Banking - McGraw-Hill Introduction to Business

Bank of America Fined $150 Million by Federal Regulators

July 12, 2023

According to consumer watchdogs, for years Bank of America charged customers a variety of “junk fees” while also mishandling accounts. Not only did the financial giant withhold perks that were promised to some credit card holders, but it also double-charged overdraft fees and secretly opened cards in customers’ names without their knowledge. As a result, Bank of America received a $150 million fine from the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau (CFPB), which Continue reading →

Ethics, Banking, Regulation, Bank of America, Fraud, Consumer Financial Protection Bureau

Chapter 1: Taking Risks and Making Profits, Chapter 4: Ethics and Social Responsibility, Chapter 20: Money and Financial Institutions, Bonus Chapter A: Business Law

Companies Confuse Job Seekers with Fake Listings

March 23, 2023

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Although the collapse of SVB and the resulting economic fallout has rattled global markets, many companies are hoping to restore faith among investors by showing signs of growth. The clearest sign of a growing business is one that is hiring people, after all, leading some firms to place job listings with no intention of actually bringing anyone on board. In fact, a recent survey of 1,000 hiring managers found that 27 percent of respondents reported leaving job listings up for Continue reading →

Human Resources, Banking, Hiring, Turnover, Economics, SVB, Ethics

Chapter 1: Taking Risks and Making Profits, Chapter 2: Economics, Chapter 4: Ethics and Social Responsibility, Chapter 11: Human Resource Management, Bonus Chapter A: Business Law

[VIDEO] How SVB Collapsed in 36 Hours

March 16, 2023

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The video below provides an in-depth look at Silicon Valley Bank’s downfall, from its heavy investments in bonds to the bank run that has sent shockwaves through the market. (For more information on investigations into potential misconduct at SVB, check out this video.)

Questions:

How did SVB’s substantial investments in bonds backfire on the bank?
Do you think federal regulators should place limits on how much money banks like SVB can invest? Why or why not?

Banking, Regulation, Federal Reserve, Ethics, Supply & Demand, Stock markets, FDIC, Financial collapse

Chapter 1: Taking Risks and Making Profits, Chapter 2: Economics, Chapter 4: Ethics and Social Responsibility, Chapter 18: Financial Management, Chapter 19: Securities Markets, Chapter 20: Money and Financial Institutions, Videos

FDIC Intervenes after Silicon Valley Bank Failure

March 14, 2023

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Last Friday, a combination of imprudent decision-making and panicked customers led to the collapse of Silicon Valley Bank (SVB), a 40-year-old financial institution based in Santa Clara, California. The Federal Deposit Insurance Corporation (FDIC) stepped in to prevent further fallout, putting nearly $175 billion in customer deposits under the regulator’s control. SVB’s meltdown represents the second largest bank failure in U.S. history, and the largest one since the 2008 financial crisis. As a result of this chaotic situation, stock prices Continue reading →

Federal Reserve, Supply & Demand, Ethics, Stock markets, FDIC, Financial collapse, Banking, Regulation

Chapter 1: Taking Risks and Making Profits, Chapter 2: Economics, Chapter 4: Ethics and Social Responsibility, Chapter 18: Financial Management, Chapter 19: Securities Markets, Chapter 20: Money and Financial Institutions

Investors Lose Billions in Massive Crypto Exchange Collapse

November 16, 2022

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Few financial sectors are as volatile as cryptocurrency, with the price of bitcoin down by more than 60 percent since the start of the year. The coin’s recent drop can be directly attributed to the downfall of FTX, a crypto exchange once valued at more than $32 billion. Founded by Samuel Bankman-Fried, FTX attracted the interest of top venture capital firms who invested hundreds of millions in the seemingly promising project. The company purchased mainstream legitimacy with their immense capital, Continue reading →

Cryptocurrency, Marketing, Ethics, Promotions, Entrepreneurship, Currency, Banking, Regulation, Bitcoin

