Raphael Stevens

More stories

  • 100 Shares109 Views

    in Finance

    How the Federal Reserve’s rate policy affects mortgages

    The Federal Reserve lowered its interest rate target three times in 2024.
    This has many Americans waiting for mortgage rates to fall. But that may not happen for some time.

    “I think the best case scenario is we’re going to continue to see mortgage rates hover around six and a half to 7%,” said Jordan Jackson, a global market strategist at J.P. Morgan Asset Management. “So unfortunately for those homeowners who are looking for a bit of a reprieve on the mortgage rate side, that may not come to fruition,” Jordan said in an interview with CNBC.
    Mortgage rates can be influenced by Fed policy. But the rates are more closely tied to long-term borrowing rates for government debt. The 10-year Treasury note yield has been increasing in recent months as investors consider more expansionary fiscal policies that may come from Washington in 2025. This, combined with signals sent from the market for mortgage-backed securities, determine the rates issued within new mortgages.
    Economists at Fannie Mae say the Fed’s management of its mortgage-backed securities portfolio may contribute to today’s mortgage rates.
    In the pandemic, the Fed bought huge amounts of assets, including mortgage-backed securities, to adjust demand and supply dynamics within the bond market. Economists also refer to the technique as “quantitative easing.”Quantitative easing can reduce the spread between mortgage rates and Treasury yields, which leads to cheaper loan terms for home buyers. It can also provide opportunities for owners looking to refinance their mortgages. The Fed’s use of this technique in the pandemic brought mortgages rates to record lows in 2021.”They were extra aggressive in 2021 with buying mortgage-backed securities. So, the [quantitative easing] was probably ill-advised at the time.” said Matthew Graham, COO of Mortgage News Daily.
    In 2022, the Federal Reserve kicked off plans to reduce the balance of its holdings, primarily by allowing those assets to mature and “roll-off” of its balance sheet. This process is known as “quantitative tightening,” and it may add upward pressure on the spread between mortgage rates and Treasury yields.

    “I think that’s one of the reasons the mortgage rates are still going in the wrong direction from the Federal Reserve’s standpoint,” said George Calhoun, director of the Hanlon Financial Systems Center at Stevens Institute of Technology.
    Watch the video above to learn how the Fed’s decisions affect mortgage rates. More

  • 188 Shares179 Views

    in Business

    FDA approves Eli Lilly’s weight loss drug Zepbound for sleep apnea, expanding use in U.S.

    The Food and Drug Administration approved Eli Lilly’s blockbuster weight loss drug Zepbound for treating patients with the most common sleep-related breathing disorder.
    The weekly injection is now the first drug treatment option cleared for patients with obesity and moderate-to-severe obstructive sleep apnea, which refers to breathing interrupted during sleep due to narrowed or blocked airways.
    The agency’s decision expands the use of Zepbound and could pave the way for Eli Lilly to gain broader insurance coverage for the treatment.

    An Eli Lilly & Co. Zepbound injection pen arranged in the Brooklyn borough of New York, US, on Thursday, March 28, 2024. 
    Shelby Knowles | Bloomberg | Getty Images

    The Food and Drug Administration on Friday approved Eli Lilly’s blockbuster weight loss drug Zepbound for treating patients with the most common sleep-related breathing disorder, expanding its use and possibly its insurance coverage in the U.S.
    The weekly injection is now the first drug treatment option cleared for patients with obesity and moderate-to-severe obstructive sleep apnea, or OSA, which refers to breathing interrupted during sleep due to narrowed or blocked airways. Zepbound should be used in combination with a reduced-calorie diet and increased physical activity, the FDA noted in a release.

    An estimated 80 million patients in the U.S. experience the disease, according to Eli Lilly. Roughly 20 million of those people have moderate-to-severe forms of the disease, but 85% of cases go undiagnosed, the company told CNBC earlier this year.
    “Too often, OSA is brushed off as ‘just snoring’ — but it’s far more than that,” said Julie Flygare, president and CEO of Project Sleep, a nonprofit advocating for sleep health and sleep disorders, in a release from Eli Lilly. “It’s important to understand OSA symptoms and know that treatments are available, including new options like Zepbound. We hope this will spark more meaningful conversations between patients and health care providers and ultimately lead to better health outcomes.” 
    Eli Lilly expects to launch the drug for OSA at the beginning of next year. It is the first approval beyond obesity treatment for Zepbound, which entered the market late last year and is also being tested for several other obesity-related conditions, such as fatty liver disease. Tirzepatide, the active ingredient in Zepbound, has been sold on the U.S. market for longer as the diabetes drug Mounjaro.
    The agency’s decision could pave the way for Eli Lilly to gain broader insurance coverage for Zepbound, which, like other weight loss drugs, is not covered by many insurance plans. That includes the federal Medicare program, which only covers obesity drugs if they are approved and prescribed for an added health benefit.
    The approval also backs up mounting evidence that there could be further health benefits tied to GLP-1s, a class of weight loss and diabetes treatments that have soared in popularity and slipped into shortages over the past year. Notably, Zepbound’s main rival, the weight loss drug Wegovy from Novo Nordisk, is not approved for OSA.

