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(WASHINGTON) — After saving up for three years during which they sometimes worked 80 hours a week, Tawanda Hall and her husband purchased their dream home in the suburbs of Detroit in 2010. The five-bedroom house was supposed to be their “forever home” — it had enough room for their family, and the location offered good schools in the area for Hall’s two kids.

“It was almost like a dream,” Tawanda Hall told ABC News Senior National Correspondent Steve Osunsami. “It was a brick home. It had a big yard, open space, a lot of different opportunities around the corner from school, around the corner from the rec center and the library.”

The house was purchased for $67,000, according to public records. Hall told ABC News that after they moved in, she and her husband put in a lot of money to renovate the home.

“Every time we got some money here or there, we just put it in,” Hall said. “I don’t even know where we got half the money. I was working, he was working, and it was coming together.”

“I would say,” Hall said, “we finally got it together right when we lost it.”

Property seizure

Around 2016, the Halls encountered financial hurdles and fell behind on their property taxes. Despite their efforts to chip away at their back taxes with a payment plan they set up with Oakland County, Michigan, they received an eviction notice for missing tax payments.

At the time, the Halls owed $22,654 in property taxes, including interest and penalties. They lost their home when the local county foreclosed on it in early 2018.

But the nightmare for the Halls didn’t end there.

In the eight months that followed, the property went through a maze of ownership — from Oakland County to the city of Southfield and then to a for-profit organization, the Southfield Neighborhood Revitalization Initiative, which says in court documents that they rehabbed the property then sold it in 2020 for $308,000.

That amount was more than four times what the Halls had paid for the house. The difference between what the home sold for and the taxes the Halls owed on it was more than $285,000.

The Halls, however, received nothing from the sale.

Property seizures like Halls’ — where the government takes property to pay an outstanding tax debt, and then someone other than the homeowner keeps more money than the taxes that were owed — is legal and happening in 11 states and Washington, D.C., according to Pacific Legal Foundation, a nonprofit public interest organization.

According to the group, from 2014 to 2021, homeowners altogether lost more than $860 million in the 8,950 homes that localities and private investors foreclosed on then resold for more money than what was owed in taxes.

Kenson Siver, the mayor of the city of Southfield — which was involved in the handling of the Halls’ home — told ABC News in a statement that he is supportive of the Southfield Neighborhood Revitalization initiative after “witnessing devastation to the neighborhoods after banks sold properties for below market value.” He said that people who can’t afford their homes face tax foreclosure by the county.

Officials from Oakland County and the Southfield Neighborhood Revitalization Initiative did not respond to a request for comment by ABC News.

Enter the Supreme Court

On Wednesday, the Supreme Court heard the case of Geraldine Tyler, a 94-year-old widow from Minnesota who accrued a tax debt of $2,300 that ballooned to $15,000 with interest, fees and other penalties. Hennepin County seized Tyler’s home and sold it one year later for $40,000 without returning the surplus of the sale.

“It’s just like if you owed me $14 and I reached in your wallet and I took everything, no matter how much was in your wallet,” said Christina Martin, a senior attorney at Pacific Legal Foundation who is representing Tyler. “When the government takes home equity from someone like Tawanda and takes more than it’s owed … it’s unfair and it’s unconstitutional and I really hope the Supreme Court agrees.”

The justices will decide whether seizures like Tyler’s violate the “Takings Clause” of the constitution’s Fifth Amendment, which says that “nor shall private property be taken for public use, without just compensation.”

Ralph Clifford, a law professor at the University of Massachusetts who has studied the practice, said the issue comes down to two questions.

“What they’re going to talk about at the Supreme Court are two things: One, if you take somebody’s property, you have to pay them a fair value; and two, the government cannot take more than it’s owed,” said Clifford.

“I think the Due Process clause requires the government to give back to the taxpayer anything that is not owed,” Clifford said. “The tax debt, yes; interest on the tax debt, OK. But if you have a $30,000 debt and you’ve taken a $300,000 property, take your $30,000 and give $270,000 back to the property owner. Because that is theirs, it’s not yours.”

In a statement to ABC News, Hennepin County officials said that in Minnesota’s property tax collection system, when someone abandons their property by not paying property taxes, “title to the property transfers to the state.”

“When properties are sold, net proceeds offset the loss to school districts, cities, and the county of uncollected property taxes,” said Hennepin County Assistant County Administrator Dan Rogan in the statement.

