Business

(NEW YORK) — The U.S. Department of Labor (DOL) fined three McDonald’s franchisees after an investigation determined that hundreds of children — including two 10-year-olds — were working there in violation of federal labor law.

The investigation was part of the Wage and Hour Division’s efforts to end child labor abuses in the Southeast, the Labor Department said in a news release on Tuesday.

As part of their investigation, officials found that Louisville, Kentucky-based McDonald’s franchisee operator, Bauer Food LLC, hired two 10-year old’s to work at one of its locations — unpaid — and as late as 2 a.m., with one of the children even permitted to operate a deep fryer, a task for which workers must be at least 16 years old.

“Below the minimum age for employment, they prepared and distributed food orders, cleaned the store, worked at the drive-thru window and operated a register,” the Labor Department said Tuesday.

Under Kentucky’s child labor laws, minors younger than 14 years old are not allowed to work.

“Too often, employers fail to follow the child labor laws that protect young workers,” Louisville, Kentucky, Wage and Hour Division district director Karen Garnett-Civils, said in a statement. “Under no circumstances should there ever be a 10-year-old child working in a fast-food kitchen around hot grills, ovens and deep fryers.”

The three franchisees, Bauer Food LLC, Archways Richwood LLC and Bell Restaurant Group I LLC, run a combined 62 McDonald’s locations in Kentucky, Indiana, Maryland and Ohio.

According to Bauer Food, the 10-year-olds were not employed at the company, but were a night manager’s kids who were visiting them at work.

Bauer Food said that management did not approve of the kid’s being in that part of the restaurant, adding that the company has made it clear to its employees this behavior is against policy, and addressed the policy regarding children visiting their parents at work.

Archways Richwood did not immediately respond to ABC News’ request for comment. Bell Restaurant Group could not be reached for comment.

The investigation concluded that among the three franchisees, 305 minors were employed.

The Department of Labor fined the businesses $212,544 in civil money penalties.

According to federal child labor rules, there are certain types of jobs that minors can work.

Kids who are 14 to 15 years old are limited to working no more than three hours on a school day, eight hours on non-school days. They also can’t work over 18 hours during a school week, and can’t work before 7 a.m. and after 7 p.m., except between June 1 and Labor Day, the Labor Department said.

Archways Richwood LLC, Bauer Food LLC, and Bell Restaurant Group I LLC were in violation of having minors working hours beyond the legal limits, according to the Department of Labor.

According to Garnett-Civils, there has been an uptick in federal child labor violations, including instances where minors are operating equipment or doing dangerous work.

Tiffanie Boyd, senior vice president and chief people officer at McDonald’s USA, called the incidents “unacceptable” and “deeply troubling” and go against the company’s ” high expectations” it has for its brand.

“It is not lost on us the significant responsibility we carry to ensure a positive and safe experience for everyone under the Arches,” Boyd told ABC News. “I know how important it is that every restaurant fosters a culture of safety. As a mother whose teenage son proudly worked at our local McDonald’s, I feel this on a very personal level. We are committed to ensuring our franchisees have the resources they need to foster safe workplaces for all employees and maintain compliance with all labor laws.”

The Wage and Hour Division discovered that in the fiscal year 2022, nearly 700 children were illegally employed in hazardous jobs, which was the highest yearly count since 2011, the DOL said in a news release.

According to the Labor Department, a 15-year-old was hurt while using a deep fryer at a Morristown, Tennessee, McDonald’s last year. The franchisee, Faris Enterprises of TN LLC, was fined over $3,000, DOL said in March.

Faris Enterprises did not immediately respond to a request for comment.

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(WASHINGTON) — The Federal Reserve on Wednesday raised its short-term borrowing rate another 0.25%, escalating the central bank’s attack on inflation just two days after the forced sale of First Republic Bank.

The Fed’s 10th consecutive rate increase arrives less than a week after fresh government data showed that U.S. economic growth slowed over the first three months of this year.

Despite the economic turbulence, the central bank appears dedicated to tightening its grip on prices.

Inflation has fallen significantly from a summer peak though it remains more than double the Fed’s target of 2%.

Speaking in Washington, D.C., on Wednesday, Fed Chair Jerome Powell reasserted the central bank’s commitment to cooling price increases but left open the possibility that the Fed could pause increases at its next meeting.

