federal law allows state-chartered banks to lend across state lines at the interest rate legal in their home state. California has urged Dillon to recognize that OppFi decides who to lend to and has a deal with the bank to purchase the loans.

Persons: Lee Jae, Timothy Dillon, Lauren Saunders, California's, OppFi, Saunders, Dillon, Allard Chu, That's, Ron Vaske, Ballard Spahr, Jody Godoy, Andy Sullivan Organizations: REUTERS, California Department of Financial Protection, Los Angeles Superior, California, Federal Reserve, National Consumer Law Center, EasyPay Finance, FinWise Bank, FinWise, Thomson Locations: Seoul, California, Chicago, Utah, U.S, In California, Colorado, New York

☆ Ex-First Republic CEO blames contagion for bank's collapse
▼ + stars: | 2023-05-17 | by ( ) www.reuters.com time to read: +1 min

May 16 (Reuters) - The former chief executive of the First Republic Bank Michael Roffler blamed the bank's collapse on the contagion from the failures of other regional banks and said regulators did not express concerns regarding the bank's strategy, liquidity, or management performance. "We could not have anticipated that Silicon Valley Bank and Signature Bank would fail, or that the failure of those banks would trigger substantial deposit outflows at our bank," he said. First Republic's financial position and strategy were regularly reviewed by the California Department of Financial Protection and Innovation (DFPI) and the FDIC, he said. California banking regulators shut down First Republic Bank on May 1 and sold its assets to JPMorgan Chase & Co (JPM.N), in a deal to resolve the largest U.S. bank failure since the 2008 financial crisis and draw a line under lingering banking turmoil. Reporting by Nilutpal Timsina in Bengaluru; Editing by Kim CoghillOur Standards: The Thomson Reuters Trust Principles.

☆ US officials are looking into possible market manipulation of regional bank stocks
▼ + stars: | 2023-05-05 | by ( Carla Mozée | ) www.businessinsider.com time to read: +2 min

US and state officials are assessing whether market manipulation is driving volatility in regional bank stocks, Reuters reported. A banking association is asking the SEC to stop short-bets on bank stocks. The Securities and Exchange Commission calls market manipulation "intentional or willful conduct designed to deceive or defraud investors by controlling or artificially affecting the price of securities." The American Bankers Association is urging the SEC to stop short bets in regional bank stocks. Short sellers pulled in nearly $400 million on Thursday from the sell-off in regional bank stocks, according to data from financial analytics platform Ortex.

☆ After First Republic's rescue, economists predict further pain with a 'new era' of higher inflation
▼ + stars: | 2023-05-03 | by ( Elliot Smith | ) www.cnbc.com time to read: +5 min

Leah Millis | ReutersAfter the rescue of First Republic Bank by JPMorgan Chase over the weekend, leading economists predict a prolonged period of higher interest rates will expose further frailties in the banking sector, potentially compromising the capacity of central banks to rein in inflation. Almost 80% of chief economists surveyed said central banks face "a trade-off between managing inflation and maintaining financial sector stability," while a similar proportion expects central banks to struggle to reach their inflation targets. Yet several leading economists told a panel at the World Economic Forum Growth Summit in Geneva on Tuesday that higher inflation and greater financial instability are here to stay. That means inflation, the impulse of inflation will be higher." She added that it "defies logic" that as the industry tries to pivot rapidly to a higher interest rate environment, there won't be further casualties beyond SVB, Signature, Credit Suisse and First Republic.

STEPPING UPA security guard stands outside a First Republic Bank branch in San Francisco, California, U.S. April 28, 2023. The FDIC estimated in a statement that the cost to the Deposit Insurance Fund (DIF) would be about $13 billion. JPMorgan has assumed all of the bank's deposits, it said, and will repay $25 billion of the $30 billion big banks deposited with First Republic in March. New York-based JPMorgan will take on $173 billion of loans, $30 billion of securities and $92 billion of deposits. "Our government invited us and others to step up, and we did," said Jamie Dimon, JPMorgan Chairman and CEO.

☆ U.S. Treasury encouraged by First Republic resolution, says banking system remains sound
▼ + stars: | 2023-05-01 | by ( ) www.reuters.com time to read: +2 min

WASHINGTON, May 1 (Reuters) - The U.S. Treasury Department is encouraged that First Republic Bank (FRC.N) was resolved with the least cost to the Deposit Insurance Fund, and believes the U.S. banking system remains sound and resilient, a Treasury spokesperson said early Monday. "Treasury is encouraged that this institution was resolved with the least cost to the Deposit Insurance Fund, and in a manner that protected all depositors," the spokesperson said. "The banking system remains sound and resilient, and Americans should feel confident in the safety of their deposits and the ability of the banking system to fulfill its essential function of providing credit to businesses and families." The California Department of Financial Protection and Innovation said it had taken possession of First Republic and the Federal Deposit Insurance Corporation (FDIC) would act as its receiver. The FDIC estimated in a statement that the cost to the Deposit Insurance Fund would be about $13 billion.

