Banks are likely to determine which of their branches will remain closed based on location rather than deposits, according to a report from Globest.com. Bank branches tend to carry higher rent rates than other businesses and their locations are often part of brand visibility strategy, notes Noah Shaffer, senior director of asset management for Confidant Asset Management.
Top executives from major US companies are asking Congress to extend aid beyond the Paycheck Protection Program and offer long-term loans to the hardest-hit businesses. Congress is also being asked to consider allowing PPP borrowers to receive a second round of funds.
Citigroup will offer its credit card customers the option to pay off Amazon purchases of $100 or more over a longer period of time with a lower interest rate, the bank said. Citi's US consumer banking head Anand Selva said the move is aimed at giving customers more flexibility "given the current environment."
Many business owners ended or phased out their relationships with big banks that failed to secure Paycheck Protection Program loans for them, while a significant number obtained PPP loans via a bank that had not been their primary lender, says a survey from Barlow Research Associates. Banks with less than $10 billion of assets constitute only 14% of the industry total, according to the Federal Deposit Insurance Corp., but they approved about 52% of the PPP loans, says the Small Business Administration.
Wells Fargo had to sell off assets worth hundreds of millions of dollars at the height of the coronavirus crisis to avoid violating Federal Reserve restrictions on its holdings, sources say. A surge in customers drawing down lines of credit reportedly grew the bank's balance sheet close to the $1.95 trillion asset cap imposed by the Fed.
Demand for online, small-dollar loans in the US declined during the height of coronavirus lockdowns, according to data from the Online Lenders Alliance. The demand could increase in the next few weeks if Congress does not reinstate a federal unemployment benefit.
Despite record unemployment, credit card debt among US consumers fell during the spring. Government stimulus payments in response to the coronavirus pandemic may have driven down demand for credit and helped consumers pay down their debt, industry executives say.
More Congressional support is needed for a plan that will automatically forgive Paycheck Protection Protection loans of $150,000 or less, writes Brendan Flanagan. Forgiving the loans would save businesses between $2,000 and $4000 and between 20 and 100 hours, Flanagan writes.
The House of Representatives has approved an amendment to a 2021 spending bill that would allocate $2 million for a postal banking pilot program. The amendment is co-sponsored by Reps. Bill Pascrell, D-New Jersey, and Marcy Kaptur, D-Ohio.
The coronavirus pandemic has highlighted the vulnerabilities inherent in the market for commercial mortgage backed securities and the need for a thorough restructuring of the US commercial real estate market, writes John Dizard.