No banks are safe (bail ins, FDIC limits, systemic risks)

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If you think banks aren't safe now just imagine them without the FDIC.

Trump team mulls axing Great Depression-era agency that guards against bank failures: WSJ

President-elect Donald Trump's advisers, alongside tech billionaire Elon Musk's Department of Government Efficiency task force, are soliciting opinions from nominees on whether it would be possible for Trump to abolish the Federal Deposit Insurance Corporation, the Wall Street Journal reported Thursday.

For now, at least, the idea appears to be reorganizing its function rather than eliminating it outright. Trump's advisers "have asked the nominees under consideration for the FDIC, as well as the Office of the Comptroller of the Currency, if deposit insurance could then be absorbed into the Treasury Department, some of the people said," reported Gina Heeb.

More:

https://www.msn.com/en-us/money/oth...S&cvid=cd6a565b390b457da8af5197ba1641cb&ei=14
 
^^ That doesn't mean the deposit insurance would be axed - just the current group of nincompoops managing it.
 
searcher said:
If you think banks aren't safe now just imagine them without the FDIC.

Trump team mulls axing Great Depression-era agency that guards against bank failures: WSJ

President-elect Donald Trump's advisers, alongside tech billionaire Elon Musk's Department of Government Efficiency task force, are soliciting opinions from nominees on whether it would be possible for Trump to abolish the Federal Deposit Insurance Corporation, the Wall Street Journal reported Thursday.

For now, at least, the idea appears to be reorganizing its function rather than eliminating it outright. Trump's advisers "have asked the nominees under consideration for the FDIC, as well as the Office of the Comptroller of the Currency, if deposit insurance could then be absorbed into the Treasury Department, some of the people said," reported Gina Heeb.

More:

https://www.msn.com/en-us/money/oth...S&cvid=cd6a565b390b457da8af5197ba1641cb&ei=14
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pmbug said:
^^ That doesn't mean the deposit insurance would be axed - just the current group of nincompoops managing it.
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No More FDIC Under Trump? What's NEXT For Your Money?​

Dec 15, 2024 #jenniferlammer #bondbeginners #bondmasters

Why does Trump want to abolish the FDIC & will the deposit insurance at your bank go away? Plus, what should you do now?


13:45

SOURCES & REFERENCED VIDEO:

- LEARN MORE ABOUT HOW FDIC INSURANCE WORKS: https://youtu.be/txmXJBGU_70
- https://www.wsj.com/finance/regulation/trump-advisers-bank-regulations-fdic-efa761dc?mod=hp_lead_pos1
- https://newrepublic.com/post/189377/trump-economy-bank-regulator-plan
- https://nypost.com/2024/12/13/business/trump-aides-mull-abolishing-fdic-as-part-of-deregulation-spree/
- https://www.cato.org/blog/financial-alphabet-soup
- https://www.fdic.gov/https://x.com/SheilaBair2013/status/1867549143855431689
 

US consumer watchdog sues big banks over 'widespread' fraud on Zelle payment app​

(Reuters) -The U.S. Consumer Financial Protection Bureau said on Friday it filed a lawsuit against JPMorgan Chase, Bank of America and Wells Fargo for failing to protect consumers from alleged "widespread fraud" on payments platform Zelle.

The lawsuit was initiated as the watchdog moves ahead with an aggressive agenda in the final weeks of Joe Biden's Democratic administration in a bid to advance consumer protections before President-elect Donald Trump overhauls the agency, said three people familiar with the agency's thinking. The moves defy congressional Republicans, who have called for agencies to cease rulemaking.

The CFPB seeks to stop the alleged unlawful practices, secure redress and penalties, and obtain other relief for consumers, it said in a statement.

"What they built became a goldmine for criminals," making it easy for fraudsters to drain accounts, while providing insufficient protections for consumers or making them whole for losses, CFPB Director Rohit Chopra told journalists in a briefing. "These banks broke the law by running a payments system that made fraud easy, while refusing to help the victims."

More:

https://www.msn.com/en-us/money/new...S&cvid=feaee75ba4ec40cfa034189d8fbf2ec0&ei=15
 
A group of banks and business groups are suing the Federal Reserve over the annual bank stress tests.

