Wells Fargo Faces Overdraft Woes; JPMorgan Helps Vets: Finance Winners and Losers

NEW YORK (TheStreet) -- General Electric (GE) closed a deal, Wells Fargo Corporation (WFC) may get dinged for aggressive overdraft policies, JPMorgan Chase (JPM) found a way to help veterans and Wall Street overall remains eager for higher interest rates.

On Monday night Goldman Sachs (GS) outlined a cautious view of labor-market growth, which would hint that the Federal Reserve may be slower to raise rates than the banks would like. Meanwhile, Bank of America (BAC) issued its own report that said a September rate hike was likely, though subsequent hikes would be slower than they were in previous cycles. 

Bloomberg weighed in on the rate-raising fray by talking about how some banks are changing the way they classify mortgage-backed securities on their books in anticipation of a rate-hike. Under rules that went into effect in 2013, unrealized gains and losses on assets marked "available for sale" would now affect banks' capital levels. (Remember: when rates go up, bond prices go down.) 

Bloomberg reports that there has been an 8.4% increase in banks marking these assets as "hold to maturity" -- meaning they won't be recording swings in asset prices.

One plus one equals whatever you want it to, as one of my favorite accounting jokes goes.


General Electric said the sale of its private-equity lending unit to Canada Pension Plan Investment Board will close in the third quarter, pending regulatory approval.

"This represents an important milestone as we continue to execute on our strategy to sell most of the assets of GE Capital," Keith Sherin, the head of the unit, said in a statement. "It's a testament, he said, to the company's "ability to execute high-value transactions quickly."

Shares of General Electric closed up 9 cents to $27.33.


No matter how careful you are with your checking account, you may still have to pay an overdraft fee.  At Wells Fargo, some customers say that happens more often than it should. On Monday, the U.S. District Court for Southern Florida cleared two groups of them to press claims against the bank.

The plaintiffs say the bank altered its debit-card processing procedures in a way that created more overdraft fees. Instead of processing debits in chronological order, the bank processed the orders from highest to lowest.

What this means is, if you had $900 in your checking account and spent $4 at Starbucks (SBUX) in the morning and then paid your rent of $1,000 at night, Wells Fargo would debit the $1,000 first, followed by the Starbucks debit -- creating two overdrafts. If the orders were processed chronologically, there would be only one overdraft.

Shares of Wells Fargo closed up 57 cents to $56.69.


JPMorgan announced on Tuesday that it completed the first-ever debt offering co-managed exclusively by U.S. military veteran-broker dealers. The offering was appropriately priced around Memorial Day.

The bank was named by the National Veteran-owned Business Association "one of the best U.S. corporations committed to working with veteran-owned businesses." 

Shares of JPMorgan closed up 28 cents to $67.17.

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