“Forfeiture is not a source of profit” for the county, Rogan said, adding that “factoring in all costs, Hennepin County’s (forfeiture) program does not manage to break even.”

Officials in municipalities like Hennepin County say they see forfeiture and resale as two separate steps. Per the law, they say that if you don’t pay your taxes, with proper notice and a chance to cure, you forfeit your property — period. Once you do, it’s no longer yours and state can do whatever it wants with it.

Courts have previously ruled in favor of municipalities because homeowners are given multiple opportunities to avoid foreclosure. In court filings, Oakland County, Michigan officials said they follow a “carefully reticulated, nearly three-year process that includes ample notice and multiple chances for the owner to pay the delinquent taxes.”

The Eighth Circuit U.S. Court of Appeals has sided with government officials who argued that “nothing in the constitutions of the U.S. or Minnesota, nothing in any federal or state statue, and nothing in federal or state common law give the former owner of a piece of property that has been lawfully forfeited to the state and then sold to pay delinquent taxes a right to any surplus.”

And those who support the practice say that unpaid taxes lead to abandoned homes and distressed neighborhoods, and that financial incentives are needed to attract people who want to come in and revitalize neighborhoods.

But Martin told ABC News the incentives are part of the problem.

“[This] happens because these legislatures have passed these laws that have these built-in perverse incentives that make it profitable for counties to foreclose on people,” Martin said.

She added that she is not challenging the government’s power to collect taxes and add on interest, penalties and other costs.

“What we’re saying is, there’s a limit,” Martin told ABC News. “You don’t get to just take everything. What we’re saying is, you can seize the property, but when you sell it, you don’t get to take everything.”

“They sold it for $40,000,” Martin said of Tyler’s home. “They should take their $15,000 and be happy with that and give the remainder back to Ms. Tyler.”

A national issue

Across the country, local lawmakers have taken up the issue, with some introducing their own bills to ban the practice.

ABC News spoke with Massachusetts Sen. Mark Montigny, who introduced a bill in the state Senate that would protect homeowners’ equity in a tax foreclosure.

“The most important thing it does is it basically suggests that the homeowner has a remedy,” Montigny, who has been working to ban the practice in Massachusetts for years, said of the bill. “They have an ability to pay off and can continue to stay in their home. And if they are foreclosed upon, they won’t have their equity stolen.”

Over a 6.5-year period, at least 254 Massachusetts homeowners lost a collective $60 million in home equity to municipalities, according to Pacific Legal Foundation.

“It’s unconscionable,” Montigny said of the practice. “You can collect your attorney’s fees, your fees that you went through the foreclosure process, but you should not be able to steal the equity from people who are struggling.”

“[The law] absolutely allows the city to engage in this, to do an improper job of notice, to disrespect or at least be indifferent about the dignity of the homeowner,” said Montigny.

Martin and other experts told ABC News that the practice has resulted in local governments creating special loopholes to allow them to keep the forfeiture surplus — so long as the property is used for public purposes.

Clifford, the law professor, told ABC News that whenever profits are available, “corruption is a possibility.”

“Where there’s money to be made, people are going to come out of the woodwork to make that money,” Clifford said.

In the meantime, Hall is still wondering if she will ever see the surplus from the sale of her home.

After the U.S. Court of Appeals for the Sixth Circuit ruled that the government violated Hall’s constitutional rights and that the government must pay compensation when it takes private property, Oakland County appealed the decision and filed a petition to the U.S. Supreme Court, arguing for the case to be dismissed.

Hall says she felt she was protected because her home was mortgage-free and she was on a payment plan with the county.

“I wish I would have just made sure those taxes were paid,” Hall said. “Because I left a window for someone to come in and change my life.”

Copyright © 2023, ABC Audio. All rights reserved.

(NEW YORK) — The seismic exit of Fox News host Tucker Carlson this week elicited reaction from politicians as varied as former President Donald Trump and Rep. Alexandria Ocasio-Cortez, D-N.Y.

But the move also sent shockwaves across Wall Street.

Shares of Fox News-parent company Fox Corporation on Monday tumbled more than 3%, which amounts to hundreds of millions in value.

Nielsen data on Tuesday showed a roughly 20% drop in audience for the first show featuring temporary replacement host Brian Kilmeade, according to The Hollywood Reporter.