“Inflation pressures continue to run high,” Powell said. “The process of getting inflation back down to 2% has a long way to go.”

In response to a question about additional rate hikes, Powell noted the removal of a sentence that appeared in the Fed’s previous rate hike announcement in March that said “some additional policy increases might be appropriate.”

Powell described the omission in the announcement on Wednesday as “meaningful,” saying a decision about any additional rate hikes would be “data dependent.”

Increases in the Fed’s benchmark interest rate have contributed to the financial emergency facing U.S. banks.

As the Fed aggressively hiked interest rates over the past year, the value of long-term Treasury and mortgage bonds dropped, punching a hole in the balance sheets at some banks.

Three of the nation’s 30-largest banks have failed since March. While high interest rates contributed to the collapses, each of the banks also retained a sizable portion of uninsured depositors, who tend to panic without a government backstop for their funds.

The announcement on Wednesday raises the benchmark rate to a target range of 5% to 5.25%.

In a statement, the Fed affirmed the stability of the financial system but acknowledged the distress would likely cool the lending environment.

“The U.S. banking system is sound and resilient,” the central bank said. “Tighter credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation. The extent of these effects remains uncertain.”

The Fed has put forward a series of borrowing cost increases as it tries to slash price hikes by slowing the economy and choking off demand. The approach, however, risks tipping the U.S. economy into a recession and putting millions out of work.

Data released last week showed that economic growth slowed at the outset of this year, suggesting the rate hikes have helped put the brakes on business activity.

U.S. gross domestic product grew by a 1.1% annualized rate over the three months ending in March, according to government data released Thursday.

The data marked a slowdown from 2.6% growth in the previous quarter. The slowdown resulted from a decline in business investment and residential fixed investment, which includes money spent on home buying and construction, the data showed.

The U.S. added 236,000 jobs in March, which marks strong job growth, but lower than the average of 334,000 jobs added each month over the previous six months, according to government data.

Meanwhile, U.S. retail sales fell moderately in February but remained solid, suggesting that households still retain some pandemic-era savings.

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(NEW YORK) — Major changes at Twitter under CEO Elon Musk in recent months have elicited some calls for an alternative platform.

One such app, Bluesky Social, has drawn attention as a possible Twitter rival and amassed a waitlist of aspiring users.

Launched by former Twitter CEO Jack Dorsey, Bluesky features some prominent users, including model Chrissy Teigen and Rep. Alexandria Ocasio-Cortez, D-NY.

Access to Bluesky is available on an invite-only basis while the platform undergoes testing.

Neither Bluesky nor Twitter immediately responded to a request for comment from ABC News.

Here’s what to know about Bluesky and how to join:

What is Bluesky?

Bluesky is a text-oriented social media platform on which users can post messages as long as 300 characters. Like Twitter, the messages posted on Bluesky appear on a newsfeed displayed to users. The app is available on iOS and Android.

The platform operates on an open framework, meaning that users can post their messages to a server tailored for specific interests or communities. The system design resembles that used on another text-first app, Mastodon, as well as the decentralized platform Discord.

The site began in 2019 as a venture at Twitter overseen by Dorsey, and spun out as an independent company last year.

Development of the site started after a tweet from Dorsey announcing Twitter’s plans to fund a decentralized social media platform, Bluesky said in a blog post. The eventual leaders at Bluesky were among those who sent direct messages to Dorsey in response to his post, the blog added.

As of last April, Bluesky had received $13 million in funding from Twitter to “ensure freedom and independence,” Bluesky said in a statement last year.

Who owns Bluesky?

The board of directors at Bluesky features Dorsey as well as Jeremie Miller, the founder in the late 1990s of a free instant messaging service called Jabber.

The CEO of Bluesky is Jay Graber, who formerly founded an events-oriented social media site called Happening and worked as a software engineer on a cryptocurrency Zcash, according to LinkedIn. She also serves on the board.

The company is owned by Graber as well as “the Bluesky team,” the Bluesky website says.

While Bluesky has retained a traditional structure featuring a board and chief executive, the company said it aspires to take control of content away from a top-down entity and return it to creators.

“Traditional social networks are often closed platforms with a central authority,” the website says. “There’s a small group of people who control those companies, and they have total control over how users can use the platform and what developers can build.”