The Bank Policy Institute, which represents big banks like JPMorgan, Citigroup and Goldman Sachs, is joining the American Bankers Association, the Ohio Bankers League, the Ohio Chamber of Commerce and the U.S. Chamber of Commerce to file the suit, which they said aims to “resolve longstanding legal violations by subjecting the stress test process to public input as required by federal law.”

The groups said they don’t oppose stress testing, but that the current process falls short and “produces vacillating and unexplained requirements and restrictions on bank capital.”

CNBC earlier reported on the plans to file a suit.

The Fed’s stress test is an annual ritual that forces banks to maintain adequate cushions for bad loans and dictates the size of share repurchases and dividends.

After the market close Monday, the Federal Reserve announced in a statement that it is looking to make changes to the bank stress tests and will be seeking public comment on what it calls “significant changes to improve the transparency of its bank stress tests and to reduce the volatility of resulting capital buffer requirements.”

The Fed said it made the determination to alter the tests because of “the evolving legal landscape,” pointing to changes in administrative laws in recent years. It didn’t outline any specific modifications to the framework of the annual stress tests.
...
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Shamtastic
 

Bank of America Bond Losses Could Top $100 Billion Due to Rising Rates​

A sharp rise in rates since the end of the third quarter widened losses on bank securities portfolio and could become an investor issue again when banks start reporting their fourth-quarter results in the next week.

Bank of America has the largest unrealized losses in the banking industry and could be a focus of investor attention.

Barron’s estimates that Bank of America’s paper losses on a portfolio of $568 billion of bonds, mostly U.S. agency mortgage securities, could widen to $111 billion or more, compared with $86 billion at the end of September.

Industrywide, total unrealized losses could top $500 billion, up from $364 billion at the end of the third quarter. These losses involve all banks insured by the FDIC. The total potential losses would still be narrower than the nearly $700 billion at banks at the end of the third quarter of 2022.Why the wider losses recently? Bond prices move inversely with yields.

More:

https://www.msn.com/en-us/money/top...S&cvid=4f06a9570fa3462cbdbd053c27b41181&ei=28
 

CFPB Sues Capital One for Cheating Consumers Out of More Than $2 Billion in Interest Payments on Savings Accounts​

WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) sued Capital One, N.A., and its parent holding company, Capital One Financial Corp., for cheating millions of consumers out of more than $2 billion in interest. The CFPB alleges that Capital One promised consumers that its flagship “360 Savings” account provided one of the nation’s “best” and “highest” interest rates, but the bank froze the interest rate at a low level while rates rose nationwide. Around the same time, Capital One created a virtually identical product, “360 Performance Savings,” that differed from 360 Savings only in that it paid out substantially more in interest—at one point more than 14 times the 360 Savings rate. Capital One did not specifically notify 360 Savings accountholders about the new product, and instead worked to keep them in the dark about these better-paying accounts. The CFPB alleges that Capital One obscured the new product from its 360 Savings accountholders and cost millions of consumers more than $2 billion in lost interest payments. The CFPB’s lawsuit seeks to stop the companies’ unlawful conduct, provide redress for harmed consumers, and impose civil money penalties, which would be paid into the CFPB’s victims relief fund.

Read more:

www.consumerfinance.gov

CFPB Sues Capital One for Cheating Consumers Out of More Than $2 Billion in Interest Payments on Savings Accounts | Consumer Financial Protection Bureau

The CFPB sued Capital One for cheating millions of consumers out of more than $2 billion in interest.
www.consumerfinance.gov www.consumerfinance.gov
 
So the next time Capital One asks "What's in your wallet?" we can honestly answer a lot less than there should be you dirty rotten sonsabitches.
 
searcher said:

CFPB Sues Capital One for Cheating Consumers Out of More Than $2 Billion in Interest Payments on Savings Accounts​

WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) sued Capital One, N.A., and its parent holding company, Capital One Financial Corp., for cheating millions of consumers out of more than $2 billion in interest. The CFPB alleges that Capital One promised consumers that its flagship “360 Savings” account provided one of the nation’s “best” and “highest” interest rates, but the bank froze the interest rate at a low level while rates rose nationwide. Around the same time, Capital One created a virtually identical product, “360 Performance Savings,” that differed from 360 Savings only in that it paid out substantially more in interest—at one point more than 14 times the 360 Savings rate. Capital One did not specifically notify 360 Savings accountholders about the new product, and instead worked to keep them in the dark about these better-paying accounts. The CFPB alleges that Capital One obscured the new product from its 360 Savings accountholders and cost millions of consumers more than $2 billion in lost interest payments. The CFPB’s lawsuit seeks to stop the companies’ unlawful conduct, provide redress for harmed consumers, and impose civil money penalties, which would be paid into the CFPB’s victims relief fund.

Read more:

www.consumerfinance.gov

CFPB Sues Capital One for Cheating Consumers Out of More Than $2 Billion in Interest Payments on Savings Accounts | Consumer Financial Protection Bureau

The CFPB sued Capital One for cheating millions of consumers out of more than $2 billion in interest.
www.consumerfinance.gov www.consumerfinance.gov
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Jennifer's take.

JUST IN: Capital One "High-Yield" Savings Account: Were You Cheated Out Of Interest?​

Jan 16, 2025 #jenniferlammer #bondbeginners #bondmasters

Capital One is being sued for cheating customers out of $2+ billion in interest payments on their savings accounts by the Consumer Financial Protection Bureau - were you impacted; might you even be entitled to some belated interest payments & what now?


9:30

SOURCES:

- https://www.consumerfinance.gov/about-us/newsroom/cfpb-sues-capital-one-for-cheating-consumers-out-of-more-than-2-billion-in-interest-payments-on-savings-accounts/
- https://www.capitalone.com/bank/savings-accounts/online-performance-savings-account/
- https://banks.data.fdic.gov/bankfind-suite/financialreporting
- https://apnews.com/article/capital-one-sued-360-savings-cfpb-1e902f1eb5aabef8297640b0d5579a25
 
searcher

SCOTUS: Post in thread 'Seila Law LLC v. Consumer Financial Protection Bureau - Agency independence'

Update:

Consumer financial watchdog is ordered by acting director to stop fighting financial abuse​

Russell Vought, the newly installed acting director of the Consumer Financial Protection Bureau, sent an email Saturday night ordering all employees at the consumer watchdog to stop virtually all work – including fighting financial abuse.

“Effective immediately, unless expressly approved by the Acting Director or required by law, all employees, contractors and other personnel of the bureau shall…cease all supervision and examination activity,” Vought wrote in the email, a copy of...
 
No Bidders, No Safety Net: Is Fed's Liquidity Lifeline Drying Up? Plus, ETFs To Watch

For the first time since the Great Recession, banks didn't park a single dollar in the Federal Reserve's Reverse Repo Facility overnight. That's right—zero bids.

The mother ship of the U.S. banking system, which has been the go-to safety net for surplus cash, found no takers.

image.png

Read more here...
 

Savings account owners can't access 'frozen funds' deposited to FDIC-backed bank through popular app​

CHICAGO (WLS) -- The ABC7 I-Team is investigating "frozen funds."

High-yield savings accounts can be safe places to earn higher interest on money. But now, thousands of people are asking where their money is after depositing it into an FDIC bank through a popular app.

The problem involves millions of dollars, and thousands of people nationwide haven't been able to access savings accounts. Local consumers told the ABC7 I-Team they trusted an app and a bank. Now they're asking why their "funds are frozen."

More:

abc7chicago.com

Savings account owners can't access 'frozen funds' deposited to FDIC-backed bank through popular app

Thousands of people nationwide haven't been able to access high-yield savings accounts with millions of dollars. Local consumers told the ABC7 I-Team they trusted an app and a bank. Now they're asking why their funds are frozen.
abc7chicago.com abc7chicago.com

Sal's take on the situation:

They Said Their Money Is GONE! $100 Million FROZEN! What Now?​

Mar 23, 2025 #silver #gold #preciousmetals


12:51
 
Yeah, but we've got things under control now.
No more failures going forward, fer sure.
 