May 1 (Reuters) - JPMorgan Chase & Co (JPM.N) will buy most of First Republic Bank's (FRC.N) assets in a last-ditch rescue led by U.S. regulators, marking the third major U.S. institution to fail in two months. First Republic Bank shares tumbled 43.3% in premarket trading. The FDIC estimated in a statement that the cost to the Deposit Insurance Fund would be about $13 billion. "Our government invited us and others to step up, and we did," said Jamie Dimon, Chairman and CEO of JPMorgan Chase. The failed bank's 84 offices in eight states will reopen as branches of JPMorgan Chase Bank from Monday, according to the JPMorgan statement.

☆ JP Morgan to buy First Republic's assets and assume deposits
▼ + stars: | 2023-05-01 | by ( ) www.reuters.com time to read: +3 min

The banking giant will take $173 billion of loans and about $30 billion of securities of First Republic Bank including $92 billion of deposits, JPMorgan said in a statement. First Republic Bank shares tumbled 36% in premarket trading. The FDIC estimated in a statement that the cost to the Deposit Insurance Fund would be about $13 billion. "Our government invited us and others to step up, and we did," said Jamie Dimon, Chairman and CEO of JPMorgan Chase. The failed bank's 84 offices in eight states will reopen as branches of JPMorgan Chase Bank from Monday, according to the JPMorgan statement.

☆ JPMorgan takes over First Republic after it's seized by Californian financial regulator
▼ + stars: | 2023-05-01 | by ( Hugh Son | ) www.cnbc.com time to read: +1 min

A view of the First Republic Bank logo at the Park Avenue location, in New York City, March 10, 2023. The Californian financial regulator took possession of First Republic Monday, resulting in the third failure of an American bank since March, after a last-ditch effort to persuade rival lenders to keep the ailing bank afloat failed. JPMorgan Chase acquired all of First Republic's deposits, including uninsured deposits, and a "substantial majority of assets," according to a release. "As part of the transaction, First Republic Bank's 84 offices in eight states will reopen as branches of JPMorgan Chase Bank, National Association, today during normal business hours," the FDIC said in a statement. "All depositors of First Republic Bank will become depositors of JPMorgan Chase Bank, National Association, and will have full access to all of their deposits."

☆ First Republic may not survive, even after two multibillion-dollar bailouts
▼ + stars: | 2023-04-26 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +8 min

New York CNN —First Republic Bank is in a fight for its survival. “It’s becoming clearer each day” that First Republic is “toast,” said Don Bilson at Gordon Haskett, in a note Wednesday. First Republic said in its latest earnings call that is exploring its strategic options, Wall Street code for searching for a white knight. First Republic CEO Michael Roffler attempted to assure investors in an earnings call Monday that the bank had enough liquidity to do that. That’s what happened to Silicon Valley Bank on March 10 when the California Department of Financial Protection and Innovation took possession of and closed Silicon Valley Bank and on March 12 Signature Bank was closed by the New York State Department of Financial Services.

[1/4] A view of the Park Avenue location of the First Republic Bank, in New York City, U.S., March 10, 2023. FDIC regulators had raised the specter of systemic risk from the failure of large regional banks months before the SVB and Signature Bank collapses, records reviewed by Reuters show. SECRETS REVEALEDThe Fed will release its report on SVB at 11 a.m. EDT (1500 GMT) on Friday. FDIC Chair Martin Gruenberg has not provided much detail about the supervision of Signature, which like SVB had grown rapidly in recent years. The Fed's inspector general will have a report on each bank in the third quarter.

Companies Robinhood Markets Inc FollowApril 6 (Reuters) - The California Department of Financial Protection and Innovation (DFPI) said on Thursday it has joined a multi-state settlement with Robinhood Financial LLC (HOOD.O), which will pay up to $10.2 million in penalties for operational and technical failures. Reporting by Manya Saini in Bengaluru; Editing by Shailesh KuberOur Standards: The Thomson Reuters Trust Principles.