The system organization offered at Bluesky “changes this,” the website adds.

Dorsey criticized Musk’s leadership at Twitter on Bluesky last week, saying that “all went south” at the platform after Musk’s acquisition, CNBC reported.

Is Bluesky a viable challenger to Twitter?

Since Bluesky is still in its infancy, whether the app can compete with Twitter remains unclear.

Right now, Bluesky is much smaller than Twitter. The Bluesky app has recorded more than 360,000 downloads in the Apple store as well as over one million inquiring users on its waitlist, Fortune reported last week.

As of last week, more than 40,000 users had been given access to Bluesky, Bloomberg reported.

For context, Twitter reported 41.5 million average daily active users over the three months ending in June, which marked the last earnings report period before Musk took the company private.

The platform’s user data is no longer publicly available but in November Musk said usage had reached “an all-time high.”

How do you get Bluesky invite?

Access to Bluesky is only available to users who receive an invite, since the site is undergoing testing.

A sign-up on the company’s website allows individuals to join a waitlist by sharing their email address.

The company has not offered a timeline for when it plans to make the site public.

Copyright © 2023, ABC Audio. All rights reserved.

(WASHINGTON) — Millions of Americans who rely on federal payments to make ends meet, could be negatively impacted if the government is unable to pay its bills come June 1.

If allowed to happen, economists agree the first debt default in U.S. history would be an economic catastrophe and could trigger a global financial crisis. Allowing the U.S. to default on its debts would induce “a self-inflicted recession,” Gregory Daco, Chief Economist at EY-Parthenon, wrote in a note to clients this week.

This week Treasury Secretary Janet Yellen put Congress on notice. In a letter to House Speaker Kevin McCarthy, R-Calif., Yellen warned the U.S. could be unable to “continue to satisfy all of the government’s obligations” by June 1 if Congress does not raise or suspend the debt limit before that time.

Yellen wrote that a debt default would “cause severe hardship to American families.”

The federal government would have to make hard decisions, like who gets paid and when, and the consequences would be far-reaching.

Will Social Security be affected by debt ceiling?

Payments to 67 million Social Security beneficiaries could be halted.

However, a 1996 law provides an escape clause that allows the Treasury Department to continue paying Social Security benefits, even if there is a delay in raising the debt ceiling. “There is legal authority, and it arguably should be used to make sure benefits are paid,” Steve Robinson, chief economist for the bipartisan Concord Coalition wrote in a recent paper.

The law allows for the Social Security trust fund to be drawn down to keep those benefits flowing until the debt limit is raised, while prohibiting those funds from being used to pay for any other government programs.

There’s very little Americans can do to prepare for the unprecedented event of a U.S. debt default, “since it’s difficult to know what payment would be made, in full or in part as well as the timing,” Daco wrote.

Analysts say your best defense is to keep your own financial house in order. They say having emergency savings on hand and paying down debt will be more important than ever.

What else could be impacted?

Payments on other U.S. obligations, including for Medicare and Medicaid, SNAP food assistance, Veterans’ benefits, housing assistance, and school lunch programs would also be at risk, inflicting pain on Americans across the country.

The U.S. credit rating would most likely be downgraded, sending interest rates higher and making it more expensive for businesses and consumers to borrow money.

Analysts say a credit market freeze could hurt the ability of U.S. companies to operate effectively.

Yellen also warned that a debt default would “harm our global leadership position,” as world financial markets lose faith in the U.S. and its ability to pay its bills. The government would not have the money to pay back buyers of its bonds and other securities, causing the U.S. dollar to weaken and the stock market to tumble, hurting Americans’ retirement savings and other investments.

Debt limit could hurt jobs, unemployment

The damage would largely depend on how long the impasse lasts.

If the default lasts for about a week, close to 1 million jobs would be lost, the unemployment rate would jump to about 5% and the economy would contract by nearly half a percent, according to the financial services company Moody’s.

But if the impasse drags on for six weeks, Moody’s estimates more than 7 million jobs would be lost, the unemployment rate would soar above 8% and the economy would decline by more than 4%.

How did we get here?

The Biden Administration and House Republicans have been deadlocked in debt negotiations for months.