The departure of Carlson, the nation’s most-watched primetime cable news host, could cause significant financial damage for Fox Corporation through diminished stock value, weakened income from cable carriers and lower advertising revenue, some analysts told ABC News.

“It has the potential to be massive,” Matthew Tuttle, the CEO and CIO of Tuttle Capital Management, who closely follows the media industry, told ABC News. “There’s going to be a very large impact from this. I don’t think you can dress it up as positive.”

However, some media industry analysts downplayed the potential damage since the company has overcome previous departures of high-profile hosts and the move offers an opportunity for the 8 p.m. show to draw corporate advertisers alienated by Carlson’s controversial programming, experts said.

When asked if the company would prove resilient, Huber Research analyst Doug Arthur told ABC News, “There’s no doubt in my mind. The company has survived these kinds of talent hits before.”

Following Carlson’s departure, Fox News told ABC News it’s still the most watched cable news network.

“For more than 21 years, FOX News Channel has been cable news’ most-watched network in all categories with more Democrats, Independents and Republicans now tuning in than either CNN or MSNBC,” a Fox News spokesperson told ABC News. “Attracting more of than 50% of the cable news viewing audience with the top 12 programs in cable news, FOX News’ powerhouse team of journalists, analysts and opinion hosts are trusted more by viewers than any other news source.”

The Fox Corporation did not respond to a request for comment. Carlson has yet to comment on his exit from the company.

Here’s how the departure of Carlson could impact Fox Corporation, according to analysts:

Stock value
After news of the Carlson exit broke on Monday morning, shares of Fox Corporation fell more than 3% by the close of trading that day. The following morning, the decline ticked past 3.5%, amounting to a lost value of more than $500 million.

“The initial stock move was all Tucker,” Tuttle said.

The market reaction stems from the loss of a high-profile star and anticipated attrition among his viewers, analysts said.

On average, Carlson’s 8 p.m. show reached about 3.25 million nightly viewers over the first four months of this year, outpacing competitors in the time slot and other nighttime hosts on Fox News, according to Nielsen.

“He was their ratings leader in primetime,” Huber said. “That’s going to hurt.”

The departure of Carlson compounds the financial damage and uncertainty caused by Fox News’ recent $787.5 million settlement with Dominion Voting Systems, Huber said.

“There’s a black cloud over the stock right now,” he added.

Still, the stock stabilized in trading on Wednesday, ticking up slightly for the day.

“The initial reaction seemed a little bit overdone,” Brandon Nispel, an analyst with KeyBanc Capital Markets, told ABC News. “I heard questions from investors: ‘Is Fox worth anything without Tucker.'”

“The answer is ‘yes,'” he added. “But it’s clearly worth something modestly less than when they had Tucker.”

Fees paid by cable carriers
Fox Corporation sales depend in part on fees paid by cable carriers like Comcast and Dish Network that distribute the company’s broadcasts.

Over the three months ending in December, such fees delivered $1.7 billion or 37% of Fox Corporation revenue, the company’s latest earnings report showed.

Analysts differed over the potential effect that the loss of Carlson poses for carrier fees.

Without Carlson and the promise of his sizable audience, the company will enter its next round of negotiations with cable carriers in a weakened position, potentially hurting the fees it can command, Tuttle said.

“That is a major concern because at least in the short term, they’re going to lose viewers,” he said. “There’s going to be an impact.”

However, the overall lead in audience enjoyed by Fox News in primetime will reassure cable carriers, limiting the effect of the personnel move, Arthur said.

“Their ratings lead is so large at night that I don’t think any distributor is going to screw around with having Fox News fall off of their network,” he said.

Nispel echoed the sentiment, saying he expects a limited effect on carrier fees.

“If anything, it will be a small margin of negative impact,” he said, noting that Fox Corporation already renegotiated several carrier agreements over the past year.

Advertising revenue
Fox Corporation derives the majority of its revenue from advertising, which made up 54% of sales over the final three months of 2022, an earnings report showed.

Since it boasts the largest primetime audience, Carlson’s show generated more advertising revenue last year than each of the 8 p.m. shows on CNN and MSNBC, as well as each of the other primetime shows on Fox News, a New York Times analysis of Vivvixx data showed.

In all, Carlson’s show delivered $77.5 million in advertising revenue last year, according to Vivvixx data.

The likely decline in audience for the 8 p.m. time slot at Fox News, at least in the short term, will hurt advertising revenue, analysts said.

