Deposits

Treasury Under Secretary for Domestic Finance Jonathan McKernan said he is concerned that the traditional bank funding model of taking in low-cost deposits and making more lucrative loans could be set for a shakeup as fintech challengers get more competitive.

Comerica Bank in Dallas has been around since before the Civil War. But the banking crisis of 2023 tamped down on its access to low-cost funding, and the problem persisted until it finally decided to sell itself.

Many banks lowered the interest rates they pay on certificates of deposits and high-yield savings accounts in September, capitalizing on the Fed's 25-basis-point cut.

The acquisition would allow Fiserv network banks to insure larger deposits and could bolster the company's new foray into stablecoins.

In its recently passed bill, Congress prohibited stablecoin issuers from offering interest, but left the door open to "rewards" from exchanges. That provision could drive adoption of stablecoins and compete for deposits, but experts say the technology would have a long way to go.

Execs say other banks are still more of a rival for deposits than the digital currency.

Opposition is building against a bipartisan bill that would raise deposit insurance for business accounts, with increased deposit insurance premiums a chief concern.

A bipartisan amendment from Sens. Bill Hagerty, R-Tenn., and Angela Alsobrooks, D-Md., would expand deposit insurance for business accounts, but the industry is split on who should bear higher FDIC premium costs.

More nonbank digital asset firms are applying for national trust charters, a development that many banking organizations oppose due to what they say is inadequate oversight, lack of congressional intent and no FDIC backstop.

Amid waning federal support for community development financial institutions and minority depository institutions, a program launched by two banking trade groups is beginning to generate a steady stream of deposits for mission-focused lenders.

First Foundation is in transformation mode, after a capital infusion and new management gave it some power to remix its challenged balance sheet. But the bank just took its third quarterly loss out of the last four quarters.

The regional bank's cloud-based software platform will be one of the first of its kind, a top executive said Friday.

Prosperity Bancshares announced plans to buy Corpus Christi-based American Bank Holding Corp. in an all-stock deal.

The Republican Freedom Caucus wants to combine the market structure bill with another measure prohibiting the formation of a Central Bank Digital Currency. That move could tank the market structure bill's chances of becoming law, and with it the banking industry's best chances of getting its priorities enacted.

Both regional banks operate health savings account businesses, which could gain more customers, more fee revenue and more low-cost deposits if Congress includes a major HSA expansion in its final budget reconciliation bill.

A class action lawsuit against the bank's top executives and its auditor in connection with its 2023 failure was dismissed by a federal judge, who said the court did not have the authority to hear the case.

Regulators' decision to lift a seven-year-old cap on the size of the megabank's balance sheet will produce benefits over the long haul, but it won't result in any sudden gains, according to CFO Michael Santomassimo.