House Republicans passed their own bill that slashes government spending in exchange for raising the debt ceiling, but President Joe Biden has said he will not negotiate with them until spending talks are separated from the debt limit.

A recent ABC News/Washington Post poll finds broad worry about the consequences of default among Americans.

A vast majority of poll respondents, 82%, are very or somewhat worried that a government default would damage the economy. Just 26% of Americans adopt McCarthy’s position that Congress should allow the government to pay its debts only if the administration agrees to cut federal spending, while an overwhelming 65% agree with Biden’s view that the issues of debt payment and federal spending should be handled separately.

Copyright © 2023, ABC Audio. All rights reserved.

(NEW YORK) — In a sea of quality job candidates, you need to make sure your resume is up to snuff and easily skimmable for recruiters to quickly decide to pull yours from the pile.

It can take just six seconds to make an impression with your resume, according to The Wall Street Journal, which spoke to a career coach executive.

ABC News Chief Business Correspondent Rebecca Jarvis shared a few tips that can help make your resume stand out:

Change the bio paragraph into a punchy headline

First, Jarvis suggested swapping that professional statement for a one-line headline.

The days of including a short paragraph to summarize your experience, skills and achievements are gone. Instead, create a headline that will match the role you are applying for.

In the past, a resume might have included something that looks like this: “Sales manager with a decade of experience. … Eager for an opportunity to bring my experience leading a team and launching successful campaigns to market a valuable product.”

The new update for a similar resume should simply state: “Senior software sales manager.”

Trim your work experience

For applicants with a range of work experience, think about altering it for the job you’re applying for and cut out any irrelevant experience to help give hiring managers a clearer understanding of how you’ll fit into the job.

Jarvis explained that you don’t need to pack your resume with every job you’ve ever had, but focus on relevant work history. Customize your resume a bit for the job you’re seeking. Pointing out twists and turns in a career can make some experts think you might be overqualified, which can exclude you early on. Make the resume make sense to help get your foot in the door to sell yourself.

Basic do’s and don’ts to keep in mind

• Do: Update your LinkedIn profile.
• Do: Brush up on your interview skills.
• Do: Take advantage of LinkedIn features and make sure you’re active on the site. For example, Jarvis suggested changing key words in your profile every two weeks to prompt the algorithm to scan your profile and thus help keep you at the top of searches.
• Don’t: Experts warn against using the “open to work” banner to avoid discrimination against people between jobs.
• Don’t: Use ChatGPT or artificial intelligence to write your resume.

Copyright © 2023, ABC Audio. All rights reserved.

(NEW YORK) — The collapse of First Republic Bank on Monday left it under control of the U.S. government, which quickly sold the bank to JPMorgan Chase. The move aimed to shore up the financial system after a cascade of major bank failures.

JPMorgan Chase, the nation’s largest bank, retained the majority of First Republic’s assets and all of its deposits, JPMorgan Chase said on Monday. In turn, the deal fully protects depositors at First Republic, who immediately became customers of JPMorgan Chase.

To achieve the rescue, however, a federal agency provided $50 billion in financing to JPMorgan Chase, setting off questions about whether the government had orchestrated a bank bailout.

Speaking at the White House on Monday, President Joe Biden applauded the government effort and assured that the move would not require taxpayer support.

“Regulators have taken action to facilitate the sale of First Republic Bank and ensure that all depositors are protected and the taxpayers are not on the hook,” Biden said.

“These actions are going to make sure that the banking system is safe and sound,” he added.

Here’s what to know about the rescue of First Republic and whether it’s a bailout:

Is the First Republic rescue a bailout?

First Republic, the nation’s 14th-largest bank, fell into financial turmoil because it specialized in long-term mortgage loans to affluent clients.

As interest rates rose rapidly over the past year, the mortgage loans and other investments lost value, leaving the bank with losses on a sizable portion of its balance sheet.

After the failure of Silicon Valley Bank and Signature Bank last month, panicked depositors withdrew a significant share of the bank’s funds in part because many of the customers held deposits that exceeded the limit covered by federal insurance.

If the bank had failed without a buyer, the remaining uninsured depositors may have lost their funds.

JPMorgan Chase on Monday agreed to acquire all of the bank’s $103.9 billion in deposits as well as the majority of its $229.1 billion in assets, according to the Federal Deposit Insurance Corporation, a federal agency.

