Opinion | Elizabeth Warren: We Can Prevent More Bank Failures – The New York Times

“No one should be mistaken about what unfolded over the past few days in the U.S. banking system: These recent bank failures are the direct result of leaders in Washington weakening the financial rules.

In the aftermath of the 2008 financial crisis, Congress passed the Dodd-Frank Act to protect consumers and ensure that big banks could never again take down the economy and destroy millions of lives. Wall Street chief executives and their armies of lawyers and lobbyists hated this law. They spent millions trying to defeat it, and, when they lost, spent millions more trying to weaken it.

Greg Becker, the chief executive of Silicon Valley Bank, was one of the ‌many high-powered executives who lobbied Congress to weaken the law. In 2018, the big banks won. With support from both parties, President Donald Trump signed a law to roll back critical parts of Dodd-Frank. Regulators, including the Federal Reserve chair Jerome Powell, then made a bad situation worse, ‌‌letting financial institutions load up on risk.

Banks like S.V.B. ‌— which had become the 16th largest bank in the country before regulators shut it down on Friday ‌—‌ got relief from stringent requirements, basing their claim on the laughable assertion that banks like them weren’t actually “big” ‌and therefore didn’t need strong oversight.”

Chenzi Xu and Jeffrey Reppucci | Credit Card Points Are Being Paid For by the Poor – The New York Times

By Chenzi Xu and Jeffrey Reppucci

Ms. Xu is a finance professor at the Stanford Graduate School of Business. Mr. Reppucci is a candidate for a Master of Business Administration and Master of Public Policy at Stanford.

There’s an undeniable feeling of excitement when you turn your daily credit card swipes at Starbucks into first-class airfare or a weekend jaunt to Costa Rica. Thanks to mobile banking and the ease of autopay, you can scrupulously avoid any additional costs by paying your monthly bill in full. Free flights and exclusive discounts abound.

Something for nothing, right?

Not exactly nothing. Credit card perks for educated, usually urban professionals are being subsidized by people who have less. In other words, when you book a hotel room or enjoy entry to an airport lounge at no cost, poor consumers are ultimately footing the bill.

Demand for rewards is only going up. In 2016, Chase launched its Sapphire Reserve card. The card comes with perks, bonuses and points multipliers that for big-spending travelers and diners are worth far more than its steep $550 annual fee. There was so much initial demand that Chase ran out of the metal slabs it prints the cards on. Sapphire’s enormous success set off a credit card perks war, with numerous banks flooding the market with sign-on bonuses worth thousands of dollars.

In 2022, the Federal Reserve published data showing that the cost of rewards, as a share of total transaction volume on credit cards, increased 25 percent from 2015 through 2021. This bonanza has helped affluent professionals flood Instagram with envy-inducing shots of white sand beaches, hotel suites and plush airport lounges.

Paul Krugman | From the Big Short to the Big Scam (cryptocurrency) – The New York Times

By Paul Krugman

Opinion Columnist

“Remember “The Big Short”? The 2010 book by Michael Lewis, made into a 2015 film, told the story of the 2008 global financial crisis by following a handful of investors who were willing to bet on the unthinkable — the proposition that the huge rise in housing prices in the years before the crisis was a bubble, and that many of the seemingly sophisticated financial instruments that helped inflate housing would eventually be revealed as worthless junk.

Why were so few willing to bet against the bubble? A large part of the answer, I’d suggest, was what we might call the incredulity factor — the sheer scale of the mispricing the skeptics claimed to see. Even though there was clear evidence that housing prices were out of line, it was hard to believe they could be that far out of line — that $6 trillion in real estate wealth would evaporate, that investors in mortgage-backed securities would lose around $1 trillion. It just didn’t seem plausible that markets, and the conventional wisdom saying that markets were OK, could be that wrong.

But they were. Which brings us to the current state of crypto.

Last week the Federal Trade Commission reported that “cryptocurrency is quickly becoming the payment of choice for many scammers,” accounting for “about one of every four dollars reported lost to fraud.” Given how small a role cryptocurrency plays in ordinary transactions, that’s impressive.”

NYT Editorial | Let Innocent Afghans Have Their Money – The New York Times

“Mr. Mehrabi has proposed that the Biden administration allow monthly transfers of small amounts of the frozen funds for the sole purpose of auctioning off dollars to private banks. Such auctions are easy to monitor and could be cut off if the money was used for any other purpose, he said. Such an arrangement would bolster the hand of technocrats who have continued to work under the Taliban. It could be conditioned on their independence from the Taliban or on hiring certain technical staff members. Refusing to release any portion of the funds as long as the Taliban are in power would remove the money as a source of leverage.

