Banks Just Pocketed $70 Billion in Profits While American Families Drown in Debt

U.S. banks hauled in $70.6 billion in profits during the first quarter of 2025, a 5.8 percent leap from last year, the FDIC reports. Higher interest rates drove a 10 percent rise in net interest income, boosting margins to 3.15 percent. For bank executives, it’s a moment to celebrate. But for millions of Americans facing rising costs, this massive windfall stings. Why do banks thrive while families struggle?

The numbers tell a grim story for consumers. Credit card delinquency rates rose to 2.9 percent, and subprime auto loan defaults climbed to 4.8 percent. People are falling behind on payments, yet banks are setting aside 1.8 percent of loans for potential losses, squeezing their bottom line. These aren’t just statistics; they represent families stretched thin, worrying about how to cover rent or groceries.

Higher interest rates are the engine behind bank profits. Banks charge more for loans while offering minimal returns on savings. But those same rates burden borrowers, from entrepreneurs launching startups to parents financing a car. The system feels rigged, rewarding banks with billions while ordinary people face mounting debt. How is that fair?

This growing divide demands attention. Bank profits reflect choices—choices that prioritize shareholder value over public good. The question isn’t whether banks can profit; it’s whether they should do so at the expense of everyone else. Families deserve a banking system that works for them, not against them.

Bank consolidation worsens the problem. In Q1 2025, $45 billion in merger deals concentrated 47 percent of industry assets among the top five banks. Supporters argue this creates efficiency, but the reality is far bleaker. Less competition has driven up consumer fees by as much as 15 percent in some areas. Rural towns, already short on services, lose branches, creating ‘banking deserts.’

This pattern stretches back decades. The 1994 Riegle-Neal Act sparked a wave of mergers, cutting the number of U.S. banks from 14,000 in the 1980s to roughly half by 2000. The 2008 financial crisis fueled more consolidation, with megabanks absorbing weaker rivals. Now, a few giants hold sway, their size amplifying risks. The 2023 regional bank failures showed how quickly instability can spread.

Fewer banks mean fewer options and higher costs for consumers. When a handful of institutions control the market, they set the rules, leaving small businesses and families with little leverage. The ‘too big to fail’ problem persists, threatening the economy when these giants falter. Shouldn’t we demand a system that prioritizes competition and fairness?

Advocates like Senators Elizabeth Warren and Bernie Sanders propose solutions. Reinstating the Volcker Rule to stop risky trading, raising capital requirements to a 10 percent CET1 ratio, and taxing bank profits above $3 billion at 5–10 percent could curb excesses. These steps would channel an estimated $20 billion a year into affordable housing and debt reduction, directly helping communities.

The 2008 crisis proved the need for oversight. The Dodd-Frank Act and Consumer Financial Protection Bureau curbed predatory lending and saved consumers billions. But recent moves, like the 2018 rollback of Dodd-Frank rules for midsize banks, have loosened those safeguards, letting banks chase profits unchecked. The 2023 bank failures exposed the dangers of this approach.

Bank lobbyists and their allies push back, claiming deregulation fuels lending and growth. They advocate lower taxes and fewer stress tests, promising more investment. Yet, the 2017 tax cuts enriched banks without spurring lending, and deregulation didn’t prevent 2023’s failures—it made them worse. Their arguments prioritize bank profits over public stability. Why should we trust them again?

The $70.6 billion in bank profits offers a chance to reset priorities. Taxing excess earnings could fund housing for millions, easing the strain on renters facing soaring costs. Higher capital requirements would shield against future crises, sparing taxpayers from bailing out reckless banks. These reforms would ensure banks serve the public, not just themselves.

Banking shapes our lives, from the loans we seek to the fees we pay. When banks prioritize profits, inequality grows, and trust fades. But stronger rules can create a system that lifts everyone. The FDIC’s report is a call to action. Let’s demand a banking sector that puts people first, ensuring fairness and security for all.