As part of the deal, the FDIC provided $50 billion in financing to JPMorgan Chase, the bank said on Monday. Ultimately, the final cost to the FDIC will be approximately $13 billion, the agency said.

The financing from the FDIC qualifies as a bailout since it marks the transfer of funds from the U.S. government to JPMorgan Chase as a condition of the sale of First Republic, some experts told ABC News.

“The biggest fear is banking runs and lost confidence — that is why the FDIC had to act quickly,” said Edward Moya, a senior market analyst at broker OANDA. “I would consider that a bailout.”

“The focus is to make sure the bank failure doesn’t significantly lead to a crisis,” he added.

Anat Admati, a professor at Stanford’s Graduate School of Business, echoed the sentiment, noting that the FDIC appears to have helped ease the acquisition of First Republic.

“This seems to be more that guaranteeing deposits, and then it becomes something that I would consider a bailout,” Admati told ABC News.

In backstopping First Republic customers, however, the FDIC ultimately carried out its mandate of guaranteeing depositors, even if by indirect means, Morris Pearl, a former managing director at asset manager BlackRock, told ABC News.

“It depends on your definition of the word ‘bailout,'” Pearl said. “It’s kind of like if you damage your car, the insurance company might pay to repair the car or they might say this car is beyond hope and we’ll give you money to buy a new car.”

JPMorgan Chase said the government chose it as a buyer because the bank’s bid gave the FDIC more favorable terms than rival offers.

“Our financial strength, capabilities and business model allowed us to develop a bid to execute the transaction in a way to minimize costs to the Deposit Insurance Fund,” JPMorgan Chase CEO Jamie Dimon said in a statement.

Will the sale of First Republic cost U.S. taxpayers?

The government funds required for the sale of First Republic will come out of the Deposit Insurance Fund, a pool of billions of dollars kept in case the government needs to cover insured depositors after a bank failure, the FDIC said.

The Deposit Insurance Fund receives funding from banks, which pay insurance premiums in order to receive protection from the U.S. government and offer that guarantee for customers. The agency also derives income from investments made with the insurance revenue.

In turn, the bailout of First Republic will not draw on individual taxpayers, since the funds do not come from taxes levied on everyday Americans.

If the banking panic continues to spread, the federal government may have to take further action that draws on the Deposit Insurance Fund, potentially exhausting the fund and calling on taxpayers to supplement it with additional money.

For now, however, such an outcome appears remote. At the end of last year, the Deposit Insurance Fund held $128.2 billion, according to a quarterly report.

Copyright © 2023, ABC Audio. All rights reserved.

(LOS ANGELES) — Unions representing thousands of Hollywood movie and television writers voted last month to authorize a strike when their contracts run out at midnight on Tuesday.

The WGA called for a strike effective 12:01 a.m. PST on Tuesday.

Now, the time is here, with writers demanding that studios pay them accordingly as shifts in streaming have changed the way shows are made and monetized.

The Alliance of Motion Picture and Television Producers said in a statement on Monday night that its negotiations with the Writers Guild of America “concluded without an agreement today.”

“The AMPTP member companies remain united in their desire to reach a deal that is mutually beneficial to writers and the health and longevity of the industry, and to avoid hardship to the thousands of employees who depend upon the industry for their livelihoods,” the AMPTP statement read, in part.

The current television landscape is vastly different than it was in 2007.

Since the rise of streaming, viewers are much less tied to linear TV lineups, and that will dampen the immediate effect on scripted shows.

Mega-studios now have much more content in the pipeline for distribution across multiple platforms, meaning there would not be such an immediate drought of scripted TV.

Late-night TV, on the other hand, will once again be the quickest area to be impacted. If no agreement is reached, you can say goodbye to the remainder of the current season of Saturday Night Live, and daily late-night hosts will have to decide if they will remain in production without their writers like they did in 2007.

“It may be a long time before viewers really feel the impact of a strike if it were to go on for many weeks,” Cynthia Littleton, co-editor-in-chief at Variety, told ABC News, adding that Netflix, Hulu and other streaming services have “such vast libraries of shows.”