    Zepbound could be a valuable new treatment option for patients with OSA, which can lead to loud snoring and excessive daytime sleepiness, and can contribute to serious complications including stroke and heart failure. Patients with the condition have limited treatment options outside of wearing masks hooked up to cumbersome machines that provide positive airway pressure, or PAP, to allow for normal breathing.
    Eli Lilly in April released initial results from the two clinical trials, which showed that Zepbound was more effective than a placebo at reducing the severity of OSA in patients with obesity after a year.
    In June, Eli Lilly released additional data from the studies showing that Zepbound helpedresolve OSA in almost half of patients. The first study examined the weekly injection in adults with moderate-to-severe OSA and obesity who were not on PAP therapy. The second tested Zepbound in adults with the same conditions, but those participants were on and planned on continuing PAP therapy.
    The data showed that 43% of people in the first study and 51.5% of patients in the second trial who took the highest dose of Zepbound achieved “disease resolution,” according to the company. That compares with 14.9% and 13.6% of patients who took a placebo in the two trials, respectively.
    Researchers came to those conclusions by examining an apnea-hypopnea index, or AHI, which records the number of times per hour a person’s breathing shows a restricted or completely blocked airway. The index is used to evaluate the severity of obstructive sleep apnea and the effectiveness of treatments for the condition.
    Disease resolution for OSA is defined as a patient having fewer than five AHI events per hour, the company said. It is also defined as a person having five to 14 AHI events per hour and scoring a certain number on a standard survey designed to measure excessive daytime sleepiness, according to Eli Lilly. More

  • 113 Shares129 Views

    in Business

    What a government shutdown could mean for air travel

    Lawmakers in the House voted down a short-term spending bill on Thursday, raising the chances for a government shutdown.
    If no deal is reached, the shutdown could begin 12:01 a.m. ET on Saturday.
    Air traffic controllers and TSA agents are considered essential employees, though they could end up working without a paycheck.

    A lone traveler makes his way past a nearly deserted TSA security screening area at Orlando International Airport ahead of the arrival of Hurricane Milton, on October 9, 2024 in Orlando, Florida. 
    Paul Hennessy | Anadolu | Getty Images

    A government shutdown is looming just as the peak holiday travel season gets underway.
    Lawmakers have been at an impasse and on Thursday voted down a short-term bill, which was backed by President-elect Donald Trump, to continue to fund the U.S. government. A shutdown could begin as early as 12:01 a.m. ET on Saturday if no deal is reached.

    Hundreds of thousands of government employees would be furloughed if Congress fails to pass a spending bill.
    A government shutdown could cost the U.S. travel industry $1 billion per week, estimated the U.S. Travel Association, which represents major hotel groups and others.
    “It’s hard to see how anyone in Congress wins if they force TSA workers, air traffic controllers, and other essential employees to work without pay during one of the busiest travel periods of the year,” Geoff Freeman, the group’s president, said in a statement on Friday.

    What does this mean for air travel?

    Commercial airplanes are still scheduled to fly, even given the chance of a shutdown.
    Airlines are forecasting the busiest year-end holiday season on record. The Transportation Security Administration expects its officers to screen more than 40 million people during the holidays through Jan. 2. United Airlines alone said it will fly 9.9 million people between Dec. 19 and Jan. 6, up 12% over last year.

    The government deems the more than 14,000 air traffic controllers and close to 60,000 TSA agents essential, which means they would continue working, though they wouldn’t be paid during the shutdown.

    Read more CNBC airline news

    Prepare for longer lines?

    TSA officers “would continue working without pay in the event of a shutdown,” the agency’s administrator, David Pekoske, said Thursday on social media platform X.
    “While our personnel have prepared to handle high volumes of travelers and ensure the security of our transportation systems, an extended shutdown could mean longer wait times at airports,” the TSA said in a statement Friday.

