Are you on this list?

This week, Apple Pay went live.  You all should know about it by now, but Apple Pay permits consumers to pay for goods at participating retailers with the wave of an iPhone.  As readers of this blog will know, I am a big fan of Apple and its technology, but I am also concerned that if Apple Pay is successful it could exacerbate a financial system of haves and have nots.  Most notably, only a handful of the nations largest banks and its largest credit union were selected to unveil the technology.

So I was pleased this morning when I saw news that Visa is working with hundreds of financial institutions to enable them to accept the technology in the coming weeks.  I was especially pleased when I spotted a fair number of credit unions on the list.  I applaud them for this foresight and I certainly hope to see more and more credit unions joining in the coming months.  I understand that this is not a win-win situation.  Apple is taking a cut of transactions that members would probably have used debit cards for anyway.  But times change and pretty soon no one will be using plastic.  The technology makes it obsolete.

Could You Survive An Economic Doomsday?

The Fed released the scenarios it will use to stress test the ability of the nation’s largest banks to withstand economic Armageddon.  Specifically, bank holding companies with $50 billion or more in assets are required to test how they would withstand a multi-year contraction and state member banks with consolidated assets of $10 billion or more must also conduct stress test.

In this year’s “severely adverse scenario” (I love bureaucratese) U.S. corporations experience “increases in financial distresses that are even larger than would be expected in  a severe recession, together with a widening in corporate bond spreads and the decline in equity prices.”  But wait, there’s more.  The price of oil goes up to $110 per barrel and the unemployment rate increases by 4%.  Fortunately, these are not predictions, simply worst case scenarios intended to assess the resilience of our financial system.

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