Helping soften the blow of this strike is the timing, as many traditional TV programs have already wrapped up shooting their seasons and broadcast networks are gearing up for a summer of game shows and reality TV.

New experimentation in programming

Media companies are already experimenting with different types of shows across linear, streaming and cable, and a writers’ strike will only hasten those companies’ plans, according to Littleton.

“Those companies will have every incentive to look across their vast array of content assets and say, ‘Well, I have a big hole to fill on ABC at nine o’clock on Thursdays. What if I tried this show?’ And I think that you could, if there is a prolonged strike, you could see that will absolutely accelerate more of that experimentation that is already happening,” she said.

How writers are compensated as TV seasons get shorter and shorter is an issue at hand

The age of television, where networks were previously giving television series’ 22 episodes a season, has changed, according to entertainment attorney Jonathan Handel.

“Streaming series are 10, eight, sometimes even six or even four episodes and that has affected cable television as well,” Handel told ABC News. “It’s affected network television as well. The number of episodes produced in aggregate per year in this business has actually declined.”

“In effect, people are — especially writers — are hired by the series, but they’re paid by the episode,” he added. “So, when you’ve got more people sharing a pie that in some ways is smaller, you have a structural pressure that is very hard to relieve, on the labor market.”

A writer strike could cost the economy billions of dollars

Of course, the broader economic impact in Los Angeles, as well as New York, Georgia and New Mexico, among other cities, will be enormous.

With productions shut down, people well beyond writers — from anyone involved in productions to restaurants near studios — will be feeling the pinch as the strike moves on.

The most recent full-fledged strike took place in 2007 and cost the California economy an estimated $2.1 billion.

“The economic impact of the last writers’ strike, 15 years ago, was about $200 million or more a day,” Handel said.

Those costs factored in a lot of people who were not able to pay their mortgages and rent, bought less food, and spent less on discretionary items, according to Handel.

“The impact today — with inflation and the degree of connectedness to the economy — would no doubt be significantly larger than that,” he said.

Copyright © 2023, ABC Audio. All rights reserved.

(NEW YORK) — First Republic Bank has become the third bank to fail in recent months and the giant JPMorgan Chase will assume all of its assets, according to the Federal Deposit Insurance Corporation.

The FDIC said the deal avoids the agency having to use its emergency powers and would minimize disruptions for customers. It comes in the wake of the failure of Silicon Valley Bank and Signature Bank shortly thereafter.

Under the deal JPMorgan Chase is set to take on “all of the deposits and substantially all of the assets of First Republic Bank” after the Federal Deposit Insurance Corporation (FDIC) confirmed that the troubled bank had collapsed on Monday.

“JPMorgan Chase Bank, National Association submitted a bid for all of First Republic Bank’s deposits. As part of the transaction, First Republic Bank’s 84 offices in eight states will reopen as branches of JPMorgan Chase Bank, National Association, today during normal business hours,” the FDIC said in a statement obtained by ABC News. “All depositors of First Republic Bank will become depositors of JPMorgan Chase Bank, National Association, and will have full access to all of their deposits.”

First Republic Bank is the third major U.S. bank to collapse in recent months.

“As of April 13, 2023, First Republic Bank had approximately $229.1 billion in total assets and $103.9 billion in total deposits,” the FDIC said. “In addition to assuming all of the deposits, JPMorgan Chase Bank, National Association, agreed to purchase substantially all of First Republic Bank’s assets.”

The collapse of Silicon Valley Bank in March and Signature Bank shortly after that prompted widespread fears of a wider banking crisis that could affect the global economy.

The FDIC added that avoiding a takeover by the agency would “minimize disruptions for loan customers.”

Jonathan McKernan from the FDIC Board of Directors released a statement early Monday regarding First Republic Bank’s collapse.

“I am pleased we were able to deal with First Republic’s failure without using the FDIC’s emergency powers. It is a grave and unfortunate event when the FDIC uses these emergency powers,” said McKernan. “Any decision to use the FDIC’s emergency powers should be approached skeptically, taking into account the unique facts and circumstances of the time, and with careful attention to the implications for the future.”

ABC News’ Victoria Arancio contributed to this report.

Copyright © 2023, ABC Audio. All rights reserved.

(NEW YORK) — Turmoil in the financial system returned this week as shares of First Republic Bank, the nation’s 14th-largest lender, plummeted more than 75%.

