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The Biggest Concerns for Lenders THURSDAY JUNE 10, 2021 VOL. 186 No. 110 AMERICANBANKER.COM Follow us on Twitter @AmerBanker LendingClub builds on 5 Radius Bank acquisition with exec moves The biggest concerns The San Francisco company has promoted or hired several bankers to steer growth in for lenders retail and commercial banking operations just months after completing its purchase of See story on page 4 Radius. Page 4 Very important Criǎcally important Mark Cuban-backed bank 6 startup valued at $4 billion in SPAC deal 100% Dave, a banking startup that’s been backed by investors including Mark Cuban and 80% Capital One Financial, agreed to go public in a deal with a blank-check firm that values 60% the company at $4 billion. Page 5 40% Goldman Sachs invests in blockchain backbone firm 20% 7 Blockdaemon Blockdaemon has seen rapid growth in the 0% Retenǎon of Enhancing UX at Beer insulaǎng Measuring ops Implemenǎng past year, and has won customers including staff point of sale against volume employee new tech JPMorgan Chase and Citigroup. Page 5 fluctuaǎon producǎvity Source: The Mortgage Collaborative Mastercard Foundation gives 8 $1.3 billion for Africa vaccines The Mastercard Foundation will provide $1.3 billion to support the coronavirus dailybriefing Wells Fargo’s 2% cash-back vaccination program in Africa, the continent 3 card is a bid to bolster with the lowest inoculation rate. Page 6 lagging unit Have banks dodged corporate The product, which will compete against Mastercard white-labels True 1 tax bullet under Biden? Citi’s Double Cash card, is the first step 9 Name to reach more issuers The president had campaigned on a 28% in CEO Charlie Scharf’s revamp of a Global Payments’ TSYS subsidiary and corporate tax rate — threatening to undo business segment that has long trailed top BM Technologies will offer the program, much of the Trump-era cuts — and banks competitors. Page 3 which allows transgender and nonbinary were seen as more vulnerable than other consumers to use their preferred name on industries. But the administration appears Staff retention, payment cards. Page 6 open to a lower rate as part of broader 4 volume fluctuation among legislative talks. Page 2 top lender worries for 2021 Klobuchar takes a blunt In the aftermath of 2020’s historic year 10 approach to big business Regions buying industrial loan of mortgage originations, lenders are In “Antitrust,” Sen. Amy Klobuchar offers 2 company EnerBank USA concerned with keeping employees and little nuance in weighing the costs and The deal for the Salt Lake City-based home insulating themselves from the negative benefits of concentrated economic power, improvement lender, which Home Depot effects of the boom and bust cycle, according David J. Evans of Arizent writes. Page 7 tried to acquire more than a decade ago, is to a survey from The Mortgage Collaborative. part of a larger effort by Regions Financial to (See chart above.) Page 4 diversify its home lending business. Page 3 THURSDAY JUNE 10, 2021 AMERICANBANKER.COM PAGE 2 Congress,” said Paul Merski, group executive tend to pay higher effective tax rates than TAX REFORM vice president for congressional relations other industries. and strategy at the Independent Community “Banks end up being at the high end of Bankers of America. “I think there’s probably taxpayers as it compares to the statutory rate,” Have banks virtually no Republican support at all, for any he said. “There is little difference between the of these tax increases.” effective rate and the statutory rate when it dodged For weeks, Biden was negotiating with comes to banks.” Sen. Shelley Moore Capito, R-W.Va., over Biden’s comments suggesting he is open an infrastructure plan in the hopes of to lowering his initial proposed corporate tax corporate tax reaching a compromise with congressional rate come as Senate Minority Leader Mitch Republicans. But those talks reportedly broke McConnell, R-Ky., has said that changes to the bullet under down on Tuesday without a deal. A bipartisan 2017 tax cuts are a “red line” for Republicans group of centrist lawmakers, including negotiating the infrastructure plan. Senate Banking Committee member Kyrsten The CEOs of some of the largest U.S. Biden? Sinema, D-Ariz., is said to be working on an banks also warned lawmakers last week that alternative proposal. substantial tax increases would hurt their By Neil Haggerty Biden had initially proposed investing customers. June 08, 2021 more than $2 trillion in infrastructure “Our small and medium-size businesses, WASHINGTON — After bankers feared projects across the country. Biden’s initial of which we have many, are worried about tax how Democratic control of Congress and the American Jobs Plan proposal included the increases slowing down their ability to invest White House would affect their bottom lines, 28% corporate tax rate to help