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Charles Schwab Corp. goes back on offense in banking -- promising to pump out discount loans with RIA help -- after rapid Fed rate hikes exposed extreme vulnerability in bank's asset base

After dodging classic rate squeeze, the discount broker will use its 10,000 RIA custody clients to put cash to work as equity loans against client portfolios

Author Lisa Shidler August 8, 2023 at 1:17 AM
Admin:
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Rick Wurster: When the lending environment improves, we're going to be there.
Brooke Southall and Keith Girard contributed to the editing of this article.

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FRANK

FRANK

August 8, 2023 — 4:58 PM
Regarding Pledged Asset Lines at Schwab, "The rate on a $2.5 million loan would be 1.9%. Pledged Asset Line amounts begin at $100,000 with a required initial minimum advance of $70,000, according to the website. " Just a clarification. 1.9% is the SPREAD on top of SOFR, not the rate. SOFR is running near 5%+ so rate would be ~7% on PALs. The previous paragraph mentions 'spread' but still probably needs a clarification that the spread of 4.65% is ON TOP OF the SOFR rate. Schwab could not offer loans at 4.65% and 1.9% in terms of a rate as they would not be solvent if did that.

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