The WSJ asked 66 economists to weigh in on the direction of the economy and presented the findings in a series of charts; a "gender gap" is increasingly defining this year's presidential election; and, will we get an "October surprise?" Here's what else you might want to read this week:
"Bankers Open to Change at the Fed, but Not the One Trump Wants"
Just 5% of respondents to IntraFi's most recent quarterly survey of more than 400 bank executives said the Fed should have to consult the president on rate policy, while just 7% said the president should have the power to replace the Fed chair. However, 45% said they'd support at least one change to limit the Fed's independence. The most popular option to do so was by shortening the appointments of the Fed chair and governors, selected by 24% of respondents.
"Savers Bid a Sad Farewell to Higher Yields"
With the Fed cutting rates, yields on money-market funds, savings accounts, and CDs are falling fast. Eighty-one percent of respondents to IntraFi's quarterly survey referenced above said they've already started lowering deposit rates at their institutions.
"CFPB's Chopra Rushes to Finish Enforcement Actions Before Election"
CFPB Director Rohit Chopra has been pursuing an aggressive enforcement agenda since the Supreme Court ruled 7-2 in May to uphold the agency's funding. With the election (and a possible change in administration) less than three weeks away, the CFPB is trying to settle as many cases as it can before Chopra's time at the helm potentially runs out.
On Tuesday, Sen. Katie Britt, R-AL, published an op-ed in American Banker referring to the agency as a "regulatory nightmare," largely in response to its enforcement agenda and "rampant overreach." Among other accusations, Britt claimed the CFPB was "wasting public funding," highlighting its tripling in enforcement spending over the past three years.
In recent months, the GOP has thrown up another challenge to the CFPB's funding, which, according to Dodd-Frank, is supposed to come from the Fed's earnings. But the Fed has been running losses since 2022, leading Rep. Andy Barr, R-KY, and others to suggest the agency hasn't been lawfully funded for the past couple years. However, their argument isn't getting much traction in Texas at the moment.
Finally, in other CFPB news, the agency's nonbank registry of repeat offenders went live this week.
"TD Money-Laundering Scandal Puts Supervision Back Under the Microscope"
After allowing billions of dollars from drug trafficking, human trafficking, and other illicit activities to flow through the U.S. financial system for more than a decade, TD Bank is facing $3 billion in fines and an asset cap that will remain in place until it fixes its anti-money-laundering controls.
Many are now questioning why examiners took so long to respond to what they say were obvious red flags. "Because the banking agencies didn't catch it early … they ended up with the 10th largest bank in the country that they were undoubtedly afraid to shut down for potential systemic risks," said Karen Shaw Petrou, managing partner at Federal Financial Analytics. "They let a bank get away with AML murder by the time it was hauled before the courts, no thanks to the supervisors."
"BPI and TCH Seek to Intervene in Corner Post Case Challenging Debit Interchange Limits"
The two groups jointly filed a motion to intervene on behalf of the Fed in its lawsuit with Corner Post, Inc., claiming that the North Dakota truck stop's reading of the Durbin Amendment would have significant negative impacts on banks that issue debit cards. Corner Post is challenging the Fed's implementation of Durbin, claiming the central bank initially set a too-high cap on the processing fees card issuers can charge merchants.
"Harris Tries to Court Black Men Voters With Forgivable Loans, Crypto"
Earlier this week, Vice President Kamala Harris unveiled a plan to provide up to one million fully forgivable loans of up to $20,000 to African American entrepreneurs seeking to grow their businesses or start new ones. She's also pledging to boost innovation around digital assets to improve access to financial services.
"The Business of Cybercrime Explodes"
Cybercriminals are more brazen and sophisticated than ever. Read this exclusive Bank Director article about the rising threats to banks posed by the dark web and learn what your institution can do to prepare.
"Trump Says Growth to Outpace Feared Debt, Inflation from Agenda"
Former President Trump has pledged to extend tax cuts, lower corporate tax rates, incentivize domestic manufacturing, increase tariffs on foreign goods, and pursue large-scale deregulation. Economists claim Trump's policies will trigger inflation and increase the national debt, but Trump contends that the growth his policies create will counteract any negative fiscal or monetary effects.
"Storms Be Damned, Florida Keeps Building in High-Risk Areas"
Nearly 300,000 properties have been built in flood-prone areas across the country since 2019, and 77,000 have been built in Florida alone, putting banks that finance real estate on a "collision course" with insurance companies. "The lenders…are really in the best position to make sure there's the right consideration of the long-term risk," said Robert Gordon, senior vice president at the American Property Casualty Insurance Association. "A lot of times that's not happening."
"Meet the Banker Running for Senate in Wisconsin"
Sunwest Bank CEO Eric Hovde is running for one of Wisconsin's Senate seats as a Republican against Democratic Incumbent Tammy Baldwin. While he faces an uphill battle to victory, the race is tightening as Election Day draws near. American Banker sat down with Hovde to discuss his plans to bring financial sophistication and a deregulatory mindset to Washington.
"Investment Banking Surge at Morgan Stanley Solidifies Wall Street Revival"
Wall Street banks are enjoying a stellar earning season, as a rebound in M&A activity has led to a surge in investment banking fee income and equity trading revenues at JPMorgan, Goldman, Morgan Stanley, and others. Review the WSJ's three major takeaways from bank earnings so far.
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Rob Blackwell
Chief Content Officer and Head of External Affairs
IntraFi
Arlington, VA
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