They aren't creating new products, but some lenders are advising cash-strapped customers in high-tax states to tap home equity or other credit lines to prepay property taxes before the new tax law kicks in.
Any decline in home equity balances could be offset by higher demand for other types of consumer loans. The worry is that only borrowers with blemished credit will take out home equity loans, increasing banks’ risk.
The reduction is “primarily” from a lower value of net deferred tax assets, the bank said in a securities filing Friday, the same day President Trump signed the legislation.
Bank of America, PNC join a growing list of banks planning to use the anticipated savings from the reduction in the corporate tax rate to boost wages for employees.
The legislation — and public perceptions of it — are expected to play a major role in 2018 elections that will determine whether Republicans retain control of Congress.
Fifth Third said it will give a bonus or raise to about three-quarters of its employees while Wells Fargo raised its minimum hourly pay in the wake of Congress' passing a tax reform bill.
The tax reform legislation approved by Congress on Wednesday and expected to be signed by President Trump soon is mostly good news for banks, but many will have to take big charges in the fourth quarter as a result.
The Senate approved the final tax reform plan 51-48 early Wednesday, the second-to-last obstacle before sending it to President Trump for his signature.