“It creates a lot of uncertainty,” Nispel said. “They’re losing their leader in their primetime lineup.”

However, the move opens up an opportunity for the channel to attract corporate advertisers that previously balked at the controversial views expressed by Carlson, they added.

“It’s going to hurt in the short term,” Arthur said. But he later noted: “The point of strong ratings is to have strong advertising. If you have strong ratings but lousy advertising, what’s the point?”

The opening may attract a more moderate host who reassures major advertisers, Tuttle said, but he cautioned that a replacement would feel pressure to take up similarly controversial positions as a means of gaining a large audience.

“We’re in a society where controversy sells,” Tuttle said.

Copyright © 2023, ABC Audio. All rights reserved.

(NEW YORK) — Disney filed a lawsuit Wednesday in U.S. District Court against Florida Gov. Ron DeSantis and various Florida officials over a campaign the company alleges was “patently retaliatory, patently anti-business, and patently unconstitutional.”

This is a developing story. Please check back for updates.

Disney is the parent company of ABC News.

Copyright © 2023, ABC Audio. All rights reserved.

(NEW YORK) — What happens when a social media company succeeds at building a community, then threatens to destroy what its users spent years building?

Devoted users of TikTok face that very question, as the app faces bipartisan criticism and a potential ban stemming from its political and national security issues.

Having built niche followings on the short-form video site, content creators told ABC News that their communities might be unable to migrate to another platform if TikTok were banned, shattering the rare progress of a social media company accomplishing part of their community-building mission.

“If we lose this, I lose a very large community,” Rayne Loucks told ABC News.

With about 52,000 followers for his account @StarTrekGuy, Loucks is a part of the Star Trek community on the platform, though he is far from the archetype of a TikTok influencer. Lacking the hallmarks of TikTok — millions of followers, lucrative brand deals, prolific dance videos — Loucks posts in his spare time between working as an assistant teacher and delivering food for Pizza Hut.

“An important thing to know about me is that I am autistic. I do not have very many friends in real life,” he said. “Most of my friends are there, so I would be devastated.”

Though the timeline and potential for a nationwide ban of the platform are uncertain, the threat of a ban lingers for creators like Loucks, who worries he would lose his community, friends and support system that has allowed him to come out of his “shell.”

As TikTok grew to have over 200 million downloads in the United States, its initial success was primarily built on viral videos created by the slim minority of app users. More similar to YouTube than platforms like Facebook and Instagram, users grew accustomed to a steady feed of targeted content, according to Ted Murphy, the founder and CEO of social media marketing firm IZEA.

“The majority of people are there to be entertained, and they’re not being entertained necessarily by their cousin or their co-worker,” he told ABC News. “They’re being entertained by other people who are producing content that they’re interested in.”

Rick Mason, who posts to his 9,000 followers with the username @randomgotham, described that he initially thought the platform was “just a bunch of dancing videos” that didn’t appeal to him. Jimmy Shoffman, with about 1,000 followers for his account @TREKNOPOD, shared that initial view of the app. Another user Mary Faulds, who posts to her 15,000 followers under the username @flutemusik, told ABC News that she joined the platform to embarrass her kids.

As dance videos made normal teenagers into megastars, TikTok also began to foster niche communities with devoted content creators making videos for smaller, albeit committed, viewers.

All four creators eventually gravitated toward the Star Trek community on the platform, where they found a strong group of friends and collaborators.

“Star Trek is about people coming together from many different backgrounds and finding a sense of self, a sense of family, community, a place where you can be accepted and be yourself,” Mason said. “And I think that’s pretty much how I feel about the people I meet online. They really have become my family.”

Faulds, 33, added that finding friends in her small town of Galion, Ohio, a community she shares with her ex-husband, can be difficult.

“People will say, ‘Oh, I like Star Trek,’ but then when you start talking about like cosplay and conventions and stuff, suddenly you’re just a little too weird,” she told ABC News. “And I found people on TikTok who did not think that I was too weird.”

They attribute the company’s success to the platform’s approach to curating content on a “For You” page, which aggregates videos the platform believes users prefer based on their scrolling patterns and likes. The app also pushes users into niche communities, such as TrekTok, DatingTok, or PowerToolsTok.

