NEW YORK (TheStreet) -- Bank stocks haven't fared as well as many investors had hoped, falling 2.5% in the first quarter of 2015. With a rate hike seeming more and more likely to come later in the year - at the earliest - downward pressure remains on the sector.
Banks should advance growth, savings and success within the economy, says former Oklahoma Governor Frank Keating, president of the American Bankers Association.
However, harsh weather and dock strikes in the West likely negatively impacted the banks in the quarter, resulting in lower lending.
Interest income on those loans is low, which gives the banks less incentive to increase their lending. Net interest margins are also low, which weighs on the banks' profitability, he said.
As banks continue to underperform, it could be a clue to a potential disappointment in economic data, Keating added.
Low interest rates also hurt savers. It used to be that investors could earn $8,000 per year on a $100,000 CD investment. Today, that return has plummeted to $355.
Back then, one could live off their investment's interest, when coupled with social security. Today, that's not possible, Keating said.
The current rates are being artificially pinned lower, which isn't "healthy for the long-term," he added.
The average age of someone buying their first house has skyrocketed, now at 37 years old, which "is bad for economic growth," he reasoned.
There's also been a large increase in food stamps, as labor participation rates are "terrible," he concluded. Young people lack the proper education for today's jobs and many that do have an education tend to have enormous financial burdens as a result.