    What happened last time?

    The last time the government shut down, it stretched for more than a month from late 2018 through early 2019.
    Callouts from a few air traffic controllers in the highly congested airspace along the U.S. East Coast snarled air traffic during that shutdown. Then-President Trump and lawmakers reached a deal shortly after that to end the shutdown, the longest funding lapse in U.S. history.
    Congestion has vexed airline leaders. Meanwhile, the Federal Aviation Administration is once again without a permanent administrator after FAA chief Mike Whitaker, who was appointed by President Joe Biden last year, said he will step down Jan. 20, when Trump takes office.
    Modernization of air traffic control and hiring more controllers should be the next FAA administrator’s priority, Delta Air Lines CEO Ed Bastian told CNBC earlier this week.

    Don’t miss these insights from CNBC PRO More

  • 125 Shares129 Views

    in Business

    Party City to close all of its stores, report says

    Party City on Friday announced it will close all of its stores and has initiated corporate layoffs effective immediately, according to a CNN report.
    CNN reported the company’s closure was due to ongoing financial challenges at the party supply retailer, which less than two years ago filed for bankruptcy protection over its inability to pay off $1.7 billion in debt.
    The New Jersey-based chain exited bankruptcy in September 2023 through a plan that included transitioning into a privately held company and canceling nearly $1 billion in debt.

    A sign in a Party City store in Miami, Florida, on Jan. 18, 2023.
    Joe Raedle | Getty Images

    Party City on Friday announced it will close all of its stores and has initiated corporate layoffs effective immediately, according to a CNN report.
    CEO Barry Litwin told corporate employees in a meeting viewed by CNN that Party City has to “commence a winddown process immediately,” and that Friday would be their last day of work for the company.

    “That is without question the most difficult message that I’ve ever had to deliver,” Litwin said at the meeting, according to the report.
    CNN reported the company’s closure was due to ongoing financial challenges at the party supply retailer, which less than two years ago filed for bankruptcy protection over its inability to pay off $1.7 billion in debt.
    The New Jersey-based chain exited bankruptcy in September 2023 through a plan that included transitioning into a privately held company and canceling nearly $1 billion in debt. A majority of its 800 U.S. stores were able to stay open as it emerged from bankruptcy.
    Litwin was named CEO in August and said at the time he saw “many opportunities to strengthen our financial performance and build a leading end-to-end celebration experience for consumers,” according to a press release. 
    Prior to his appointment, he was the CEO of Global Industrial Company, a distribution leader in industrial products.

    Competition in the party goods and costume space has grown in recent years, including Spirit Halloween’s continued rise within and outside of the spooky season. The holiday costume chain announced in October that it would open 10 new “Spirit Christmas” stores, with some of the stores being converted from existing Spirit Halloween locations.
    Online retailers have also added pressure to Party City’s operation, even as the company began to offer items on Amazon in 2018.
    Representatives for Party City did not immediately respond to CNBC’s request for comment on CNN’s report or potential story closures. Read the full CNN report here.

    Don’t miss these insights from CNBC PRO More

  • 175 Shares159 Views

    in Finance

    CFPB sues JPMorgan Chase, Bank of America and Wells Fargo over Zelle payment fraud

    The Consumer Financial Protection Bureau on Friday sued the operator of the Zelle payments network and the three U.S. banks that dominant transactions on it.
    The agency alleges that the firms failed to properly investigate fraud complaints or give victims reimbursements.
    Zelle said in a statement Friday that it was prepared to defend itself against this “meritless lawsuit.”

    Rohit Chopra, director of the CFPB, testifies during the Senate Banking, Housing and Urban Affairs Committee hearing titled “The Consumer Financial Protection Bureau’s Semi-Annual Report to Congress,” in the Dirksen Building on Nov. 30, 2023.
    Tom Williams | Cq-roll Call, Inc. | Getty Images

    The Consumer Financial Protection Bureau on Friday sued the operator of the Zelle payments network and the three U.S. banks that dominate transactions on it, alleging that the firms failed to properly investigate fraud complaints or give victims reimbursement.
    The CFPB said customers of the three banks — JPMorgan Chase, Bank of America and Wells Fargo — have lost more than $870 million since the launch of Zelle in 2017.

