Money Talk: Goldman Sachs jumps into booming online banking business

Editor’s note: Each Monday, Talk Business & Politics provides “Money Talk,” a wrap-up of banking and financial news. 

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GOLDMAN SACHS JUMPS INTO BOOMING ONLINE BANKING BUSINESS
Investment banking giant Goldman Sachs announced that its U.S. banking arm has acquired the online deposit platform of GE Capital Bank, assuming nearly $16 billion of new deposits. The closing of the transaction followed regulatory approvals from the U.S. Federal Reserve Board, the New York State Department of Financial Services and the Utah Department of Financial Institutions.

The online banking business, which is one of the fastest growing sectors of the financial industry, will be part of the GS Bank, the New York State-chartered bank that is a wholly-owned, direct subsidiary of The Goldman Sachs Group. The deal also allows industrial conglomerate GE to move closer to its goal of exiting the credit card and banking industry.

REPORT: PAYDAY LOAN BORROWERS PAYING STEEP PRICE IN OVERDRAFT FEES
Half of online payday loan borrowers rack up an average of $185 in bank penalties because at least one debit attempt overdrafts or fails, according to a new report by the Consumer Financial Protection Bureau (CFPB). And one third of those borrowers who get hit with a bank penalty wind up having their account closed involuntarily.

Payday loans are typically marketed as a way to bridge a cash flow shortage between paychecks or other income. Also known as “cash advances” or “check loans,” they are usually high-cost loans that can offer quick access to money. The CFPB study also found that despite this high cost to consumers, lenders’ repeated debit attempts typically fail to collect payments. To see the full report, click here.

PwC SURVEY: FINANCES CAUSE EMPLOYEES THE MOST STRESS
After several years of being upbeat about their financial well-being, U.S. workers are seeing a downward slide in the many of the key indicators of employee financial wellness, according to the 2016 survey by PriceWaterhouseCoopers.

For instance, financial stress is up in 2016 with 52% of employees stressed about their finances. With 45% of employees saying that financial matters cause them the most stress in their lives — nearly as many as those whose top stress is their job, health, or relationships combined — financial wellness is emerging as a key factor in an employee’s overall well-being.

The 2016 edition of PwC’s Employee Financial Wellness Survey tracks the financial well-being of full-time employed U.S. adults nationwide. This year, it incorporates the views of 1,600 full-time employed adults.