The selloff took hold after the bank revealed that depositors had fled en masse last month after the collapse of Silicon Valley Bank, the largest U.S. bank failure since the 2008 financial crisis.

The ongoing distress at First Republic rekindled questions about whether the banking industry has regained solid footing or teeters on the brink of wider failure.

While the financial system remains under stress, experts said, the current unrest is unlikely to pose a systemic risk, since the damage is contained within a relatively narrow group of banks vulnerable to high interest rates and depositor panic.

Still, the ultimate outcome is difficult to predict, in part because the extent of the fallout depends on how depositors respond to the possible failure of additional banks, such as First Republic, some experts said.

Here’s what’s happening in the banking industry right now, and whether the crisis has passed, according to experts:

What is happening in the banking system right now?

Many of the forces behind the Silicon Valley Bank collapse, experts said, continue to put pressure on the banking system: high interest rates, concern among uninsured depositors and the potential for social media chatter that escalates panic.

As the Fed aggressively raised interest rates over the past year, the spike dropped the value of Silicon Valley Bank’s Treasury bonds and mortgage bonds, punching a hole in its balance sheet.

Because Silicon Valley Bank served a relatively concentrated group of tech startups and venture firms, many of whom held uninsured deposits, a disclosure last month of the bank’s financial losses sparked a panic that quickly escalated into an old-fashioned bank run.

First Republic, which specialized in long-term mortgage loans to affluent homebuyers, faced the same exposure to high interest rates and fear among depositors with uninsured deposits, experts said.

“First Republic is basically the same story,” Steven Kelly, a researcher at the Yale Program on Financial Stability, told ABC News.

However, an additional source of pressure arose in the aftermath of the collapse of Silicon Valley Bank: a shift of deposits out of small banks and into large ones, experts said.

Over the week following Silicon Valley Bank’s failure, small banks lost $108 billion in deposits, Federal Reserve data showed.

Meanwhile, deposits to the nation’s 25 biggest banks increased by $120 billion over that week, the data said.

“The deposit flight away from the small- and medium-sized banks means that the funding model for a lot of these banks is going to be under huge pressure,” Huw Roberts, the head of analytics at Quant Insight, told ABC News.

Is the financial system under systemic threat?

The ongoing turmoil is unlikely to threaten the wider banking system because the risk of collapse remains limited to a specific set of banks that failed to adequately protect their balance sheets, experts said.

“SVB was an extreme example. First Republic is an extreme case,” William Chittenden, a professor of finance at Texas State University, told ABC News. “These are banks that played the extremes.”

The fall of Silicon Valley Bank also brought immense stress upon the 29th-largest U.S. bank, Signature Bank, which ultimately collapsed.

“While big, these banks are not representative of where most people bank,” Kelly said. “It’s not a problem that plagues the whole system.”

“This is a crisis of some banks,” Kelly added. “It’s not a crisis of banking.”

Roberts, of Quant Insight, echoed the point: “The immediate systemic risk is gone as far as whole banking system being threatened.”

Still, the possible failure of First Republic and other vulnerable banks could set off a panic with implications that are nearly impossible to predict, some experts said.

At the end of last year, U.S. banks were sitting on $620 billion in unrealized losses, or holdings that have fallen in price but have yet to be sold, the Federal Deposit Insurance Corporation found.

“Standing alone, First Republic isn’t presenting a systemic risk,” Joe Lynyak, a partner at the international law firm Dorsey & Whitney and an expert on bank failures, told ABC News. “But if it creates a chain reaction of other banks with the public reacting the same way, you could end up with that.”

“We’re just going to have to wait and see,” he added.

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(NEW YORK) — Kia and Hyundai owners whose cars were damaged or stolen in the wake of a social media video teaching people how to easily steal the cars are now waiting months for repairs after a shortage of parts.

Many of the cars are recovered within a few days after the thieves are done with their joyrides. Often the back window is smashed and the steering column is damaged or destroyed, making those parts the hardest to find.

Stefan Mantyk’s 2018 Kia Rio was stolen in Michigan on Feb. 10. Police recovered the damaged car a week later but he says the vehicle is now sitting at the dealership.