    Zelle, a peer-to-peer payments network run by bank-owned fintech firm Early Warning Services, allows for instant payments to other consumers and businesses and has quickly surged to become the biggest such service in the country. At the same time, Democrat lawmakers have stepped up criticism of banks in recent years over the financial crimes happening on Zelle.
    “The nation’s largest banks felt threatened by competing payment apps, so they rushed to put out Zelle,” CFPB Director Rohit Chopra said in a statement. “By their failing to put in place proper safeguards, Zelle became a gold mine for fraudsters, while often leaving victims to fend for themselves.”
    The suit is the latest move by the CFPB in the waning days of the Biden administration. Many of the actions it has taken, including steps to limit credit card late fees and overdraft charges, have been met with stiff opposition from banks and their trade groups. Corporations have had success pushing back against regulators by choosing legal venues known as friendly to suits challenging federal oversight.
    In fact, JPMorgan said in August that it was considering litigation against the CFPB if the regulator sought to punish the bank for its role in the Zelle network.
    The CFPB wants to force banks to stop their allegedly unlawful practices around Zelle and to pay an unspecified amount in penalties, it said.

    ‘Glaring flaws’

    The vast majority of Zelle activity is uneventful. Of the $806 billion that flowed across the network last year, only $166 million in transactions was disputed as fraud by customers of JPMorgan, Bank of America and Wells Fargo, the three biggest players on the platform.
    But the three banks collectively reimbursed just 38% of those claims, according to a July Senate report that looked at disputed unauthorized transactions.
    Banks say they investigate each fraud claim, but they often find that what customers say was fraud was technically a scam where customers authorized payments. In those cases, banks aren’t usually required to make customers whole.
    The CFPB claimed that Zelle’s “limited identity verification methods” have allowed criminals to infiltrate the network, enabling them to divert payments and move between member banks that didn’t share information among institutions.

    The Zelle online banking logo is displayed on a smartphone with the Zelle web page visible in the background in this photo in Brussels, Belgium, on Dec. 10, 2023.
    Jonathan Raa | Nurphoto | Getty Images

    The agency also said banks failed to properly investigate complaints about Zelle activity and didn’t consistently report fraud activity.
    “The banks failed to fix glaring flaws in their systems even as hundreds of thousands of customers filed complaints about fraud,” Chopra told reporters during a call on Friday. “The banks knew their customers were having their money stolen, but since they weren’t bearing the cost of these losses themselves, they dragged their feet on fixing the problems.”
    Zelle is the preferred way for cyber criminals to extract funds because it is faster than other remittance options, according to Tom Peacock, director of global fraud intelligence for cybersecurity firm BioCatch.

    ‘Meritless’ and misleading

     Early Warning Services said in a statement Friday that it was prepared to defend itself against this “meritless lawsuit.”
    “Zelle leads the fight against scams and fraud and has industry-leading reimbursement policies that go above and beyond the law,” said Jane Khodos, an Early Warning Services spokeswoman. “The CFPB’s misguided attacks will embolden criminals, cost consumers more in fees, stifle small businesses and make it harder for thousands of community banks and credit unions to compete.”
    Furthermore, the $870 million figure cited by the CFPB for fraud losses is misleading because it includes incidents where the bank found that cases didn’t involve fraud, but errors or false claims, according to Early Warning Services.
    Early Warning Services has said that while transaction volumes rose in 2023, reports of scams and fraud fell almost 50%, and that only a tiny fraction of payment volumes are disputed as fraud.

    Don’t miss these insights from CNBC PRO More

  • 125 Shares119 Views

    in Business

    Starbucks baristas strike in three U.S. cities during pre-Christmas rush

    Starbucks baristas are striking in Los Angeles, Chicago and Seattle.
    Starbucks Workers United is pushing for better pay for baristas as it negotiates with the company.
    The coffee giant said in a statement that the union prematurely ended its bargaining session this week.

    Starbucks Workers United members picket outside a Starbucks store in Chicago, Illinois, US, on Friday, Dec. 20, 2024. 
    Vincent Alban | Bloomberg | Getty Images

    Starbucks baristas in some locations are planning to strike through Christmas Eve, starting with cafes in Los Angeles, Chicago and Seattle on Friday.
    The strikes will escalate each day, covering new markets, as Starbucks Workers United pushes for better pay for baristas. Starbucks is “backtracking on our promised path forward,” the union said in a post on X announcing the strikes.

