The Great Bank Robbery Of 2023

On today’s Lever Time, David Sirota sits down with law professor and policy advocate Robert Hockett and former FDIC attorney Todd Phillips, to explain “The Great Bank Robbery of 2023” — a financial grift that very well could be impacting you. The three explore how this complicated bank swindle has become so prevalent, what federal regulators could do to stop it, and how consumers like you can protect yourself from the scam. The grift goes like this: When you deposit your money at a bank, they should pay you interest for your money. That’s because they make money off of it: Banks lend out your deposits for mortgages and small business loans, or deposit money with the Federal Reserve — all of which generate a much higher interest rate return for the banks. The difference is profit. Until recently, banks would pass along increased interest on these efforts to its customers. But over the last two years, as the Federal Reserve has hiked interest rates to combat inflation, banks haven’t been sharing the wealth. Today, the gap between the profit banks generate by lending out those deposits and what they pay their customers is the largest it’s ever been: On average, banks are paying its depositors 0.4% interest, while reaping anywhere from 5 to 7 percent interest via lending. This has resulted in one of the largest upward wealth transfers in the modern economy, from customers to bank executives. A transcript of this episode is available here. Links: The Great Bank Robbery of 2023 (The Lever, 2023) BofA profit surges on interest income, surprise investment banking gain (Reuters, 2023) TreasuryDirect.gov BONUS: Monday's bonus episode of Lever Time Premium, exclusively for The Lever’s supporting subscribers, featured our interview with climate scientist Dr. Andrew Pershing about “attribution science” — a new technique that can pinpoint how manmade climate change influences extreme weather events. If you'd like access to Lever Time Premium, which includes extended interviews and bonus content, head over to LeverNews.com to become a supporting subscriber. If you’d like to leave a tip for The Lever, click the following link. It helps us do this kind of independent journalism. levernews.com/tipjar Learn more about your ad choices. Visit megaphone.fm/adchoices