“It’s like going to a party where you don’t know anybody,” Mason said to describe the way TikTok curates content. “I feel like TikTok tends to be like [the] host who tends to say, ‘Hey, so and so likes this, you guys should talk.'”

Despite these redeeming qualities, TikTok and its parent company ByteDance appear constantly embroiled in controversies, with critics accusing the company of giving Chinese government officials access to sensitive user data, including the specific profile that TikTok uses to curate its successful and individualized “For You” page.

“I don’t think that spying is the right way to describe it,” TikTok CEO Shou Zi Chew told members of Congress when asked if his company spies on US users.

ByteDance has denied this allegation multiple times, yet the company faces a ban in Montana and a threat of a federal prohibition.

Despite the national security risk articulated by politicians and federal law enforcement officials, some users see the risk as menial compared to other social media platforms.

“Google steals our data, Facebook steals our data,” Loucks noted. “Stealing data is the price of having a free online. I am willing to pay that price.”

Other users recognized that a foreign company might collect their data. Still, they opted to accept that risk considering the benefits that the platform brings to their lives — not just enjoying videos, but the feeling of finding a community at a time of overwhelming loneliness. Research from Harvard’s Graduate School of Education found that Americans’ mental health during the pandemic suggests that 36 percent of Americans, including 61 percent of young adults, experience serious loneliness.

“All of the sudden, I had friends, and it’s really difficult where I am to make friends,” Faulds said of the niche community on the platform.

However, the political headwinds TikTok faces in the U.S. threaten to damage or remove that community and others. Other platforms like YouTube and Instagram have embraced the short-form video platform that drove TikTok’s growth, but some users expressed doubt if the community they built could successfully migrate.

“A TikTok ban would result in me really feeling isolated because the community is so close,” Faulds added. “The loneliness would be real, whether or not they are ‘just virtual friends.'”

Copyright © 2023, ABC Audio. All rights reserved.

(NEW YORK) — Chevrolet is saying bye-bye to the Bolt.

The Chevy Bolt hatchback, as well as its crossover Bolt EUV sibling, will cease production this year, General Motors has confirmed to ABC News.

The Bolt starts at just under $27,000 before federal and state electric vehicle incentives, making it the cheapest way to get into a new EV in the United States.

In a statement, a Chevy spokesperson called the Bolt a “huge technical achievement,” but went on to say that “as construction continues at the Orion Township, Mich., assembly plant in preparation for battery electric truck production beginning in 2024, Chevrolet confirmed Bolt EV and EUV production will end late this year.”

“When the Bolt goes out of production, the American market will have lost its last affordable EV,” said Ed Niedermeyer, an auto industry analyst. The next cheapest electric car on sale is the Nissan Leaf S, which has an EPA-estimated range of 149 miles on a charge. That’s more than 100 miles short of the Bolt’s 259-mile range.

Chad Kirchner, editor-in-chief of EV Pulse, said GM’s decision to ax the Bolt shouldn’t come as a shock.

“It’s not surprising at all,” he said.

In 2021, the Bolt was the subject of multiple recalls over its battery, made by LG Chem. According to the National Highway Traffic Safety Administration, rare manufacturing defects made during the production of those batteries “may pose a risk of fire when charged to full, or very close to full, capacity.” GM issued a statement at the time advising Bolt owners to park their cars outside, and at least 50 feet from other vehicles. The company said at the time it would replace the battery modules. NHTSA says about half of the affected cars have had that replacement done.

The Bolt was also developed before GM rolled out its “Ultium” platform – an electric vehicle architecture that underpins everything from GMC’s Hummer EV pickup truck to a midsize Cadillac SUV called the Lyriq.

The Bolt was launched for the 2017 model year. While it wasn’t GM’s first electric effort, it was the company’s first EV sold in all 50 states. And it sold well – the Bolt was the best selling non-Tesla EV in the last two quarters of 2022.

The company says more affordable Ultium-based Chevy EVs are going to launch soon, including an electric Equinox SUV that’s expected to start around $30,000. Even still, Niedermeyer says price remains a hurdle for wide-scale EV adoption.

“Weak profits in EVs and a lack of regulatory support for lower price points will continue to place the emphasis on expensive premium EVs,” said Niedermeyer. “Only by emphasizing that EVs are best suited to the weekday driving that starts and ends at home, and by aligning incentives for cars and chargers with the opportunity that use case presents, will truly affordable EVs become a widespread phenomenon.”

