Morning Consult Finance: JPMorgan Said to Fire Workers Accused of Taking Money Under COVID-19 Business Aid Program



Top Stories

  • JPMorgan Chase & Co. has fired several workers who are accused of taking money under the Economic Injury Disaster Loan program that was meant to help businesses hit by the coronavirus pandemic with grants up to $10,000, according to a person familiar with the situation. The JPMorgan staff members who had deposited suspicious funds through the program in their Chase checking accounts made up a “very small” part of the suspicious activity the bank found after the Small Business Administration asked banks to probe any suspicious activity related to the program, the person said. (Financial Times)
  • Senate Republicans plan to force a vote on a “skinny” coronavirus pandemic relief bill today, but it is likely to be blocked by Democrats and isn’t expected to help Republicans in ongoing negotiations with Democratic lawmakers and the White House. Yesterday, Senate Appropriations Committee Chairman Richard Shelby (R-Ala.) said that the new bill isn’t going to go through “unless something really broke through.” (The Wall Street Journal)
  • With bipartisan compromise on a new coronavirus relief package stalled, two people aware of deliberations said that White House officials have discussed measures to unilaterally give aid to the airline industry and to address unemployment benefits through executive actions. The White House has also considered setting aside more money for school vouchers and making changes to President Donald Trump’s payroll tax cut, all without Congress. (The Washington Post)

Chart Review

Events Calendar (All Times Local)

09/10/2020
Bipartisan Policy Center event: “Climate Risks in Financial Markets” 9:30 am
09/14/2020
NAFCU Virtual Congressional Caucus
Digital Mortgage 2020
09/15/2020
NAFCU Virtual Congressional Caucus
Women in Housing & Finance event: “Access to Credit: How Inclusive Is the U.S. Financial System” 12:00 pm
CFPB Listening Session with Members of the Bureau’s Taskforce on Federal Consumer Financial Law 2:30 pm
View full calendar


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General

In ongoing debate over Fed’s Main Street program, lawmakers reach little consensus
Rachel Siegel, The Washington Post

Lawmakers on a top banking panel largely agree that the Federal Reserve’s Main Street lending program has fallen short. But they’re debating whether or how to change the rules and allow the Fed to make more, albeit riskier, loans to struggling businesses.

Fed Debates How to Implement New Policy Strategy
Nick Timiraos, The Wall Street Journal

Federal Reserve officials forged an agreement last month on a new framework governing how they will conduct policy over the long run. In preparing for a September meeting, they are debating how exactly to implement this strategy for an economy recovering from a severe and unusual downturn.

Do Jobless Benefits Deter Workers? Some Employers Say Yes. Studies Don’t.
Patricia Cohen, The New York Times

When Clips & Clamps, a metal forming company in Plymouth, Mich., advertised for a die setter and operator last year, more than a hundred applications came sailing in. This summer, the company sought to hire another operator, offering $17 to $22 an hour and benefits.

Trump’s lead over Biden on the economy appears vulnerable, a potential turning point
Heather Long and Jeff Stein, The Washington Post

Democratic presidential nominee Joe Biden is intensifying his efforts to dislodge President Trump’s advantage on economic issues with voters, fueling an intensifying debate over which candidate could better handle the fragile recovery. On Wednesday, Biden pushed tax proposals that he said would help bring jobs back to the United States, trying to hit Trump on an issue the Republican campaigned on four years ago. 

U.S. Job Openings Leveled Off Late in the Summer
Eric Morath, The Wall Street Journal

The number of available jobs in the U.S. leveled off late this summer, the latest sign momentum in the labor market is easing six months after the coronavirus pandemic took hold in the U.S. The increase in the number of job postings, a real-time measure of labor-market activity, has slowed dramatically since late July, and last week stood about 20% below 2019 levels, according to data the job-search site Indeed.com shared with The Wall Street Journal.

A Surprisingly Durable Recovery Faces Tougher Tests
Greg Ip, The Wall Street Journal

When the stock market began to rally back in March, it seemed oblivious to an economy sliding into its worst contraction since the Great Depression. Nearly six months later, some of that optimism has proved justified. The economy touched bottom in April, and it has clawed back ground every month since. 

Unemployment Claims Expected to Show Continued Slow Decline
Sarah Chaney, The Wall Street Journal

Applications for state unemployment benefits likely ticked down last week, a sign of gradual improvement in the labor market after the coronavirus pandemic struck this spring. Economists forecast jobless claims declined slightly to a seasonally adjusted 850,000 last week from 881,000 a week earlier.

Euro Gains Before ECB Meeting; U.S. Futures Steady: Markets Wrap
Cecile Gutscher, Bloomberg

The euro strengthened and European stocks fluctuated as investors waited for the outcome of the European Central Bank meeting. U.S. equity futures were little changed, suggesting the S&P 500 could take a pause after rallying the most since June. In Europe, the FTSE 100 Index led losses on fears that Brexit talks are falling apart. 