Given the Sept. 11 lawsuit, it may not be possible to free up the funds frozen in New York in time to stave off a crisis. It may be more realistic for funds to be released from the banks in Europe, which hold a smaller but still significant amount of the Afghanistan central bank’s money. Since commercial banks in Afghanistan are required to keep some reserves in the central bank, hundreds of millions of dollars in the frozen overseas accounts are part of the life savings of Afghan citizens, which should not be rendered inaccessible because the Taliban took over the country.

It would not cost American taxpayers a dime to issue letters of comfort to European banks to make it clear that they will not be punished for giving private Afghan citizens access to their money. If this doesn’t happen, the world will be treated to the spectacle of Americans and Europeans paying to mitigate a humanitarian disaster caused, in part, by the fact that many Afghans have been cut off from their own money.”

Banks Slowly Offer Alternatives to Overdraft Fees, a Bane of Struggling Spenders – The New York Times

By Tara Siegel Bernard

June 22, 2021, 3:00 a.m. ET

“In less than a week, Keri Fitzpatrick, a self-described lunch lady, was dinged for $175 she definitely didn’t have.

A succession of automated payments over two days — for her phone, two credit cards and car insurance — pushed her TD Bank account into the red, socking her with $140 in overdraft fees. Then another unexplained fee surfaced on Friday, even though her paycheck had landed and she couldn’t find any other pending charges.

Ms. Fitzpatrick, 29, said she should’ve been paying closer attention — she assumed she had more money in her account. But she still couldn’t believe how quickly the charges piled up.

“It’s not like one fee comes out for one day. It is $35 for each of those,” said Ms. Fitzpatrick, of Peterborough, N.H., who oversees a middle school cafeteria. “It is just outrageous.” “

” . . . Overdraft fees have been a boon to banks. Revenue was $31.3 billion in 2020, according to Moebs Services, an economic research firm, down 10 percent from $34.6 billion in 2019. (Banks account for 78 percent of overdraft and insufficient fund fees, followed by credit unions at 20 percent and savings banks and fintechs at less than 2 percent.)

Overdraft fees peaked at $37.1 billion in 2009 and then began to decline after new regulations in 2010 required banks to receive consumers’ consent to opt in to overdraft services covering debit transactions and A.T.M. withdrawals.”

DL: This is a fee that should be banned entirely or severely restricted by the Federal Government, asap.For some banks, it is most of their profits.

The Financial Crisis the World Forgot – The New York Times

By Jeanna Smialek

• March 16, 2021, 5:00 a.m. ET

“By the middle of March 2020 a sense of anxiety pervaded the Federal Reserve. The fast-unfolding coronavirus pandemic was rippling through global markets in dangerous ways.

Trading in Treasurys — the government securities that are considered among the safest assets in the world, and the bedrock of the entire bond market — had become disjointed as panicked investors tried to sell everything they owned to raise cash. Buyers were scarce. The Treasury market had never broken down so badly, even in the depths of the 2008 financial crisis.” . . .

Opinion | The Money Machine That Can Save Cities – By Claudia Sahm – The New York Times

By Claudia Sahm

Ms. Sahm was an economist at the Federal Reserve from 2008 to 2019.

• April 23, 2020

Credit…Eva Hambach/Agence France-Presse — Getty Images

“State and local budgets across the United States are beginning to buckle under the economic strain caused by Covid-19. Because the economy is essentially in a medically induced coma, sales tax revenue and revenue from other business taxes have dried up. That means the funds to take care of communities — to pay teachers, to support Medicaid, to hire emergency medical workers, to maintain roads, to build low-income housing — are also drying up.

Because 40 out of 50 states have laws mandating that both the state’s overall budget and the budgets of nearly all cities be balanced, state governments are already laying off employees and cutting services. More than 14,000 workers in state governments lost their jobs in March. Terrifyingly, those losses, counted by the Bureau of Labor Statistics, only stretch through mid-March, before the shutdowns were nationwide.

Local officials were blindsided by this crisis and the costs it required to rapidly ramp up medical care and the social safety net. But so far Congress has allocated only $150 billion for state and local governments from the trillions of dollars its approved for pandemic relief. It’s too little and often it’s arriving too late.

The Federal Reserve knows this. And so, the central bank, with consent from Congress and in partnership with the Treasury, has joined the effort to shore up local and state finances by taking the unprecedented move of “backstopping the municipal bond market.” “

 

It May Be the Biggest Tax Heist Ever. And Europe Wants Justice. – by David Segal – The New York Times

“. . .  Today, the men stand accused of participating in what Le Monde has called “the robbery of the century,” and what one academic declared “the biggest tax theft in the history of Europe.” From 2006 to 2011, these two and hundreds of bankers, lawyers and investors made off with a staggering $60 billion, all of it siphoned from the state coffers of European countries.

