• JPMorgan Chase & Co. will acquire First Republic Bank in a deal that was orchestrated by the Federal Deposit Insurance Corp. after a weekend of bidding for the struggling bank. JPMorgan, which will share the burden of losses with the FDIC, will take on about $173 billion of loans, $30 billion of securities and $92 billion in deposits in the deal, making the country’s largest bank even bigger. (Bloomberg)
• Billionaire investor and Berkshire Hathaway Inc. Vice Chair Charlie Munger said in an interview that while the current situation is “not nearly as bad as it was in 2008,” American banks face risk from their vast portfolios of “bad loans” as commercial property prices fall. Munger said that banks are already pulling back from lending to commercial developers, noting that “every bank in the country is way tighter on real estate loans today than they were six months ago,” as office buildings, shopping centers and other commercial properties face trouble. (Financial Times)
• Rep. Patrick McHenry (R–N.C.), chair of the House Financial Services Committee, said the committee will team with the House Agriculture Committee to present legislation to oversee the crypto sector in the “next two months,” following public hearings on the matter that are set to begin this month. (CoinDesk)
• Kathryn Ruemmler, a White House counsel under President Barack Obama who became a top attorney at Goldman Sachs Group Inc., held dozens of meetings with Jeffrey Epstein, according to a Wall Street Journal investigation of documents that included Epstein’s schedules. The meetings took place in the years after her White House service and before she arrived at Goldman, and a bank spokesperson said that Ruemmler had a professional relationship with Epstein related to her work at the law firm Latham & Watkins LLP. (The Wall Street Journal)
  

Worth watching:

• Chairman Rostin Behnam of the Commodity Futures Exchange Commission will participate in a fireside chat on “Moving Digital Assets Forward” at the Milken Institute’s 2023 Global Conference.

Correction: The Sunday Finance newsletter misstated the sourcing in a Reuters report that the FDIC was preparing to put First Republic Bank into receivership imminently. The source was a person familiar with the matter.

Voters’ Views of the U.S. Economy: Not Bad, but Not Great

Morning Consult

After being on pause for more than 3 years, student loan payments are expected to resume soon

Annie Nova, CNBC

Shortly after the Supreme Court makes its expected ruling on the Biden administration’s sweeping student debt forgiveness plan, the loan bills are expected to resume.

Top global regulator warns of ‘massive adjustment’ for financial system

Hannah Brenton, Politico

The world’s financial system needs a “massive adjustment” to cope with higher interest rates, and key rules will have to be revisited, according to a top global regulator. Klaas Knot, chair of the Financial Stability Board, an international standard-setting body, told POLITICO that rising interest rates fueled problems at several regional U.S. banks and similar losses may show up elsewhere.

Millions of student-loan borrowers could find out in the next 2 months if they will get Biden’s debt relief.

Ayelet Sheffey, Insider

A critical Supreme Court decision for millions of student-loan borrowers could come by the end of next month. There’s a lot at stake.

Grads share what it meant to have Snap CEO Evan Spiegel wipe out their student loans

Jane Thier, Fortune

On May 12, 2022, Snap CEO and co-founder Evan Spiegel and his wife Miranda Kerr, founder of beauty brand KORA Organics, delivered an astonishing message to the graduating class of Otis College of Art and Design in Los Angeles: Through a private donation to the school, the couple would be paying off the entire student loan debt of all 285 graduates.

Student loan servicers cut customer service hours ahead of payment restart

Katie Lobosco, CNN

Some student loan servicers have recently cut back on customer service hours, adding to the fear that borrowers won’t have sufficient support when transitioning back into repayment after a more than three-year pandemic pause.

Is your credit score driving up your car-insurance premium? Black and Latino New Yorkers face an ‘illogical and deeply unfair’ pricing model, a new report says.

Emma Ockerman, MarketWatch

Statewide, New Yorkers with clean driving records and excellent credit to match pay a weighted average annual premium of $730, found a report from the Consumer Federation of America published this week. Meanwhile, people with similarly good driving records and fair credit pay an average premium of $1,148, and those with poor credit pay $2,097.

Nearly three-quarters of millennials are living paycheck to paycheck: report

Jared Gans, The Hill

Almost three-quarters of millennials are living paycheck to paycheck, notably higher than other generations, according to a new report.

Man accused of killing Cash App founder Bob Lee intends to plead not guilty next week, his attorney says

Veronica Miracle et al., CNN

Nima Momeni, the man accused of killing Cash App founder Bob Lee in San Francisco, intends to plead not guilty next week, his attorney said.