    The stoppage could mean longer waits for holiday drinks and popular Starbucks merchandise in the days leading up to Christmas, when many Americans will be off work and school or buying last-minute gifts.
    Relations between the company and the union have turned frosty again, after a thaw earlier this year. In late February, both sides agreed to work together on a “foundational framework” that would include a process to achieve collective bargaining agreements for individual stores. Since then, they’ve conducted more than nine bargaining sessions over 20 days, according to Starbucks.
    Earlier this week, Starbucks and the union met for the last scheduled bargaining session of the year. But ahead of the meeting, Starbucks Workers United baristas voted to authorize a strike if the coffee giant didn’t propose a comprehensive package that would address pay and other benefits.
    In the bargaining session, Starbucks proposed no immediate pay increase and only guaranteed annual pay hikes of 1.5% going forward, the union said.
    Starbucks said in a statement that Workers United prematurely ended the bargaining session this week.

    “We are ready to continue negotiations to reach agreements. We need the union to return to the table,” the company said. 
    The union asked for a 64% increase to hourly employees’ wages immediately and a 77% pay hike over the life of a three-year contract, according to Starbucks.
    “This is not sustainable,” the company said in a statement.

    Starbucks Workers United members picket outside a Starbucks store in Chicago, Illinois, US, on Friday, Dec. 20, 2024. 
    Vincent Alban | Bloomberg | Getty Images

    It’s been a tough year for Starbucks. Globally and in the U.S., its sales have declined as consumers look elsewhere for their caffeine buzz. In the wake of the sales slump, baristas will reportedly receive a smaller annual pay hike next year than they have in previous years.
    Starbucks Workers United represents more than 500 company-owned locations of Starbucks.
    Starbucks baristas aren’t the only workers striking during the last-minute holiday rush. Amazon workers across seven facilities went on strike on Thursday to put pressure on the e-commerce giant to come to the bargaining table.

    Don’t miss these insights from CNBC PRO More

  • 163 Shares169 Views

    in Business

    Netflix secures U.S. rights to the FIFA Women’s World Cup in 2027, 2031

    Netflix on Friday announced it has secured exclusive broadcast rights in the U.S. to the FIFA Women’s World Cup in 2027 and 2031.
    The streaming giant said coverage will include commentary and entertainment from studio shows and top-tier talent, as well as Netflix original documentaries in the lead-up to the tournament.
    The 2027 tournament is set to take place in 12 cities across Brazil.
    The host country for the 2031 tournament is yet to be announced.

    Esther Gonzalez of Spain kisses the FIFA Women’s World Cup Trophy after the team’s victory in the FIFA Women’s World Cup Australia & New Zealand 2023 Final match between Spain and England at Stadium Australia on August 20, 2023.
    Alex Pantling – Fifa | Fifa | Getty Images

    Netflix on Friday announced it has secured exclusive rights in the U.S. to the FIFA Women’s World Cup in 2027 and 2031.
    The announcement comes just days before Netflix will stream its first ever National Football League Christmas Day games. Adding the Women’s World Cup to its portfolio shows the streaming giant is continuing to bulk up its sports rights portfolio. It also comes as the popularity of women’s sports has risen over the past year.

    “I’ve seen the fandom for the FIFA Women’s World Cup grow tremendously — from the electric atmosphere in France in 2019, and most recently, the incredible energy across Australia and New Zealand in 2023,” Netflix Chief Content Officer Bela Bajaria said in a press release. “Bringing this iconic tournament to Netflix is not just about streaming matches — it’s about celebrating the players, the culture, and the passion driving the global rise of women’s sports.”
    The 2027 tournament is set to take place in 12 cities across Brazil. The host country for the 2031 tournament is yet to be announced.
    Netflix said coverage of the Women’s World Cup will include commentary and entertainment from studio shows and top-tier talent, as well as Netflix original documentaries around major players and the sport’s rapidly growing fan base in the lead-up to the tournament.
    The Women’s World Cup has continued to grow in popularity, and more people in the U.S. tuned in for the women’s final in 2019 than the men’s in 2018. U.S. viewership dropped substantially in 2023, however, after the two-time defending champions were knocked out in the Round of 16.
    As the audience for the WNBA and women’s national soccer team has grown significantly in the U.S., soccer remains one of the most popular sports globally.

