America’s big banks capped off a winning year, led by soaring Wall Street-facing business lines.

Why it matters: Banks cashed in on the white-hot IPO market, record debt issuance, and sky-high trading volume — all of which played out as economic peril softened the consumer side of their businesses.

The big picture: Financial results show that banks, which rake in money as middlemen, made a killing thanks to unprecedented action by the Federal Reserve — which caused a rush of activity in financial markets, pushed a slew of companies to issue debt, and led to a flood of others to go public for the first time

Banking Dive expects M&A to pivot toward niches, race to be a continuing focus of ESG, and crypto to have a make-or-break year in 2021.

In many ways, the trends Banking Dive is following in 2021 laid their roots in 2020. The trick is how to keep the momentum going.

Over 10 months, the value of crypto's flagship currency grew tenfold. Is that for real? How will that stick? 2021 may provide an answer. Banks' environmental, social and governance (ESG) efforts shifted from climate to racial equality. How will banks be held accountable for their follow-through? The new year may hold an answer. And COVID-19 — oh, COVID-19 — forced banks to back up their digital-first visions with real-world rollout. Where do they go from here? 

"While there has been a massive shift to digital payments this year, close to 50 million people in the U.S. remain underbanked," points out Sudhir Jha, Mastercard senior vice president and head of Brighterion. In "A Look Forward: What Executives Wish for America and the World in 2021," Jha dives into how Mastercard has responded to the challenges of 2020 with innovative programs that aim to bring unbanked people into the formal economy.

2020 has been a very interesting year. For the first time in my life, we’ve had so many changes and big events at the same time. But I remain optimistic. I’m hoping that commerce and financial institutions (FIs) continue to think of this as a chance to build communities and grow the economy in ways that are future-looking, such as finding businesses that can be funded to come back to life.

If you didn’t already know, scam lenders and loans are on the rise, fueled by the economic fall-out of the Covid-19 crisis. Bad lenders have been around for a long time, however, and though the tactics they employ may evolve over time, with a keen eye and some common sense, you should still be able to spot them pretty easily. The proliferation in recent years of online lenders has also created a renewed emphasis on researching lenders’ online presence and any complaints. Here are some key red flags and how to spot them.

Where to Start

If you’re being offered a loan by a company you haven’t already vetted thoroughly, the easiest place to start doing so is online. A simple search query should generate enough to get you started - take a look at their online footprint, any associated customer reviews, or signs of negative news stories. 

WASHINGTON (AP) — The Treasury Department announced Wednesday that Didem Nisanci will serve as Janet Yellen's chief of staff once Yellen is confirmed by the Senate.

Nisanci, who most recently served as global head of public policy at Bloomberg L.P., was previously the chief of staff for the Securities and Exchange Commission in the Obama-Biden administration.

Jason Leibenluft will serve as counselor to the Treasury secretary after having been a senior fellow at the Center for American Progress. He worked during the Obama-Biden administration in a variety of roles, including deputy director of the National Economic Council.

Cleveland-based KeyBank plans to launch a digital bank in March aimed at serving healthcare professionals, Chris Gorman, the bank's chairman and CEO, told analysts during a fourth-quarter earnings call Thursday.

Through Laurel Road, the digital student loan refinancing platform it acquired in 2019, KeyBank said the new digital bank will serve the healthcare segment and expand the consumer franchise nationally.

"This launch will broaden our offering for Laurel Road clients to include deposits, additional lending products and other value-added services," Gorman said Thursday. "We believe that both Laurel Road and consumer mortgage will continue to be relationship-based growth engines for our consumer business."

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (Bureau) today announced that it will partner with seven communities across the country to help build financial resiliency among Americans. The partnerships, part of the Bureau’s Start Small, Save Up initiative, aim to increase the number of people having sufficient liquid savings by testing new approaches as well as identifying existing approaches that can assist Americans to become more financially secure.

“The Bureau started Start Small, Save Up nearly two years ago to promote financial resiliency among Americans. If people don’t have enough to cover unexpected emergencies, it’s going to be harder for them to recover and achieve bigger financial goals,” said CFPB Director Kathleen L. Kraninger. “Today’s partnership will help us identify different approaches that can effectively promote financial resiliency in these communities.”

At the request of President Joe Biden, the Department of Education on Thursday extended the already nearly yearlong pause on student loan payments through September, allowing the new administration to begin delivering on its campaign promise to prioritize and begin addressing the more than $1.5 trillion debt crisis.

Requesting the department issue a forbearance extension on federal student loans was among 17 executive actions Mr. Biden signed on his first day in office Wednesday evening. Many, including his action on student debt and and an extension on eviction and foreclosure moratoriums, are aimed at relieving Americans from economic burdens worsened by the coronavirus pandemic. 

According to the latest Ellie Mae Millennial Tracker, 45 percent of all loans closed by millennial borrowers in November were refinances. That is up three percentage points from the month prior. 

The average interest rates on 30-year loans dipped for the eighth consecutive month in November down to 2.97 percent. The report says the dip in interest rates spurred the increased refinancing activity. 

“With interest rates reaching historic lows, millennials have refinanced to take advantage of a significant savings opportunity they will see play out over the long-term,” ICE Mortgage Technology President Joe Tyrrell said.

Home sales activity ticked up in the final month of 2020 and annual sales activity reached its highest levels since 2006.

Existing home sales increased 0.7% to 6.76 million in December from a month earlier and up 22.2% from the same time a year ago, according to the National Association of Realtors (NAR). The results beat analysts’ estimates compiled by Bloomberg of 6.56 million.

“Home sales rose in December, and for 2020 as a whole, we saw sales perform at their highest levels since 2006, despite the pandemic,” said Lawrence Yun, NAR’s chief economist, in a press statement. “What’s even better is that this momentum is likely to carry into the new year, with more buyers expected to enter the market.”