On The Money – Bank Chiefs Under Fire For Low Savings Interest Rates

Lawmakers want to know why interest rates on savings accounts aren’t rising as fast as the Federal Reserve’s base interest rate range. We’ll also look at GOP resistance to a key Sen. Joe Manchin (DW.V.) priority and up to $45 billion in pandemic fraud.

But first, find out why falling house prices aren’t helping young Americans much.

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Lawmakers slam big bank CEOs over savings rates

Congressional lawmakers criticized U.S. bankers this week for failing to raise interest rates on savings accounts held by ordinary consumers despite a series of major federal funds rate hikes by the Federal Reserve.

  • Interest rate hikes by the Fed make it more expensive for banks and other financial institutions to borrow money from each other, which theoretically expands the purchasing power of the dollar and lowers inflation.
  • But higher interest rates also make it more lucrative for banks to lend money, an increase in revenue they could pass on to consumers in the form of higher interest rates on savings accounts. base and money market.

“One of the only silver linings in a rising interest rate environment is that savers are supposed to be rewarded for their savings,” Assemblyman Michael San Nicolas (D-Guam) said during a committee hearing. House Financial Services on Wednesday.

The committee heard testimony from executives of JP Morgan Chase, Wells Fargo and Bank of America, among other major US banks.

Tobias Burns of The Hill has more here.


Republicans line up against Manchin license reform bill

Senate Republicans are lining up against the permissions reform bill that centrist Sen. Joe Manchin (DW.Va.) unveiled Wednesday night, shortly before it was added to a funding bill must-have government scheduled for the prosecution next week.

As a result, leading Republicans say an interim funding bill with Manchin language reforming the permitting process for energy projects will not have enough support to pass.

  • Manchin’s home state colleague, Senator Shelley Moore Capito (right), announced Thursday morning that she supports his permissions reform bill, but most Republicans speak out against the proposal .
  • GOP senators say Capito is adopting Manchin’s proposal because she would approve the completion of the Mountain Valley Pipeline, a natural gas pipeline that would stretch more than 300 miles through West Virginia. But Senate Republicans who do not benefit from this project are much more skeptical.
  • Manchin’s bill also faces opposition from his own caucus. Sen. Bernie Sanders (I-Vt.) is urging fellow Democrats to vote against it, and Sen. Tim Kaine (D-Va.) announced Wednesday that he would not support the bill because of the language endorsing it. completion of the Mountain Valley Pipeline, which would stretch 100 miles from its home state.

Alex Bolton of The Hill has the recap here.


Labor Department watchdog identifies $45 billion in potential pandemic unemployment fraud

The Labor Department’s inspector general on Thursday identified $45.6 billion in potential unemployment insurance fraud during the pandemic, a figure that far exceeds past estimates.

A sweeping federal relief package signed by former President Trump in March 2020 expanded the ability of individuals to receive unemployment benefits, leading more than 57 million people to apply within months.

  • The watchdog said fraudsters allegedly filed claims using suspicious email accounts or Social Security numbers of deceased and federal prisoners ineligible for benefits.
  • Some have also filed claims in multiple states, according to a news release from the inspector general.

“Hundreds of billions in pandemic funds have attracted fraudsters seeking to exploit the Unemployment Insurance program, resulting in historic levels of fraud and other abusive payouts,” the Labor Department inspector general said. , Larry Turner, in a press release. “I am extremely proud of how our team responded to this unprecedented crisis, despite significant resource constraints and data access issues.”

Zach Schonfeld of The Hill breaks it down here.


Republicans block bill requiring black money groups to reveal donors

Senate Republicans voted on Thursday to block consideration of a bill requiring organizations that spend money on elections to promptly disclose the identities of donors who donate $10,000 or more during an election. electoral cycle.

The body did not invoke the closure of the measure, in a 49-49 vote. Every Republican present voted against the measure, while every Democrat voted for it.

The legislation, sponsored by Sen. Sheldon Whitehouse (DR.I.), has been a top priority for Democrats since the Supreme Court’s 2010 Citizens United decision that allowed corporations and other outside special interest groups to spend unlimited amounts on federal elections. .

Alexander Bolton of The Hill updates us here.

Good to know

Speaker Nancy Pelosi (D-California) on Thursday again signaled her support for an effort by Sen. Joe Manchin (DW.Va.) to accelerate energy infrastructure projects as part of a government spending package, as even as dozens of House Democrats opposed such a move.

The president stressed Thursday that House lawmakers are waiting to see the details of any package the Senate might pass, and she left open the possibility that the House could amend a bill passed by the Senate.

Here’s what else we’ve got our eyes on:

  • Russian President Vladimir Putin’s recent threat to use nuclear weapons will not stop US aid to Ukraine, the Pentagon spokesman said Thursday.
  • Meta is considering whether or not to restore former President Trump’s Facebook account with “great caution,” chief executive Nick Clegg said Thursday.
  • The Federal Trade Commission (FTC) has ordered Amazon founder Jeff Bezos and CEO Andy Jassy to testify as part of an investigation into the company’s Prime membership program.
  • Tesla is recalling more than one million vehicles due to issues with automatic systems for car windows that can pinch a driver or passenger and cause injury when closing.

That’s all for today. Thanks for reading and check out The Hill’s Finances page for the latest news and coverage. Well see you tomorrow.

Leslie M. Gill