“They had everything else fixed but then they found out that the steering column lock was broken. It turned out that the entire steering column top needed to be replaced,” Mantyk told ABC News.

Gregg Van Slyke, a 76-year-old retiree from Portland, is in a similar situation. His 2012 Hyundai Sonata was stolen early in the morning on Super Bowl Sunday. Police recovered the car later that day but it’s since been parked at the dealership waiting on parts.

States say Kia and Hyundai need to “step up”

Both Mantyk and Van Slyke are victims of the so-called “Kia Challenge” — a viral social media challenge that sparked a surge in thefts of Kia and Hyundai cars across the United States. Thieves targeted certain Kia and Hyundai models manufactured between 2011 and 2022 that lack anti-theft controls. Would-be thieves use screwdrivers and USB cables to steal the vehicles.

Twenty-three states have called on automakers to “take swift and comprehensive action” to curb the rise in thefts. Wisconsin Attorney General Josh Kaul said there were 6,970 Kia and Hyundai vehicles reported stolen in Milwaukee in 2021, up from a total of 895 in 2020 — a nearly 800% increase. Thefts of the cars declined slightly in 2022.

In Minneapolis, thefts of Kia and Hyundais increased by 836% in 2022 over the previous year. And in St Louis County, thefts surged 1,090% from 2021 to 2022.

Eighteen attorneys general have also called on the National Highway Traffic Safety Administration (NHTSA) to recall some Kia and Hyundai vehicles. “Thefts of these Hyundai and Kia vehicles have led to at least eight deaths, numerous injuries and property damage, and they have diverted significant police and emergency services resources from other priorities,” the agency said.

In response to the thefts, Kia and Hyundai have rolled out a free software upgrades for their vehicles not equipped with immobilizers. The automakers have also been distributing steering wheel locks for local law enforcement to give to drivers.

Victims say there’s no timeline for getting their vehicles fixed

Mantyk said he was able to get a rental car from his insurer after his was stolen. But after 30 days he needed to find another way to get around.

“I’m an independent contractor, so I go from job to job and not having my own vehicle for a while made it very difficult to get to jobs. I had to pass on work,” Mantyk said. “I ended up buying a car for like a thousand bucks just so I could get from point A to point B. I don’t know how reliable it is.”

Van Slyke said he needs to drive to and from doctors’ appointments three times a week. His insurance gave him a rental for just 10 days.

“My insurance rental ran out, so I had to give up that car and then I used Lyft for a while and then I was able to harass my dealership into finally getting the loaner car,” Van Slyke said. “I’m very grateful for that because I have medical appointments that I need to go to and it was getting pretty difficult to get around.”

He added, “The service representative that I’ve been talking to doesn’t know when or if they’ll get a part to replace it, because there’s been so much demand due to the high theft of Hyundais nationwide. So we’re kind of stuck there.”

Both Mantyk and Van Slyke said they have no idea when they’ll get their cars back.

The dealership doesn’t know “when the parts are going to be coming in because Kia corporate doesn’t give them any information as to when they’re getting parts in,” Mantyk said.

Van Slyke said he has since joined a class-action lawsuit against the automakers.

When asked about the parts shortages, Kia told ABC News some of these parts have been out of production for years and supply chain issues have been exacerbating the problem. The company, however, is “doing all we can to assist and working with our dealers to make sure any and all available parts are being redistributed to where needed most.”

Hyundai told ABC News it was “aware of minimal reported instances of some parts on back-order” and it “constantly monitors and proactively manages its parts supply chain to ensure a stable supply of parts delivered to our customers.”

“I don’t know what the future holds for my vehicle”

Mantyk and Van Slyke said they don’t know if they’ll continue to drive their cars once they get them back.

“Once I have my car, what am I supposed to do with it? Because I can’t drive it anywhere less it gets stolen,” Mantyk said.

Mantyk said he’s made three car payments since his Kia was initially stolen.

“My biggest frustration is probably the whole fact that I’m paying on a car that I can’t keep. I can’t sell it because it’ll just get stolen from somebody else,” he said.

Van Slyke said he hopes Hyundai will recall his vehicle and replace the ignition system, saying he’s worried it would get stolen again in the future.

“I believe that if I get the car back again, I will attempt to sell that car and buy a car that’s not so high on the theft list,” Van Slyke said.

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