Just as the industry saw unrealized losses in securities portfolios stabilize last year, the fourth quarter changed all that, putting renewed pressure on banks in the year ahead and raising fresh concerns about valuations, mergers and whether institutions will be forced to sell securities at a loss.

Bond yields have been on a bumpy ride. As bond yields rise, bond values fall, sometimes leaving banks with unrealized losses on the balance sheet from previously purchased bonds.

Unrealized losses on securities increased by 32.5% from the third quarter and 1% from a year earlier, to $482.4 billion on Dec. 31, according to data recently reported by the Federal Deposit Insurance Corp. The agency noted that longer-term interest rates, in particular the 30-year mortgage and10-year Treasury rates, increased significantly during the quarter, decreasing the value of securities on banks’ books.

As of March 17, the 10-year Treasury reversed course again, dropping to 4.29%, but rates are still higher than they were at the end of the third quarter.

The stakes are high, and bank executives and boards must decide whether to hold onto these assets as they slowly mature or cut their losses and remove a worrisome asset from their balance sheet.

Though bankers have historically resisted selling securities at a loss, preferring to hold them until maturity, this mindset has somewhat shifted in the past year, according to investment bankers. For over a year now, banks have been shedding securities to create earnings stability and flexibility down the road.

“The reality for a long time was that recording big securities losses was a dogmatic no-no,” says Brian Leibfried, head of bank insights at investment bank Performance Trust Capital Partners.

“There was a mantra to wait for the assets to mature, but if you do that, you will under-earn for a long, long time,” Leibfried adds. “Once the dogma was broken down, people became more willing to get rid of assets that no longer served a purpose. We’re seeing more people cut loose.”
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More:
www.bankdirector.com

Banks Have Been Unloading Bonds at a Loss. Is That a Good Thing?

With a rollercoaster ride in long-term bonds, banks have a tough decision to make.
www.bankdirector.com www.bankdirector.com
 
UK version of FDIC deposit insurance:
The Prudential Regulation Authority (PRA) has today proposed to raise the deposit protection limit of the Financial Services Compensation Scheme (FSCS) from £85,000 to £110,000.

The deposit protection limit – which represents the maximum amount of money the FSCS typically protects should a depositor’s bank, building society or credit union become insolvent – has been set at £85,000 since 2017.

The proposed increase takes into account inflation since the limit was last changed, and is designed to give consumers confidence that their money is safe if their UK-authorised bank, building society or credit union fails. If taken forward, the new limit would apply to firms that fail from 1 December 2025.

Sam Woods, Deputy Governor for Prudential Regulation and CEO of the PRA said: “Confidence in our financial system is an essential foundation for economic growth. We want to support confidence in our banks, building societies and credit unions by raising the amount that people can keep in their account which is covered by the deposit guarantee scheme to £110,000 per person, so all that money is safe even if the firm fails.”

Martyn Beauchamp, CEO of the FSCS, said: “Depositor protection is what FSCS is best known for, as it covers the money held in our day-to-day current accounts and savings. Consumers tell us that the existence of FSCS protection is a key driver of their trust in financial services, and this trust is in turn a critical component of stability and growth. It’s important that FSCS’s limit is reviewed to ensure it stays appropriate and relevant.”

Rocio Concha, Which? Director of Policy and Advocacy, said: "Raising the deposit protection limit is a sensible decision to support consumer confidence in the financial service industry. At a time when the government and regulators are going for growth, this decision is a reminder that strong consumer protections and economic growth go hand in hand."

Eric Leenders, Managing Director for Personal Finance at UK Finance, added: “The FSCS provides depositors with valuable protection and underpins confidence in the UK’s financial system. The current limit of £85,000 was set back in 2017 and so it makes sense to review it. We look forward to working with the Prudential Regulation Authority as part of their consultation into the wider FSCS deposit protection system”.

The FSCS, established in 2001, has paid compensation of £10.1 million to depositors in the past three full financial years, primarily in relation to small credit union failures. Since it was established, the FSCS has paid over £20 billion, primarily in relation to deposit failures during the 2008 financial crisis.

