CFPB Probes BoA
Bank of America (BAC) is set to report earnings tomorrow. The megabank will likely speak on a recent probe from the Consumer Financial Protection Bureau, or CFPB, which will result in $250 million in fines.
The CFPB accused America’s second-largest bank of withholding bonuses, opening accounts without customers’ permission, and double charging customers for non-sufficient funds, or NSF. As a result, the bank will need to pay $100 million to customers, as well as an additional $150 million in penalties.
America’s banks raked in $5.6 billion in overdraft and NSF fees during the first three quarters of 2022. Additionally, Bank of America voluntarily eliminated “all non-sufficient fund fees” in the first half of 2022, resulting in revenue from NSF fees dropping by more than 90%.
On the company’s upcoming earning call Tuesday, investors will want to hear how increased federal scrutiny over “junk fees” will impact the bank’s future. Bank of America’s call will kick off a week full of blockbuster earnings from some of the country’s biggest financial institutions. Here’s what else to watch for in the week ahead on Wall Street.
Economic Data
Tomorrow will see the release of June reports for both retail sales and industrial production. In May, retail sales rose 0.3% from April while industrial production decreased 0.2%. Additionally, the housing market index will be released. In June, this metric signaled positive builder confidence for the first time in nearly a year thanks to solid demand, lack of existing inventory, and improved supply chain efficiency.
On Wednesday, an update on building permits for June will be released. In May, building permits increased 5.6% to just under 1.5 million. Investors will also get an update to the 30-year fixed-rate mortgage, which currently sits just above 7%.
On Thursday, investors will learn how many Americans filed for unemployment last week. For the week that ended July 8, roughly 237,000 Americans filed their initial jobless claims, a decrease of 12,000 from the week prior. Additionally, data for existing home sales in the US will be released. In May, the number of existing home sales increased just slightly by 2.3%.
Earnings
The earnings week will kick off strong tomorrow, following Bank of America’s call with a flurry of financial reports from Bank of NY Mellon (BK), Charles Schwab (SCHW), and Morgan Stanley (MS). Charles Schwab will likely address a recent data breach impacting thousands of clients. Beyond the finance space, Lockheed Martin (LMT) will update investors as well.
On Wednesday, Ally Financial (ALLY) and Goldman Sachs (GS) will keep financial earnings reports flowing. Also, Netflix (NFLX) will discuss its second-quarter results. Investors eagerly await news of the streaming giant’s fledgling plans to get into the video game business.
On Thursday, Capital One (COF) will keep finance week rolling, while both American Airlines (AAL) and United Airlines (UAL) will fill investors in on the state of the skies. American Airlines could expound on the end of its deal with JetBlue (JBLU). The ticket partnership between the two airlines is set to end July 21 after a judge ruled it anti-competitive in light of the pending merger between JetBlue and Spirit Airlines (SAVE).
On Friday, American Express (AXP) will cap off a week of financial earnings. Amex’s report could clear up rumors on whether or not it plans on taking over Apple’s (AAPL) credit card and savings products from Goldman Sachs.
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