Banking

JPMorgan, Morgan Stanley Join Call for U.S. Carbon Pricing
Eric Roston and Benjamin Bain, Bloomberg

The U.S. government should start making businesses pay for their greenhouse gas emissions to help combat global warming, according to a powerful group of finance and energy titans including Morgan Stanley, JPMorgan Chase & Co. and BP Plc. Climate change poses a significant risk to the financial system and regulators must “move urgently and decisively,” the group said in a report that was signed by executives from the three firms and more than two dozen other global businesses, investors and nonprofit organizations.

Goldman Sachs joins JPMorgan in saying Wall Street workers will return to the office in rotations
Hugh Son, CNBC

Goldman Sachs told employees that it would allow them to return to the office in shifts, a rotational approach similar to what JPMorgan Chase announced last month for its investment bank. In a memo sent Wednesday from Goldman CEO David Solomon and his top deputies, the bank alerted its workforce that it was preparing for more employees to return to its offices around the world.

Citi promotes Carla Hassan to chief marketing officer
Allissa Kline, American Banker

Citigroup has promoted Carla Hassan to the new role of chief marketing officer, part of a move to combine its marketing and branding divisions. Hassan, who joined Citi in 2018 as chief brand officer, will continue to manage its branding and sponsorships.

Financial Products and Investments

Wall Street brushes off political tensions to dig deeper into China
Thomas Hale et al., Financial Times

BlackRock, Citigroup, Vanguard and JPMorgan Chase have struck a succession of deals.

Wall Street bids a not-so-fond farewell to exchange traded notes
Robin Wigglesworth, Financial Times

The unloved cousins of the ETF have been criticised for being riskier than they appear.

Housing and GSEs

Mortgage industry provides commentary on CFPB’s proposed changes to QM loan definition
Alex Roha, HousingWire

Prior to the deadline for public commentary on Tuesday, housing industry trade groups, companies and organizations responded to the Consumer Financial Protection Bureau’s proposed rulemaking for the general qualified mortgage definition and the expiration of the QM patch in January 2021. In June, the bureau released two proposals regarding the QM Patch, which allows loans sold to Fannie Mae or Freddie Mac to exceed the 43% debt-to-income ratio the Bureau had established in its Ability to Repay/Qualified Mortgage rule.

Mortgage demand from homebuyers surges 40% from a year ago amid sales spree
Diana Olick, CNBC

The end of August usually marks the beginning of the slow season for housing, but as with everything else, this year’s trends are like no other. Mortgage applications to purchase a home rose 3% last week from the previous week and were a stunning 40% higher from a year ago, according to the Mortgage Bankers Association’s seasonally adjusted index.

Taxes

Biden Pushes Higher Taxes on U.S. Companies’ Foreign Profits in Pitch to Midwest Voters
Richard Rubin and Ken Thomas, The Wall Street Journal

Democratic presidential candidate Joe Biden called Wednesday for higher taxes on U.S. companies’ foreign income and special tax breaks for domestic manufacturing, appealing to blue-collar workers during a trip to Michigan. The plan, which comes on top of corporate tax increases he had previously proposed, would reverse many of the changes in the 2017 tax law signed by President Trump. 

Biden Offshore Tax Plan Unlikely to Renew Rust Belt Factories
Laura Davison, Bloomberg

Democratic presidential nominee Joe Biden’s plan to curb corporate offshoring and to renew domestic manufacturing may block companies from parking profits in tax havens, but may not do enough to make shuttered factories hum again. Biden’s proposal uses a carrot-and-stick approach that raises taxes on a corporation’s foreign profits but rewards companies with tax incentives for moving jobs and investment back to the U.S.

Trump payroll-tax deferral for federal workers sparks backlash
Naomi Jagoda, The Hill

The Trump administration’s decision to require the deferral of payroll taxes for federal workers and military members is creating more divisions around the president’s attempt to provide short-term economic relief for workers during the coronavirus pandemic. While many private sector employers are not expected to defer their employees’ Social Security payroll taxes under Trump’s order, the federal government is making it mandatory for its employees. 

Financial Technology

Mastercard launches digital currency kit for central banks
John Jeff Roberts, Fortune

In the 10 years since Bitcoin came on the financial scene, central banks have quietly been dabbling in digital currencies of their own. Now, Mastercard has unveiled a tool designed to simulate how those currencies would work in the real world.

Opinions, Editorials and Perspectives

Fintech Can Come Out of the Shadows
Brian P. Brooks and Charles Calomiris, The Wall Street Journal

If it lends like a bank and processes payments like a bank, is it a bank? Maybe not, depending on the outcome of a case pending in the Second U.S. Circuit Court of Appeals. 

The surprising resilience of the Covid consumer
The Editorial Board, Financial Times

How to ensure the surge in retail sales continues.

Research Reports

The Lost Generation? Labor Market Outcomes for Post Great Recession Entrants
Jesse Rothstein, The National Bureau of Economic Research

I study cohort patterns in the labor market outcomes of recent college graduates, examining changes surrounding the Great Recession. Recession entrants have lower wages and employment than those of earlier cohorts; more recent cohorts’ employment is even lower, but the newest entrants’ wages have risen.

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