In the meantime, Kirchner said until the Equinox goes on sale, GM could be leaving market share on the table in the growing EV market.

“I think they’re leaving a fairly big hole in the affordability segment,” he said, adding, “I think that EVs are being priced out of a certain customer’s price range, and that is the customer that could benefit the most from an EV.”

Copyright © 2023, ABC Audio. All rights reserved.

(NEW YORK) — Shares of First Republic Bank plummeted more than 25% in early trading on Tuesday as the banking crisis continued to ripple through the financial system.

The regional lender, left in dire condition after the failure of Silicon Valley Bank last month, suffered a major loss of $102 billion in deposits over the first three months of 2023, an earnings report showed on Monday.

The lost deposits made up more than half of the $176 billion retained by the bank at the end of last year.

In all, shares of First Republic Bank have fallen nearly 90% since the outset of the year.

The bank’s profit fell 33% to $269 million over the three months ending in March when compared with the same period last year, the earnings report showed.

Meanwhile, revenue dropped 13% to $1.2 billion over the first three months of 2023, the report said.

On an earnings call with analysts, First Republic Bank CEO Michael Roffler acknowledged “unprecedented deposit outflows” in the middle of March, saying the bank faces “challenges and uncertainties.”

“Over the past seven weeks as we were impacted by industry events, our commitment to delivering exceptional client service has not wavered,” he added.

The sharp decline of First Republic Bank shares comes more than a month after the nation’s largest financial institutions injected $30 billion in the bank to stem losses and exhibit confidence in the lender.

Bank of America, Citi, JPMorgan Chase, Wells Fargo and Goldman Sachs were among a slew of big banks that participated in the effort.

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.

JPMorgan Chase, the largest U.S. bank, received a huge wave of customers and deposits, amounting to hundreds of accounts and billions of dollars in the aftermath of the bank collapse, a source familiar with the matter previously told ABC News.

First Republic Bank came under stress in the days following the failure of Silicon Valley Bank on March 10, which marked the largest bank collapse since the 2008 financial crisis.

Two days after that came the fall of Signature Bank, the nation’s 29th-largest bank, suggesting that the banking crisis had spread.

The banking panic spooked many depositors, who rapidly withdrew their funds from smaller banks and placed them in larger ones.

In response, the U.S. government took rapid and extraordinary steps to protect the financial system.

Still, many bank stocks plummeted in March, including First Republic Bank. The company’s shares fell 88% over the course of that month.

Since then, the shares have stabilized, jumping 10% this month.

The weak earnings report on Monday and the stock decline on Tuesday, however, left in question the steadiness of the bank.

Bank executives declined to take questions on the earnings call on Monday.

Copyright © 2023, ABC Audio. All rights reserved.

(NEW YORK) — Tech giant Apple last week announced a buzzy product release — but it wasn’t a new version of its iPhone or virtual reality headset. Rather, the company offered its first ever high-yield savings account.

The move reflects growing demand for returns on savings as a topsy-turvy stock market, looming recession fears and aggressive interest rate hikes transform the old-fashioned savings account into a newly attractive financial option, personal finance experts told ABC News.

However, the yields on savings accounts could shift downward if the Federal Reserve reverses its policy of rate hikes, and prospective consumers should make sure that an account offering retains government insurance protection, they added.

Here’s what to know about the rise of high-yield savings accounts, and how to decide whether to open one:

What is a high yield savings account?

Financial institutions have not settled on what exactly constitutes a high-yield savings account, experts said. But the name indicates the key characteristics of this financial product: a savings account that delivers high returns.

While no specific threshold earns an account the moniker of “high-yield,” the enhanced savings from such accounts can prove substantial, experts said.

The average yield for a savings account is 0.24% annual percentage yield, meaning that a typical customer earns a fraction of a percentage point of interest each year for his or her savings deposit, according to Bankrate.com data from last week.

High-yield savings accounts, however, offer customers as much as 5% annual percentage yield, Mark Hamrick, Washington bureau chief and senior economic analyst for Bankrate.com, told ABC News.

“Over a prolonged period of time, it can make a huge difference,” Hamrick said.

For instance, a high-yield saving account that holds $10,000 could return as much as $500 per year. However, if a customer deposits the same amount in a bank account yielding 0.25% each, he or she stands to see just $25 in annual return, Hamrick said.