☆ How post-2008 bank rules led to a 2023 problem
▼ + stars: | 2023-03-30 | by ( Liam Proud | ) www.reuters.com time to read: +4 min

Here’s how that story applies to the collapse of Credit Suisse (CSGN.S) and Silicon Valley Bank. Silicon Valley Bank’s technology-heavy customers attempted to withdraw $42 billion in a day. Reuters Graphics Reuters GraphicsFollow @liamwardproud on TwitterCONTEXT NEWSUBS will rescue Credit Suisse in a deal worth about 3 billion Swiss francs ($3.3 billion), Swiss authorities and the two banks said on March 19. The smaller bank lost 138 billion Swiss francs of customer deposits between Sept. 30 and Dec. 31, a 37% decline. The lender had $173 billion of total deposits on Dec. 31, of which $81 billion were non-interest-bearing demand deposits.

☆ Bank runs have the crypto industry on high alert. 3 experts explain why the latest batch is especially worrisome — and what comes next.
▼ + stars: | 2023-03-26 | by ( Laila Maidan | ) www.businessinsider.com time to read: +10 min

Only a decade ago, bank runs happened at a much slower pace. The era of digital bank runsOne thing the past few weeks has made clear is that bank runs now unfold differently, especially for smaller banks that service specialized sectors. "Bank runs are evolving into a different and much more dangerous beast because they happen faster," Baker said. By comparison, on March 9, SVB lost $42 billion in a day — and it was a smaller bank, Baker added. Long said she warned regulators again after FTX collapsed that banks servicing the crypto sector face the danger of bank runs.

☆ Warren unveils bill to repeal Trump-era bank deregulation she says led to SVB, Signature collapses
▼ + stars: | 2023-03-14 | by ( Christina Wilkie | ) www.cnbc.com time to read: +2 min

Senator Elizabeth Warren (D-MA) speaks to reporters about codifying gay marriage on Capitol Hill in Washington, September 15, 2022. WASHINGTON — A group of Democratic senators introduced new legislation Tuesday to repeal Trump-era bank deregulations they say created the conditions that allowed for the dramatic collapse of Silicon Valley Bank and the closure of Signature Bank since Friday. Right away, mid-sized banks, including SVB, began lobbying Congress for an exemption from the tighter oversight rule. On the Senate floor Tuesday, Democratic Sen. Elizabeth Warren, Mass., drew a straight line from the 2018 deregulation effort to the 2023 failure of SVB and Signature. "The weakened rules permitted banks like SVB and Signature to load up on risks, run up their profits, pay their executives, giant bonuses, and eventually blow the banks to pieces," said Warren.

☆ Here are Monday's biggest analyst calls: Apple ,Tesla, First Republic, Roku, Sunrun, JPMorgan Chase & more
▼ + stars: | 2023-03-13 | by ( Michael Bloom | ) www.cnbc.com time to read: +19 min

Baird upgrades Truist to outperform from neutral Baird said it sees an attractive risk/reward for the regional bank. "Regional bank risk/reward trade-off improving, and we would get more aggressive on the regional bank side, upgrading TFC to Outperform." Bank of America reiterates Alphabet as buy Bank of America said it's bullish on Alphabet's entry into AI. Bank of America reiterates Roku as buy Bank of America said it's standing by the stock in the wake of the Silicon Valley Bank collapse. "Regional bank risk/reward trade-off improving, and we would get more aggressive on the regional bank side, upgrading TFC to Outperform."

☆ Etsy warns sellers of delay in processing payments due to Silicon Valley Bank collapse
▼ + stars: | 2023-03-11 | by ( Rob Wile | ) www.cnbc.com time to read: +3 min

Etsy is warning sellers that the collapse of Silicon Valley Bank on Friday is causing delays in processing payments, according to an email from the company shared with NBC News. "We wanted to let you know that there is a delay with your deposit that was scheduled for today," the email from Etsy said. "Please know that our teams are working hard to resolve this issue and send you your funds as quickly as possible." One affected Etsy seller told NBC News the deposits delay would have a "catastrophic" effect on his business. The FDIC has formed a separate entity where all insured SVB deposits — up to $250,000 per depositor — will be available by Monday morning.

☆ After a wild, losing week for stocks, investors brace for more market-moving data
▼ + stars: | 2023-03-11 | by ( Zev Fima | ) www.cnbc.com time to read: +16 min

But PPI readings can predict the direction of future consumer price readings. High interest rates hurt because they increase monthly costs, but it's the lack of supply that contributes to elevated list prices. If we can get inflation down while seeing other economic indicators hold up, the likelihood of a soft landing increases. ET: Industrial Production & Capacity Utilization Looking back It was a tough week for stocks, with the Dow falling 4.4% in its worst showing since June. Under the hood, all sectors finished lower for the week, led down by financials and followed by materials and real estate.