The proposal comes as part of a wide-ranging consultation on deposit protection provided by the FSCS. Other proposals include:
  • An increase in the limit applicable to certain temporary high balance claims – used for qualifying life events like buying or selling a house and payouts from insurance policies – from £1 million to £1.4 million, with effect from 1 December 2025.
  • Introducing rules needed to facilitate the Bank Resolution (Recapitalisation) Bill, which proposes a new resolution tool enabling industry funds provided via the FSCS to be used to recapitalise a failing firm to support its sale or transfer to a bridge bank. The PRA proposes to make these rules once the relevant provisions in the Banking Resolution (Recapitalisation) Bill have been enacted and brought into force.
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www.bankofengland.co.uk

The Prudential Regulation Authority proposes raising FSCS deposit protection limit to £110,000

The Prudential Regulation Authority (PRA) has today proposed to raise the deposit protection limit of the Financial Services Compensation Scheme (FSCS) from £85,000 to £110,000.
www.bankofengland.co.uk www.bankofengland.co.uk
 
Nic Carter's latest:
  • During Silicon Valley Bank’s (SVB) 2023 collapse, then-FDIC chair Martin Gruenberg rejected multiple credible offers to buy the bank and its deposits, according to people with firsthand knowledge
  • Sources say top VCs lobbied D.C. to bail SVB out for the sake of startups — to no avail, until Nancy Pelosi called the White House and asked that the bank’s uninsured depositors be made whole
  • The FDIC seized Signature bank to invoke the Systemic Risk Exception, which would allow uninsured depositors at SVB and other banks to be made whole, even though Signature was solvent and had the liquidity to handle the crisis, sources allege
  • The FDIC is currently trying to cover its tracks by investigating Signature as a possible precursor to legal action against the bank’s former executives
--
The following piece of reporting proposes an alternative history of the events that led to the closure of Signature Bank in March 2023, based on conversations with sources and information in the public record. As with my reporting on Silvergate and the Operation Choke Point 2.0 scandal (which has since been validated by subsequent reporting and Congressional investigations), my sources include eight individuals with direct first-hand knowledge of the events reported herein. However, due to the highly sensitive nature of the information being shared, I am constrained in what I can share about their identities, and I can’t speak to their connection to the parties discussed here. Thus, readers would do well to approach my account with skepticism.

That said, my record speaks for itself. In early 2023, before the banking crisis kicked off, I was one of the first to report on the phenomenon that would become known as Operation Choke Point 2.0 — a coordinated crackdown led by the Biden administration against the crypto industry, operationalized through bank supervision. After my initial report, the three largest crypto-friendly banks found themselves either self-liquidated (Silvergate) or shut down by regulators (Silicon Valley Bank and Signature). The remaining few banks that offered services to crypto firms faced a variety of subsequent hostile consent orders and enforcement actions. As a result, for two years — until Trump’s election — ordinary, lawful crypto startups were largely frozen out of the traditional banking system.

My findings were initially labeled a conspiracy by the press and the administration, but they have since been validated in court documents, such as the FOIAed materials¹ released as part of Coinbase’s lawsuit against the FDIC. Regulators such as incoming FDIC Chair Travis Hill² and Fed Chair Jerome Powell³ have acknowledged that crypto firms struggled with debanking under Biden. The doctrine of reputational risk in bank assessment, which facilitated Choke Point 2.0, has since been withdrawn by both the FDIC⁴ and the OCC⁵. And new data shows a notable spike⁶ in bank account closures that took place between March 2022 — a month after Trump-appointed FDIC Chair Jelena McWilliams resigned — and October 2024, immediately before President Trump was re-elected.

Much evidence remains hidden, but could be freed by Congressional subpoena or civil litigation — as was the case with payday lenders during Operation Choke Point 1.0. My core assertion has always been that the FDIC and Fed imposed a 15 percent limit on crypto deposits at banks following the FTX crisis, and we know this to be the case today. Of course, due to a culture of secrecy, FOIA evasion, and verbal rather than written guidance passed down by banking regulators, smoking guns have been hard to come by. As before, consider this piece an alternative interpretation of a story we’ve been officially told. I firmly believe the evidence will validate my account.
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More (long):
www.piratewires.com

Signature Didn’t have to Die, Either

cataloging the four days of chaos that led to the collapse of signature bank during the
www.piratewires.com www.piratewires.com
 
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