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Jun 2, 2021

Axios Closer

🐪 Welcome back. Today's newsletter is 694 words ... 2½ minutes.

🔔 The dashboard: The S&P 500 closed up 0.1%.

  • Biggest gainer? Oilfield services company Schlumberger (+8%). It said this year's revenue would top Wall Street expectations as oil demand rebounds.
  • Biggest decliner? Steel producer Nucor (-5%). It's coming off its highest level ever.
1 big thing: Consumer win ... New ripple in fee fight

Illustration: Sarah Grillo/Axios

Ally Bank is doing away with overdraft fees.

  • It could be an opening salvo for the industry facing mounting pressure in Washington for the decades-long practice.

Why it matters: Banks rake in billions fining customers who spend more money than they have in their account. It's one of many fees associated with banking — shouldered most often by those who can least afford it.

Driving the news: Digital-only Ally Bank is nixing overdraft fees entirely, after waiving them for a period during the pandemic. Previously, it dinged customers $25 each day the account was overdrawn.

But, but, but: The move isn't as Earth-shattering for Ally's business as it could be for others.

  • The fees were a microscopic part (0.07%) of its revenue. Roughly 1 in 8 of its customers overdrafted, Diane Morais, head of Ally's consumer banking products, tells Axios.

The big picture: Low-to-moderate income Black and Latino households were responsible for $255 billion worth of interest and fees for financial services (including overdraft fees) — out of the $303 billion collectively spent nationwide last year, according to a report by the Financial Health Network.

What to watch: What the mega-banks do on overdraft fees.

  • The backdrop: During a hearing last week, Sen. Elizabeth Warren (D-Mass.) asked big bank CEOs whether any automatically waived overdraft fees during the pandemic None of the CEOs had, though JPMorgan’s Jamie Dimon said the bank refunded fees when customers asked.
  • Warren got crickets when she pushed for a pledge that the banks would refund those fees.

Of note: JPMorgan, Citigroup, Wells Fargo and Bank of America took in $4 billion from overdraft charges in 2020 — 27% less than the prior year, according to the Financial Services Forum, the industry's trade group.

  • Overall, bank revenue from overdraft fees dropped for the first time in six years in 2020, the Wall Street Journal reports — citing data from Moebs Services.
2. Charted: The telework disparity
Expand chart
Reproduced from Economic Policy Institute; Chart: Axios Visuals

New numbers crunched by the Economic Policy Institute illustrate who's benefited most from the pandemic work-from-home phenomenon.

  • Plus ... Those working from home are overwhelmingly white.

Why it matters: "Disparities persist between who can safely stay home and get a paycheck and who cannot," Economic Policy Institute researchers Elise Gould and Jori Kandra write.

3. What's moving

🍿 AMC mania continued as meme-stock mayhem helped double the share price and propel more than 500 million shares to change hands. (CNBC)

  • The theater chain's stock is up more than 2,500% so far this year.

🐔 Tyson Foods CEO Dean Banks stepped down from his position at the meat company — citing personal reasons — after just eight months. (WSJ)

🚨 Recovery milestone: The Fed will start to unwind the portfolio of corporate bonds and ETFs it amassed to shore up markets at the onset of the pandemic. (Federal Reserve)

4. LinkedIn pays up for diversity group leaders💰

Illustration: Sarah Grillo/Axios

LinkedIn will begin paying the global co-chairs of its employee resource groups $10,000 a year starting in July, Axios' Hope King is first to report.

Why it matters: Employee and affinity groups are most often run on a volunteer basis with limited financial support for their efforts.

What they're saying: "Historically, these employees take on leadership roles and the associated work in addition to their day jobs, putting in extra time, energy and insight. And despite the tremendous value, visibility and impact to the organization, this work is rarely rewarded financially," says Teuila Hanson, chief people officer at LinkedIn.

How it works: Global ERG co-chairs at LinkedIn serve two-year terms and will receive $10,000 at the end of each year of service.

  • The company has 10 ERGs with 20 global co-chairs and more than 5,000 members and allies.
  • More than 500 leaders will also be recognized in a new non-financial rewards system, the company says.

Joining the club: Two companies that have also started to compensate ERG leads within the past year — Twitter and Justworks.

Go deeper.

5. The Musk effect: Baby Shark edition

Photo: EuropaNewswire/Getty Images

Elon Musk got the shares in Samsung Publishing moving with — what else? — a tweet.

What’s new: Musk tweeted during today's Asia trading session that “Baby Shark crushes all! More views than humans,” and included a video of the song.

  • Shares of Korea-based Samsung Publishing — which invests in the producer of the viral song — popped by as much as 10%, but gave back some of those gains throughout the day.

Context: Musk’s tweets influence markets, so much so that as part of a 2018 enforcement action by the SEC, he agreed to have Tesla lawyers oversee his statements on social media. The WSJ reports that Musk has violated that policy.

6. What they're saying
"[Gen-Z] is an enormous demographic and it's the trendsetter demographic.”
— Etsy CEO Josh Silverman on the rationale for its $1.6 billion acquisition of London-based fashion reseller Depop

🙏 Thanks for reading.

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