Instead of seeking out high-yield savings accounts at brick-and-mortar banks with household names or local branches, customers will more often find them at online banks, Christine Benz, the director of personal finance at Morningstar, told ABC News.

Online banks face lower expenses, since they aren’t paying for a commercial space or local bank employees, Benz said.

“Online banks are able to offer more competitive, better yields,” Benz said.

Why are high-yield savings accounts on the rise?

High-yield savings accounts have grown in popularity amid a string of rate hikes from the Fed that have allowed some banks to offer attractive returns and damaged the performance of alternative financial vehicles like the stock market, experts said.

“We’ve seen a huge rise,” Hamrick said.

Over the last year, the Fed has raised interest rates at a breakneck pace not seen since the 1980s.

The interest rate hikes make it more lucrative for banks to hold money, which in turn puts pressure on financial institutions to pass along some of those earnings to depositors through higher yields.

As a result, some banks have bid up each other’s yield offerings to attract customers, Hamrick said.

“They’ve got to be competitive with their rivals,” Hamrick said.

Meanwhile, high interest rates have pummeled some alternative investment options, like stocks. The S&P 500 has dropped about 3% over the past year, though it has surged in recent months.

“A savings account is pretty safe money right now,” Hamrick said.

What are the downsides of a high-yield savings account?

A major drawback of a high-yield savings account stems from the unpredictability of its yield, which shifts in rough correlation with the interest rate environment, Benz said.

If the Fed decides to reverse its rate policy and start bringing down borrowing costs, the high-yield accounts would likely suffer.

“With any type of savings account, the interest rate will vary significantly on an ongoing basis,” Benz said.

Moreover, personal finance experts cautioned that customers should make sure that a given high-yield account falls under government insurance protection, especially in light of recent tumult in the financial system.

The Federal Deposit Insurance Corporation, or FDIC, which safeguards the stability of the financial system, protects depositors at all FDIC-insured banks for up to $250,000 in funds for each different type of account held.

Nearly every bank is FDIC insured, and the vast majority of accounts fall below the $250,000 threshold.

Insurance also covers balances held with the high-yield savings account offered by Apple through its partnership with Goldman Sachs, Apple said.

Meanwhile, high-yield savings accounts often require a minimum deposit size for customers to qualify for the strong returns, Benz said.

“Relate that to your own expectations of how you’ll use the funds or the account,” she said.

“If you’re thinking of it as a checking alternative and don’t think you’ll be able to maintain the minimum balance, you won’t be able to maintain that full yield,” she added.

Copyright © 2023, ABC Audio. All rights reserved.

(WASHINGTON) — The Department of Justice has joined an investigation led by the Department of Transportation into Southwest Airlines’ meltdown in December — when the company canceled more than 16,000 flights over an 11-day period — a DOT spokesperson said.

The DOT’s probe is looking into “whether Southwest engaged in unrealistic flight scheduling which is illegal under federal law and whether Southwest Airlines provided timely refunds and reimbursements to affected passengers as required,” the agency spokesperson said in a statement.

“The DOT team … is also closely coordinating with DOJ and FAA,” the spokesperson said.

In a statement, Southwest said it has not received any inquiries yet from the DOJ but is ready to cooperate with the government agencies.

Southwest’s extensive cancellations left thousands of passengers stranded as a result of severe winter storms, staffing shortages and technology issues.

The airline said the breakdown cost more than $800 million in revenue in the fourth quarter of 2022.

At the time, Southwest’s CEO Bob Jordan apologized for the chaos during an interview with ABC News, saying, “This has impacted so many people, so many customers over the holidays, it’s impacted our employees and I’m extremely sorry for that. There’s just no way, almost, to apologize enough.”

In January, the DOT announced that it was investigating and in a February hearing, the company’s COO, Andrew Watterson, addressed the cancellations before the Senate Commerce Committee.

“Let me be clear: We messed up,” Watterson said. “In hindsight, we did not have enough winter operational resilience.”

In March, Southwest unveiled a three-part plan to boost the airline’s operational resiliency in the face of future challenges.

But problems have persisted: Last week, Southwest planes were briefly grounded nationwide and more than 2,000 flights were delayed as a result of a technical issue with an internal system.

“This is another demonstration that Southwest Airlines needs to upgrade their systems and stop the negative impacts to individual travelers,” Washington Sen. Maria Cantwell, chair of the Senate Committee on Commerce, Science and Transportation, said in a statement at the time.