Fed Set to Raise Interest Rates to 16-Year High and Debate a Pause

Nick Timiraos, The Wall Street Journal

Federal Reserve officials are on track to increase interest rates again at their meeting this week while deliberating whether that will be enough to then pause the fastest rate-raising cycle in 40 years.

Signs Are Mounting That a Debt Crunch is Looming

Neil Callanan, Bloomberg

Just when it seemed the US regional banking strains were starting to ease, First Republic Bank has leaped back into headlines, reigniting concerns of rising pain in the lending system.

The Building Boom Is Prolonging Market Pain

Ryan Dezember and Will Parker, The Wall Street Journal

The building boom has helped push unemployment to around its lowest level in more than 50 years. That is perplexing investors who want to see the Federal Reserve switch course on interest rates.

Republicans Effectively Voted to Raise Taxes. They’re Fine With That.

Richard Rubin, The Wall Street Journal

House GOP backed repealing clean-energy tax credits without offsetting tax cuts

Trickling Tax Revenue Complicates Debt Limit Talks

Alan Rappeport, The New York Times

A vote by House Republicans last week to lift the nation’s debt limit in exchange for deep spending cuts was the first step in what is likely to be a protracted battle over raising or suspending the borrowing cap to avoid defaulting on United States debt.

Kevin McCarthy Shores Up GOP Lines as Debt-Ceiling Battle Looms

Natalie Andrew, The Wall Street Journal

House Republicans urge White House to negotiate on budget cuts, while Biden wants ‘clean’ debt deal.

With debt bill adopted, far-right House Republicans ready for fiscal war

Tony Romm and Marianna Sotomayor, The Washington Post

The House Freedom Caucus pushed Speaker Kevin McCarthy for sharp spending cuts — and some members still want more.

Common ground on the debt limit? Here’s what to look for

Lindsey McPherson et al., Roll Call

​The House-passed debt limit and spending cut bill won’t survive bipartisan negotiations in full. But there are some potentially salvageable pieces of the GOP measure that could end up in a final deal.

SVB discussed selling up to $20bn in bonds months before bank run

Mark Vandevelde and Tabby Kinder, Financial Times

Lender considered drastic action to stem liquidity crisis as early as November last year, documents show.

The road to First Republic Bank’s collapse

Reuters

Banks have been staring at the biggest crisis since 2008 after two U.S. lenders collapsed in March and the turmoil has ratcheted up fears of a contagion and prompted action from the U.S. Federal Reserve, U.S. Treasury and the private sector.

US investors ditch green funds as ‘woke capitalism’ backlash bites

Kenza Bryan, Financial Times

Cash has flowed out of ESG strategies over past year even as sector continues to boom in Europe.

New York Stock Exchange exec mulling Michigan Senate bid

Ally Mutnick, Politico

The vice chair of the New York Stock Exchange is considering a run for Senate in Michigan, where Republicans have been searching for a candidate for retiring Sen. Debbie Stabenow’s seat.

Lazard to lay off 10% of its global workforce, impacting all its businesses

Palash Ghosh, Pensions & Investments

Lazard plans to slash 10% of its global workforce this year, with the layoffs affecting all of its businesses as part of the firm’s “cost-saving initiatives.”

California’s Housing Crisis Leaves College Students Eager to Live in Trailers

Christine Mai-Duc, The Wall Street Journal

At UC Santa Cruz, 44% of undergraduates are considered ‘obscenely rent burdened’

Home Buyers Are Eager but Sellers Are Scarce, Creating ‘Real Gridlock’

Gregory Schmidt, The New York Times

Homeowners with low-rate mortgages are delaying the decision to sell until market conditions change.

SEC looks down on UpToken, imposes crypto fines

Jonathan Stempel, Reuters

The U.S. Securities and Exchange Commission has fined Seattle-based Coinme and related defendants nearly $4 million for conducting an unregistered and misleading offering of a crypto asset called UpToken.

Mastercard Launches Crypto Credential Service for Cross-Border Transfers

Ian Allison, CoinDesk

The executive in charge of crypto products and blockchain at Mastercard (MA) said the payment processing company is bringing out a service designed to ensure transactions between users’ wallets are verifiable and compliant, beginning with transfers of digital assets between countries.

The Kingdom Of Bhutan Has Been Quietly Mining Bitcoin For Years

Iain Martin and Sarah Emerson, Forbes

Beneath the Himalayas, rivers fed by ancient glaciers supply the tiny kingdom of Bhutan with immense stores of hydroelectricity. For the past few years, Bhutan’s royal government has been quietly devising a new use for these reserves: powering its very own bitcoin mine.