Chapter 1: Taking Risks and Making Profits, Chapter 2: Economics, Chapter 4: Ethics and Social Responsibility, Chapter 6: Entrepreneurship, Chapter 13: Marketing, Chapter 16: Place and Promotion, Chapter 20: Money and Financial Institutions, Bonus Chapter A: Business Law, Bonus Chapter B: Technology and New Media

Banks Plan to Reduce or Eliminate Overdraft Fees

February 25, 2022

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In theory, overdraft fees charged by banks are meant to be a “convenience” for customers so that their purchases are not declined when they are unknowingly low on funds. In practice, however, these fees have become a major revenue generator for banks that charge an average of $33.58 for each overdraft. That means consumers can be hit with multiple fees if they accidentally make numerous purchases while past the limits of their account. Studies show that this practice particularly harms Continue reading →

Finance, Regulation, Legal, CFPB, Ethics, Overdraft fees, Banking

Chapter 1: Taking Risks and Making Profits, Chapter 4: Ethics and Social Responsibility, Chapter 20: Money and Financial Institutions, Bonus Chapter A: Business Law, Bonus Chapter D: Personal Finance

Congress Eliminates Law that Lets Consumers Sue Banks

October 31, 2017

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In the past year we’ve featured a few stories about the Consumer Financial Protection Bureau and how it aims to keep consumers safe from predatory business practices. From collecting consumer complaints to limiting the power of payday lenders, the CFPB was formed to put regular people on somewhat equal footing with big companies. Still, not everyone sees the relatively new government agency this way. Opponents claim the CFPB has too much power to regulate businesses, thus harming both companies Continue reading →

Regulation, Legal, CFPB, Ethics, Banking, Finance

Chapter 1: Taking Risks and Making Profits, Chapter 4: Ethics and Social Responsibility, Chapter 20: Money and Financial Institutions, Bonus Chapter A: Business Law

Wells Fargo Faces More Claims of Employee Fraud

September 7, 2017

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Last year we took a close look at how Wells Fargo fostered a culture of fraud that encouraged employees to open unauthorized credit and debit card accounts for customers. Investigators at the time estimated the bank had created more than 1.5 million fraudulent accounts, leading Wells Fargo to fire thousands of employees. Further inquiries from Congress also caused the company to replace managers and roll back executive pay as part of an overhaul of its retail division. The scandal Continue reading →

Regulation, Fraud, Wells Fargo, Ethics, Consumer Financial Protection Bureau, Banking

Chapter 1: Taking Risks and Making Profits, Chapter 4: Ethics and Social Responsibility, Chapter 10: Motivation, Chapter 11: Human Resource Management, Chapter 18: Financial Management, Bonus Chapter A: Business Law

[VIDEO] Stress Test: What Is Bank Capital?

August 4, 2017

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Since the passage of the Dodd-Frank financial reform act, banks have been required to keep a certain amount of cash on hand relative to their assets. Legislators put the rule in place so that institutions would have enough money in their vaults to bail themselves out in the event of another credit crisis. This video explains the concept of bank capital and why these regulations have caused some frustration in the finance industry.

Questions:

Why are banks required to keep Continue reading →

Economics, Dodd-Frank, Capital, Banking, Finance, Regulation

Chapter 1: Taking Risks and Making Profits, Chapter 2: Economics, Chapter 4: Ethics and Social Responsibility, Chapter 19: Securities Markets, Chapter 20: Money and Financial Institutions, Bonus Chapter A: Business Law, Videos

[VIDEO] How the Federal Reserve Works

June 23, 2017

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When the economy was on the verge of collapse due to the 2008 financial crisis, the Federal Reserve dropped interest rates to zero in an effort to get money moving around again. The economy is not in such dire straits now, of course, so the Fed has once again returned to raising rates gradually. This video quickly reviews how the Fed works and demonstrates the ways that the central bank affects the nation’s money supply.

Questions:

What are the Continue reading →

Economics, Banking, Federal Reserve, Interest Rates, Money Supply, 2008 Financial Crisis

Chapter 2: Economics, Chapter 19: Securities Markets, Chapter 20: Money and Financial Institutions, Videos