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(NEW YORK) — Twitter reversed a major change to its subscription policy over the weekend by reverifying some legacy accounts, including ones belonging to dead celebrities like Michael Jackson and Kobe Bryant.

The Elon Musk-owned social media platform last week removed blue checkmark verification from its legacy users as part of revamp of Twitter Blue, a subscription service that grants purchasers the site’s signature checkmark and additional posting capabilities.

However, the company appeared to return the verification checkmark for some popular accounts over the weekend, eliciting outcry from some widely followed users who clarified that they had not paid for the service.

In addition, Twitter appeared to reverify accounts for some dead celebrities, including Anthony Bourdain, Chadwick Boseman and Norm Macdonald, among others.

It was not immediately known whether Twitter reverified the accounts or individuals operating the accounts on behalf of the deceased figures had subscribed to Twitter Blue.

Twitter did not immediately respond to ABC News’ request for comment.

Musk, the CEO of Tesla and SpaceX, said that he personally paid for subscriptions for accounts belonging to basketball star Lebron James, actor William Shatner and author Steven King. In a tweet, King called on Musk to “give my blue check to charity.”

James received an email from a Twitter employee informing him that Musk had paid for a complimentary subscription but James did not respond to the email, the Verge reported.

Chrissy Teigen, a model with nearly 13 million Twitter followers, reacted to the return of some legacy verification check marks in a tweet: “wait I’m crying they’re giving them for punishment now.”

Teigen, like some other celebrities, appeared to remove the check mark by briefly altering their Twitter handles, the usernames anchored to their accounts.

Previously, Twitter verified celebrities, politicians, journalists and prominent figures on a case-by-case basis in an effort to authenticate their identities and prevent impersonation.

Under Twitter’s new subscription service, users gain access to account verification for an $8 monthly fee, which amounts to $96 per year.

“Until now, Twitter used the blue checkmark to indicate active, notable, and authentic accounts of public interest,” the company said on its website.

Twitter delayed by a few days the initial release of a revamped Twitter Blue in November over concerns about impostor accounts posing as prominent figures or organizations.

To address impostors, Musk said the site would permanently suspend users who attempt to impersonate others, unless the speech is clearly marked as parody.

The reversal of the subscription policy change for some legacy users marks the latest shift at Twitter since Musk acquired the company in October for $44 billion.

Days after Musk purchased Twitter, the company began layoffs that ultimately cut roughly 75% of its 7,500-person workforce, raising concerns about Twitter’s capacity to maintain its platform.

Twitter suffered a user outage in February that lasted for hours and required an emergency fix, prompting an apology from the company.

The outage came hours after Twitter announced that subscribers to Twitter Blue would be permitted to post longer messages than other users.

For his part, Musk has defended his actions at Twitter as part of an aggressive effort to rescue the company from financial peril, which he described in a Twitter Spaces interview in December as an “emergency fire drill.”

“That’s the reason for my actions,” he added. “They may seem sometimes spurious or odd or whatever.”

The policy change over legacy verification came during a difficult week for Musk, who watched on Thursday as a SpaceX rocket Starship exploded minutes after takeoff.

Still, Musk congratulated the workers behind the rocket launch and vowed to try again later this year.

“Learned a lot for next test launch in a few months,” Musk tweeted.

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(NEW YORK) — Bed Bath & Beyond filed on Sunday for Chapter 11 bankruptcy.

The company’s 360 stores — along with its 120 buybuy BABY stores — are expected to remain open as the retailer begins its bankruptcy restructuring, according to a statement released Sunday. Online sales are also expected to continue.

Sue Gove, president & CEO, said the company would work “diligently to maximize value for the benefit of all stakeholders.”

“We deeply appreciate our associates, customers, partners, and the communities we serve, and we remain steadfastly determined to serve them throughout this process,” Gove said.

In a filing in U.S. Bankruptcy Court in the District of New Jersey, the company said its liabilities totalled more than $1 billion. The company said in a release it had secured financing of $240 million from Sixth Street Specialty Lending to support its operations during the turnaround process.

The New Jersey-based company listed debt, including long-term liabilities, totalling about $5.2 billion in its most recent quarterly filing with the Securities and Exchange Commission. Its assets were about $4.4 billion, including about $153 million in cash or equivalents.

ABC News’ Darren Reynolds contributed to this story.

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