offset the new in employees, invest in new equipment, be the industry could escape a dramatic hike in spending. competitive,” Bank of America CEO Brian corporate taxes thanks to infrastructure talks. Biden has since scaled back his initial Moynihan told the House Financial Services President Joe Biden had campaigned on proposal but has stated that he wants to Committee on May 27. a proposal to raise the corporate tax rate to spend at least $1 trillion on an infrastructure Mills said Biden is likely trying to find a 28%, threatening to undo much of the tax package. As his proposed infrastructure middle road between those who championed reforms pushed by former President Donald investment has declined, so have his the Trump administration’s tax cuts and Trump. expectations for what corporations will pay progressives who don’t believe corporations But the Biden administration has in taxes to fund the new package. are paying enough in taxes. appeared to backtrack somewhat as a Biden said at an event in Louisiana on “There is not the political support for a 28% result of the intense negotiations over an Sunday that he thinks the corporate tax rate tax hike,” Mills said. “I do think that the focus infrastructure plan, suggesting he was open should be between “25% and 28%.” of Biden continues to be a desire to push a to a lower rate, 25%. That 3-percentage-point “I’m willing to hear ideas from both sides,” message that what he is trying to do is getting difference could cushion the blow of any tax Biden said. “I’m meeting with my Republican folks to pay their fair share.” plan for banks, which are more sensitive to friends up in the Congress. … I’m ready to Analysts are projecting that the corporate fluctuations in the corporate tax rate than compromise.” tax rate will likely increase to no more than other industries. Mills said that the developments are 25% if Biden is able to get an infrastructure “The issue here is that banks are most particularly positive for banks because they bill through Congress. exposed to changes in the rate, because as an industry, they generally pay very close to the statutory rate,” said Ed Mills, a policy analyst Established 1836 One State Street Plaza, 27th floor, New York, NY 10004 for Raymond James. Phone 212-803-8200 AmericanBanker.com Banks were considered one of the biggest beneficiaries of the Trump tax cuts, seeing Editor in Chief Alan Kline 571.403.3846 Copy Editor Neil Cassidy 212.803.8440 record profits as a result of the corporate tax Managing Editor Dean Anason 770.621.9935 rate being slashed from 35% to 21%. Reporters/Producers The industry was widely expecting to Executive Editor Bonnie McGeer 212.803.8430 Laura Alix 860.836.5431, Kate Berry 562.434.5432 pay more in taxes with unified Democratic Washington Bureau Chief Joe Adler 571.403.3832 control. But with Democrats’ slim majorities Executive Editor, Technology Miriam Cross 571.403.3834 in the House and Senate and Republicans Penny Crosman 212.803.8673 Jim Dobbs 605.310.7780 unified in opposition to tax increases, signs BankThink Editor Rachel Witkowski 571.403.3857 are pointing to a smaller tax increase than John Heltman 571.403.3847, Allissa Kline 716.243.2679 Community Banking Editor Paul Davis 336.852.9496 anticipated. Hannah Lang 571.403.3855 “I think the administration is already Contributing Editor Daniel Wolfe 212.803.8397 John Reosti 571.403.3864, Gary Siegel 212.803.1560 backtracking on some of the more aggressive Digital Managing Editor tax increases, because they’re going to have Christopher Wood 212.803.8437 Kevin Wack 626.486.2341 a lot of trouble getting support through For up to date and complete coverage go to AmericanBanker.com THURSDAY JUNE 10, 2021 AMERICANBANKER.COM PAGE 3 James Lucier, managing director at Capital Ascentium Capital, an equipment finance consumer franchise that lags behind those Alpha Partners, said even some Democrats firm based in Texas. And in 2019, it bought of the bank’s top competitors. are concerned that higher corporate income Highland Associates, a Birmingham-based The Active Cash Card will offer customers taxes will make the U.S. less competitive. asset management firm focused on the health 2% cash back on all purchases, a rewards “Despite their willingness to raise the care industry. proposition that better positions Wells Fargo corporate tax rate, there is still a limit to how That same year, Regions also exited its to compete with Citigroup’s Double Cash far congressional Democrats will go,” Lucier relationship with the point-of-sale home card. said. “A 28% rate would give the U.S. the improvement lender GreenSky, saying that it The card, which will launch in July and highest combined federal, state and local or wanted to pursue more direct relationships have no annual fees, will be followed by total national tax rate in” the Organisation for with consumers.
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