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On The Money — Bank chiefs under fire for low savings interest rates

Lawmakers want to know why interest rates on savings accounts aren’t rising as fast as the Federal Reserve’s baseline interest rate range. We’ll also look at GOP resistance to a key priority for Sen. Joe Manchin (D-W.V.) and up to $45 billion in pandemic relief fraud.

But first, find out why falling home prices aren’t much help to young Americans.

Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Sylvan Lane, Aris Folley and Karl Evers-Hillstrom. Subscribe here.

Lawmakers slam big bank CEOs over savings rates

Congressional lawmakers slammed U.S. bankers this week for not raising interest rates on savings accounts held by everyday consumers despite a series of major increases in the federal funds rate by the Federal Reserve.

  • Interest rate increases by the Fed make it more expensive for banks and other financial institutions to borrow money from each other, and this theoretically extends the purchasing power of the dollar and brings down inflation.

  • But higher interest rates also make it more lucrative for banks to lend money, a revenue increase they could be passing onto consumers in the form of higher interest rates on basic savings and money market accounts.

“One of the only silver linings in a rising interest rate environment is that savers are supposed to be rewarded for their savings,” Del. Michael San Nicolas (D-Guam) said during a hearing of the House Financial Services Committee Wednesday.

The committee heard testimony from the heads of JP Morgan Chase, Wells Fargo and Bank of America, among other big U.S. banks.

The Hill’s Tobias Burns has more here.

LEADING THE DAY

Republicans lining up against Manchin’s permitting reform bill

Senate Republicans are lining up against the permitting reform bill that centrist Sen. Joe Manchin (D-W.Va.) unveiled Wednesday evening, shortly before it is to be added to a must-pass government funding bill scheduled for the floor next week.

As a result, key Republicans say a stopgap funding bill with Manchin’s language reforming the permitting process for energy projects will not have enough support to pass.

  • Manchin’s home-state colleague Sen. Shelley Moore Capito (R) announced Thursday morning that she supports his permitting reform bill, but most Republicans are coming out against the proposal.

  • GOP senators say Capito is embracing Manchin’s proposal because it would approve the completion of the Mountain Valley Pipeline, a natural gas pipeline that would span more than 300 miles across West Virginia. But Senate Republicans who don’t benefit from that project are much more skeptical.

  • Manchin’s bill also faces opposition from his own caucus. Sen. Bernie Sanders (I-Vt.) is urging his Democratic colleagues to vote against it, and Sen. Tim Kaine (D-Va.) announced Wednesday that he would not support the bill because of the language approving the completion of the Mountain Valley Pipeline, which would span 100 miles of his home state.

The Hill’s Alex Bolton has the rundown here.

NOT COOL

Labor Department watchdog identifies $45 billion of potential pandemic unemployment fraud

The Labor Department inspector general on Thursday identified $45.6 billion in potential unemployment insurance fraud during the pandemic, a figure that far exceeds past estimates.

A sweeping federal relief package signed by former President Trump in March 2020 expanded the ability for individuals to receive unemployment benefits, leading more than 57 million people to apply in a matter of months.

  • The watchdog said fraudsters allegedly filed claims using suspicious email accounts or Social Security numbers of the deceased and federal prisoners ineligible for the benefits.

  • Some also filed claims in multiple states, according to a press release from the inspector general.

“Hundreds of billions in pandemic funds attracted fraudsters seeking to exploit the UI program — resulting in historic levels of fraud and other improper payments,” Labor Department Inspector General Larry Turner said in a statement. “I am extremely proud of how our team has responded to this unprecedented crisis, despite significant resource constraints and data access issues.” 

The Hill’s Zach Schonfeld breaks it down here.

NO RECEIPT

Republicans block bill requiring dark money groups to reveal donors

Senate Republicans voted Thursday to block the consideration of a bill to promptly require organizations that spend money on elections to promptly disclose the identities of donors who give $10,000 or more during an election cycle.

The body failed to invoke cloture on the measure, in a 49-49 vote. Every Republican present voted against the measure, while every Democrat voted for it.

The legislation, sponsored by Sen. Sheldon Whitehouse (D-R.I.), has been a top Democratic priority since the Supreme Court ruling in Citizens United in 2010 that enabled corporations and other outside special interest groups to spend unlimited amounts of money on federal elections.

The Hill’s Alexander Bolton brings us up to speed here.

Good to Know

Speaker Nancy Pelosi (D-Calif.) on Thursday signaled again her support for an effort by Sen. Joe Manchin (D-W.Va.) to expedite energy infrastructure projects as part of a government spending package, even as dozens of House Democrats have opposed such a move.

The Speaker emphasized Thursday that House lawmakers are waiting to see the details of whatever package the Senate is able to pass, and she left open the possibility that the House could alter a Senate-passed bill.

Here’s what else we have our eye on:

  • Russian President Vladimir Putin’s recent threat to use nuclear weapons will not staunch U.S. aid to Ukraine, the Pentagon’s top spokesperson said Thursday.

  • Meta is considering its decision whether or not to reinstate former President Trump’s Facebook account with “great caution,” top executive Nick Clegg said Thursday.

  • The Federal Trade Commission (FTC) ordered Amazon founder Jeff Bezos and CEO Andy Jassy to testify in an investigation of the company’s Prime membership program.

  • Tesla is recalling more than 1 million vehicles over concerns with automatic systems for car windows that can pinch a driver or passenger and cause injury when closing.

That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow.

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