    Netflix has 282.7 million global memberships, and the streamer has been pushing for growth internationally in part through its cheaper, ad-supported tier.
    Sports media rights have also exploded in valuation for media companies as live sports beckon the biggest audiences.
    Netflix has continued to grow into the sports category, streaming a Mike Tyson-Jake Paul fight last month, which was watched by 108 million people, making it the most-streamed sporting event ever, according to Netflix.
    On Christmas Day, the streamer is set to cover the NFL double-header featuring the Kansas City Chiefs versus the Pittsburgh Steelers and the Baltimore Ravens versus the Houston Texans. More

  • 213 Shares139 Views

    in Finance

    Banking app Dave, back from the brink, is this year’s biggest gainer among financials with 934% surge

    Fintech firm Dave came back from the brink of collapse, turned profitable and has consistently topped Wall Street analyst expectations.
    It’s the top gainer for 2024 among U.S. financial stocks, with a 934% year-to-date surge through Thursday.
    Fintech firms like Dave and Robinhood are the most promising heading into next year, according to JMP Securities analyst Devin Ryan.

    Jason Wilk
    Source: Jason Wilk

    Jason Wilk, the CEO of digital banking service Dave, remembers the absolute low point in his brief career as head of a publicly-traded firm.
    It was June 2023, and shares of his company had recently dipped below $5 apiece. Desperate to keep Dave afloat, Wilk found himself at a Los Angeles conference for micro-cap stocks, where he pitched investors on tiny $5,000 stakes in his firm.

    “I’m not going to lie, this was probably the hardest time of my life,” Wilk told CNBC. “To go from being a $5 billion company to $50 million in 12 months, it was so freaking hard.”
    But in the months that followed, Dave turned profitable and consistently topped Wall Street analyst expectations for revenue and profit. Now, Wilk’s company is the top gainer for 2024 among U.S. financial stocks, with a 934% year-to-date surge through Thursday.
    The fintech firm, which makes money by extending small loans to cash-strapped Americans, is emblematic of a larger shift that’s still in its early stages, according to JMP Securities analyst Devin Ryan.
    Investors had dumped high-flying fintech companies in 2022 as a wave of unprofitable firms like Dave went public via special purpose acquisition companies. The environment turned suddenly, from rewarding growth at any cost to deep skepticism of how money-losing firms would navigate rising interest rates as the Federal Reserve battled inflation.
    Now, with the Fed easing rates, investors have rushed back into financial firms of all sizes, including alternative asset managers like KKR and credit card companies like American Express, the top performers among financial stocks this year with market caps of at least $100 billion and $200 billion, respectively.

    Big investment banks including Goldman Sachs, the top gainer among the six largest U.S. banks, have also surged this year on hope for a rebound in Wall Street deals activity.

    Stock chart icon

    Dave, a fintech firm taking on big banks like JPMorgan Chase, is a standout stock this year.

    But it’s fintech firms like Dave and Robinhood, the commission-free trading app, that are the most promising heading into next year, Ryan said.
    Robinhood, whose shares have surged 190% this year, is the top gainer among financial firms with a market cap of at least $10 billion.
    “Both Dave and Robinhood went from losing money to being incredibly profitable firms,” Ryan said. “They’ve gotten their house in order by growing their revenues at an accelerating rate while managing expenses at the same time.”
    While Ryan views valuations for investment banks and alternative asset manages as approaching “stretched” levels, he said that “fintechs still have a long way to run; they are early in their journey.”
    Financials broadly had already begun benefitting from the Fed easing cycle when the election victory of Donald Trump last month intensified interest in the sector. Investors expect Trump will ease regulation and allow for more innovation with government appointments including ex-PayPal executive and Silicon Valley investor David Sacks as AI and crypto czar.
    Those expectations have boosted the shares of entrenched players like JPMorgan Chase and Citigroup, but have had a greater impact on potential disruptors like Dave that could see even more upside from a looser regulatory environment.

    Gas & groceries

    Dave has built a niche among Americans underserved by traditional banks by offering fee-free checking and savings accounts.
    It makes money mostly by extending small loans of around $180 each to help users “pay for gas and groceries” until their next paycheck, according to Wilk; Dave makes roughly $9 per loan on average.
    Customers come out ahead by avoiding more expensive forms of credit from other institutions, including $35 overdraft fees charged by banks, he said. Dave, which is not a bank, but partners with one, does not charge late fees or interest on cash advances.
    The company also offers a debit card, and interchange fees from transactions made by Dave customers will make up an increasing share of revenue, Wilk said.
    While the fintech firm faces far less skepticism now than it did in mid-2023— of the seven analysts who track it, all rate the stock a “buy,” according to Factset — Wilk said the company still has more to prove.
    “Our business is so much better now than we went public, but it’s still priced 60% below the IPO price,” he said. “Hopefully we can claw our way back.” More