As one participant would later put it, taxpayer funds were an irresistible mark for a simple reason: They never ran out.

The scheme was built around “cum-ex trading” (from the Latin for “with-without”): a monetary maneuver to avoid double taxation of investment profits that plays out like high finance’s answer to a David Copperfield stage illusion. Through careful timing, and the coordination of a dozen different transactions, cum-ex trades produced two refunds for dividend tax paid on one basket of stocks.

One basket of stocks. Abracadabra. Two refunds.

The process was repeated over and over, as word of cum-ex spread like a quiet contagion. Germany was hardest hit, with an estimated $30 billion in losses, followed by France, taken for about $17 billion. Smaller sums were drained away from Spain, Italy, Belgium, Austria, Norway, Finland, Poland and others.

Outrage in these countries has focused on the City of London, Britain’s answer to Wall Street. Less scrutinized has been the role played by Americans, both individual investors and branches of United States investment banks in London, including Morgan Stanley, JPMorgan Chase and Bank of America Merrill Lynch.”

Opinion | She Helped a Customer in Need. Then U.S. Bank Fired Her. – By Nicholas Kristof – The New York Times

This from a company that says employees should “do the right thing.”

By Nicholas Kristof

Opinion Columnist

• Feb. 1, 2020
• • 1789

Emily James and Harley Quinn, an emotional support dog.Credit…Alisha Jucevic for The New York Times

“To understand how some companies have lost their souls, consider what happened after U.S. Bank stiffed a customer before Christmas.

Marc Eugenio had deposited a $1,080 paycheck into his account at U.S. Bank. The bank put a hold on most of the sum, and he spent many hours in a branch office over two days, trying to get access to the money so he could buy presents for his 9-year-old daughter and 13-year-old son.

On Christmas Eve, Eugenio found himself parked at a gas station in Clackamas, Ore., a Portland suburb, both his fuel gauge and his bank balance on empty. A bank employee had told him that money would soon show up in his account — perhaps a ruse to get him out of the branch office. For hours Eugenio then tried his debit card at the gas pump, so he could buy a few gallons and get home to his wife and children.

“I was stranded,” he told me. “I could have walked home, but it would have been five miles in the cold.” “

Outsmart the scammers – from People’s United Bank

Outsmart the scammers – from People’s United Bank Outsmart the scammers Recognize signs of a phone scam and stop a fraudulent caller in their tracks. Have you ever answered a call that goes something like this: “Hello, [Your Name]. I’m calling from [the Name of Your Real Bank].” (You see the name of your bank displayed on Caller ID.) “We are calling to alert you to unusual charges on your debit card ending in 1234 at several retailers in recent days. I need to verify your SSN ending in 4321, and confirm your User ID and account number in order to stop this unauthorized activity on your card.” Is this call legit? No, it’s a scam. Why? Because People’s United Bank will never contact a customer either by phone or email to request sensitive personal information such as account numbers, PINs, usernames, passwords, security codes or other personal and account information. People’s United Bank will also never call and ask a customer to respond to a text message, or share a texted security code. Know the signs of a phone scam Scammers are getting more difficult to spot by using the following tactics: ■ Manipulating or spoofing caller IDs to make calls appear to be from someone you trust, such as your bank. ■ Conveying a sense of urgency or that pressures you into acting too quickly. ■ Providing partial but factual information about you or your account and requesting you to confirm that information on-the-spot. ■ Requesting that you immediately disclose additional personal or account information so that they can help you. Tips to avoid getting scammed ■ Don’t assume your caller ID is actually who’s calling. ■ Don’t confirm private personal or account information over the phone, or by email. ■ If texted a security code, do not share that security code with anyone over the phone—it should only ever be used by you to access your account. ■ We will never call and ask to share a texted security code. ■ We will never call you and ask you to respond to a text message. ■ If any of these things happens to you, hang up and dial the listed number of your bank. Your security is our priority If you have any questions or concerns please call us. 1-800-894-0300 This email was sent to: dalindsayjr@gmail.com. To ensure that you continue to receive email from us, please add us to your Address Book as information@peoples.com. You can update your email preferences or unsubscribe at any time. Protecting your privacy is a priority. People’s United Bank will never request customers to update or verify personal information, passwords, account numbers, or PINs via email. If you suspect an email using the People’s United Bank name to be suspicious, please contact the Call Center or forward the message to abuse@peoples.com for assistance. This email is subject to the People’s United Bank website Terms and Conditions, including those governing links to third-party websites. 850 Main Street, Bridgeport, CT, 06604 ©2019 People’s United Bank, N.A.  I  Member FDIC  I   Equal Housing Lender