☆ Who will step up to buy SVB? The white knight might be a bank outside Wall Street.
▼ + stars: | 2023-03-11 | by ( Hayley Cuccinello | ) www.businessinsider.com time to read: +5 min

SVB Bank, which catered to startups and tech founders, imploded in three days after a run on the bank. SVB Financial is reportedly looking to find a buyer by Monday. The implosion of Silicon Valley Bank means a working weekend for some bankers. SVB Financial Group is on the hunt for a buyer after regulators closed its Silicon Valley Banking business, according to Bloomberg. Though SVB's bond losses are taking up the headlines, its parent company SVB Financial has two business segments that are enticing.

☆ Silicon Valley Bank is the biggest US bank failure since Washington Mutual during the 2008 financial crisis
▼ + stars: | 2023-03-10 | by ( Sindhu Sundar | ) www.businessinsider.com time to read: +3 min

Regulators shut down Silicon Valley Bank on Friday following a catastrophic bank run. The largest bank failure before that was Washington Mutual in 2008, which had $307 billion in assets. The size of the failure is second only to Washington Mutual Bank's closure during the sub-prime mortgage crisis in 2008. A representative for Silicon Valley Bank did not immediately respond to Insider's emailed request for comment on Friday. FDIC, now the official receiver for Silicon Valley Bank, said it has taken measures to safeguard customers.

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☆ Silicon Valley Bank is shut down by regulators in biggest bank failure since global financial crisis
▼ + stars: | 2023-03-10 | by ( Jesse Pound | ) www.cnbc.com time to read: +3 min

Financial regulators have closed Silicon Valley Bank and taken control of its deposits, the Federal Deposit Insurance Corp. announced Friday, in what is the largest U.S. bank failure since the global financial crisis more than a decade ago. According to press releases from regulators, the California Department of Financial Protection and Innovation closed SVB and named the FDIC as the receiver. The FDIC in turn has created the Deposit Insurance National Bank of Santa Clara, which now holds the insured deposits from SVB. The last U.S. bank failure of this size was Washington Mutual in 2008, which had $307 billion in assets. The shares of parent company SVB Financial Group fell 60% on Thursday, and dropped another 60% in premarket trading on Friday before being halted.

☆ Silicon Valley Bank has been shut down by regulators
▼ + stars: | 2023-03-10 | by ( Phil Rosen | ) www.businessinsider.com time to read: +2 min

Regulators shut down Silicon Valley Bank, putting it into FDIC receivership. "At the time of closing, the FDIC as receiver immediately transferred to the DINB all insured deposits of Silicon Valley Bank." "To protect insured depositors, the FDIC created the Deposit Insurance National Bank of Santa Clara (DINB). At the time of closing, the FDIC as receiver immediately transferred to the DINB all insured deposits of Silicon Valley Bank," the regulator said in a statement. The crisis dragged on other bank stocks including JPMorgan, Bank of America, and Wells Fargo.

Learn more A five pointed star A five pointed star A five pointed star A five pointed star A five pointed star 4.25 out of 5 Stars Editor's Rating A tooltip OUR EDITOR'S RATINGS ARE PRIMARILY BASED ON 3 THINGS: SIMPLICITY, AFFORDABILITY, AND VALUE. Learn more A five pointed star A five pointed star A five pointed star A five pointed star A five pointed star 4 out of 5 Stars Editor's Rating A tooltip OUR EDITOR'S RATINGS ARE PRIMARILY BASED ON 3 THINGS: SIMPLICITY, AFFORDABILITY, AND VALUE. Learn more A five pointed star A five pointed star A five pointed star A five pointed star A five pointed star 4.25 out of 5 Stars Editor's Rating A tooltip OUR EDITOR'S RATINGS ARE PRIMARILY BASED ON 3 THINGS: SIMPLICITY, AFFORDABILITY, AND VALUE. Learn more A five pointed star A five pointed star A five pointed star A five pointed star A five pointed star 3.75 out of 5 Stars Editor's Rating A tooltip OUR EDITOR'S RATINGS ARE PRIMARILY BASED ON 3 THINGS: SIMPLICITY, AFFORDABILITY, AND VALUE. Pros Check mark icon A check mark.

PSLF helps workers at nonprofit, government, and tribal organizations get their student loans forgiven after 120 eligible payments. Under a limited waiver that expires on October 31, more payments count toward the 120 eligible payments. To help you apply for PSLF before the limited waiver expires, here are three guides — two completely free, and one that costs $47 — to help you fill out your application. Chipper app (free)The Chipper app, founded by Tony Aguilar, is designed to help people with student loans chip away slowly at their balances using spare change from everyday purchases. Additionally, Chipper has helped over 5,600 people get their student loans forgiven through PSLF.

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