| | TOP STORIES YOU MISSED | Featured Stories | | | | | HOW THE $2T CORONAVIRUS STIMULUS COULD AFFECT BANKS On Wednesday, the US Senate passed a colossal $2 trillion stimulus bill to protect consumers and businesses from the fallout of the coronavirus pandemic, American Banker reports. The wide-ranging measures would include regulatory changes as well as direct payments to consumers. While the bill has yet to be voted on by the House of Representatives, its details are beginning to come into focus, particularly with regard to how it could benefit US banks.
Here are the key elements of the bill aimed at bolstering banks:
Looser capital requirements for smaller banks will empower those institutions to better serve businesses in their communities. The revival of 2008 financial crisis-era federal protections for banks will encourage consumer trust in the institutions. We think that both of these elements of the bill will benefit banks’ relationships with consumers and businesses for the duration of this crisis and beyond it. |
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| | | | | WELLS FARGO REQUESTS ASSET CAP LIFT Wells Fargo asked the Federal Reserve to lift its $1.95 trillion asset cap so that it can extend support to businesses and consumers hit by economic fallout from the coronavirus pandemic, the Financial Times reported. The cap was imposed in 2018 in response to Wells Fargo’s 2016 fake account scandal, and it limits what the bank can hold on its balance sheet. It’s been a priority of CEO Charles Scharf to have the cap lifted, in addition to other brand rehabilitation efforts. Regulators are encouraging banks to extend credit to customers who are financially impacted by the coronavirus — but the asset cap hinders Wells Fargo’s ability to do so. Getting its growth cap even temporarily removed and helping customers during this time could position Wells Fargo more favorably in the long term. |
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| | | REVOLUT DEBUTS IN THE US The UK neobank has officially launched its app and banking services in the US, allowing customers to sign up for a Revolut account and debit card, TechCrunch reports. Revolut has partnered with Metropolitan Commercial Bank for US licensing and FDIC insurance. US accounts currently only come with core Revolut features, such as very low-fee currency conversions, the ability to receive salary deposits two days in advance, and in-app features like transaction notifications, card freezing and unfreezing, and the ability to generate a virtual debit card.
There is both an upside and a downside to the timing of Revolut’s US launch, which comes in the midst of the coronavirus pandemic:
Incumbent banks’ branch advantage is diminished by the coronavirus. But consumers may be hesitant to try a new neobank in uncertain economic times. |
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