The big banks have reaped tens of billions of dollars thanks to the Trump tax cuts according to the fourth quarter report on bank performance by the Federal Deposit Insurance Corporation (FDIC). Banks garnered an astounding $28.8 billion in additional income, more than a third of their previous year’s income.
This comes as reports continue to show that American taxpayers are receiving smaller tax refunds than in the past.
The report led President and CEO of Better Markets to make the following comments to Politico:
A large chunk of their profits “were from the Trump tax cuts, which they didn’t pass along to tens of millions of hardworking Americans, who are still getting next to nothing on their savings accounts,” he added.
Additionally, the FDIC report showed that the other main source of bank income was as a result of the Fed’s recent interest rate increases. The combination of tax cuts and what’s called “Net Interest Margin” or the difference between the interest rate banks charge for loans (which is based on the Federal Reserve interest rate) and the interest rate the banks are paying out to customers with savings accounts, are how the big banks were able to pocket over $100 billion in profits for the first time ever.
On that part of the FDIC report and in the same Politico article, Dennis Kelleher said:
“The bigger banks only exist because they were bailed out, supposedly because they provide a social benefit, but here we are 10 years later, and we’re still waiting to see the benefit,” said Dennis Kelleher, president and CEO of Better Markets, which advocates for tougher financial regulation.