Major US Banks Paint Rosy Picture of Consumer Finances
Americans may be complaining loudly about high prices and an affordability squeeze, but the nation's biggest banks are telling a different story. Their latest earnings reports reveal a consumer base that continues to spend, save, and invest, even as surveys show poor economic sentiment.
Bank Executives Express Confidence
This week, banking giants like Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo released their fourth-quarter results. Top executives from each institution emphasized the ongoing resilience of households and small businesses.
JPMorgan CEO Jamie Dimon struck an optimistic note on Tuesday. He stated the next six to twelve months look quite positive. "Consumers have money," Dimon declared. "Jobs are still available, even if the market has softened slightly. Significant stimulus is also on the way from major legislation."
Bank of America's Chief Financial Officer, Alastair Borthwick, echoed this sentiment on Wednesday. He described consumers as being "in great shape." While the national savings rate has begun to dip, Borthwick noted his bank sees no evidence that people are borrowing more and saving less just to make ends meet.
Strong Data Backs Up the Claims
The numbers support these confident statements. By the end of 2025, invested assets held by Bank of America's retail clients had surged 16%, reaching approximately $600 billion. This growth was fueled by $19 billion in new client money flowing in over the course of the year.
"Consumers are still spending more, and that aligns perfectly with a growing economy," Borthwick added. Recent US retail sales data for November bolstered this view, showing the strongest growth since July. A rebound in automobile purchases and holiday shopping drove this increase.
Wells Fargo CEO Charlie Scharf provided another perspective. He explained that his bank monitors early warning signs like checking account activity linked to unemployment, direct deposit amounts, and overdraft patterns. "We have not observed any meaningful shifts in these trends," Scharf reported, suggesting underlying stability.
The Puzzle of Conflicting Signals
So, what explains the gap between strong bank data and widespread public complaints about affordability? The reality is complex and uneven.
Certain sectors, like housing and healthcare, present genuine and widespread affordability challenges. In areas such as food and gasoline, prices remain significantly higher than pre-pandemic levels due to past inflation, creating a persistent "sticker shock" for many families.
Data also reveals real pressure on lower-income Americans, a group often underserved by large banks. The Federal Reserve Bank of New York reports that the share of borrowers over 90 days late on credit card payments jumped to over 12% late last year, up from less than 8% at the end of 2022. Car loan delinquencies have also risen.
Why Big Banks Feel Insulated
Despite these stress points, major lenders are not yet feeling significant pain. For them, late payment rates on credit cards are not worsening. Furthermore, their actual losses on bad debts decreased as a proportion of total balances throughout 2025.
Even dedicated card companies like Capital One and Synchrony Financial, which have yet to report Q4 figures, are forecast to see only a slight uptick in net charge-off rates. These rates are expected to remain well below their levels at the close of 2024.
Political Proposals and Bank Pushback
The political landscape adds another layer. Former President Donald Trump has targeted high credit card interest rates and corporate ownership of rental homes as popular solutions to affordability woes. The banking industry has pushed back strongly against caps on credit card rates.
Citigroup CFO Mark Mason argued such a move would backfire. "It would restrict credit to those who need it most and would have a harmful impact on the overall economy," he stated. JPMorgan was even more direct, suggesting banks would explore all options, including legal challenges, to fight such a policy.
While their opposition is partly profit-driven, banks also warn it would lead to reduced lending, particularly to higher-risk borrowers.
The Outlook Ahead
As smaller US banks report later this month, they may show more signs of consumer strain. However, with unemployment still relatively low, any distress seems unlikely to be severe or widespread.
The takeaway is a tale of two economies. Affordability is a real crisis for some and a lingering concern for many others. Yet, from the vantage point of Wall Street's largest institutions, American consumer spending remains robust enough to keep driving economic growth and banking profits forward for the foreseeable future.
