LAKE FOREST, Ill.—Surveying the 2014 financial marketplace, Moebs $ervices has identified 10 events—the five worst and five best—that it says will continue to impact financial Institutions in 2015.
“Each of these events will affect financial institutions in 2015, for better or for worse,” said Michael Moebs, economist and CEO at Moebs $ervices.
Worst:
5. Federal Reserve Chair Janet Yellen continues Quantitative Easing (QE2) for much of 2014, unnecessarily prolonging economic uncertainty for Main Street and keeping underemployment high.
4. The CFPB issues prepaid card rules in 900-page proposal. This includes a major change to prepaid card ODs, signaling the end of overdrafts.
3. The Federal Reserve sits on $2.6 trillion in excess bank reserves, and withholds implementing a major monetary tool to assist economic growth—charging for excess reserves.
2. Loan growth is 13.6% less than 2008 for Main Street institutions who provide credit to small businesses employing 65% of new workers.
1. The average consumer checking account balances is at all-time historical high of $6,150, suggesting economic uncertainty continues into 2015.
Best:
5. Federal Reserve Chair Janet Yellen stops Quantitative Easing on October 29, 2014 ending six years of a massively controversial, unprecedented Fed policy. The verdict is still out on the unintended consequences for employment and inflation.
4. Introduction of Apple Pay shakes up the payment system and establishes the future of secure mobile payments.
3. Walmart introduces its GoBank checking account, becoming a major competitor to Main Street institutions overnight. Walmart’s 2015 goal is 1,800 new accounts per store to offset interchange expense.
2. Bank of America drastically redesigns checking accounts and sets a new benchmark to eliminate checking as a loss leader.
1. Net Income gains for Main Street institutions in 2014 provide a much-needed boost to capital strength headed into an uncertain 2015.
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