It’s a strange time for mid-sized banks in the US. The collapse of three regional banks earlier this year followed by the emergency merger of PacWest and Banc of California last week has created a shakeup in the industry that’s been exacerbated by the Federal Reserve’s continued efforts to raise interest rates. Another small bank failed Friday. Heartland Tri-State Bank of Elkhart, Kansas, was wound up by the Federal Deposit Insurance Corporation. Its four branches will reopen Monday as part of Dream First Bank under a deal that will see it buy most of its failed rivals assets. But executives at the US arm of Spain’s Santander\n \n (SC), the 30th largest bank in America according to the Fed, with more than $105 billion in consolidated assets, don’t appear to be worried. Santander\n \n (SC) US CEO Tim Wennes told Before the Bell that confidence among customers remains high. Santander recently released a quarterly survey of about 2,250 middle-income bank and financial services customers (defined as having household incomes between $47,000 and $142,000.) “We started this survey because there were a lot of mixed economic signals out there,” said Wennes. “The majority of our clients here in the United States are middle-income households, and we want to understand how inflation is impacting them, how higher auto prices are impacting them, how they’re thinking about their behaviors and payments,” he said. The survey found that nearly 80% of households said they weren’t impacted by the recent banking crisis and had not changed their financial behavior because of the recent failures. Only 5% of those surveyed said they changed banking providers because of the turmoil. Santander also found that 68% of responders said they were on track to achieve financial prosperity and that 79% thought it would happen in the next 10 years. The bank defined prosperity as “thriving financially, being able to cover living expenses, handle emergencies, and pursue life goals without significant tradeoffs.” Before the Bell spoke to Wennes about these results, the resiliency of the US consumer and the future for regional banks. Before the Bell: Is there a difference between consumer confidence and people thinking they’re on the path to financial prosperity? Is this a difference between having savings versus spending money? Tim Wennes: What we see in the survey is that inflation is taking a bite out of consumers’ wallets, and the majority of consumers are adjusting how they’re spending money because inflation is their number one worry. At the same time, consumers are resilient and hopeful. So when we ask them these questions about prosperity, whether they’re on the right track, the answers are overwhelmingly yes. A lot of people surveyed think they’ll become financially prosperous within the next 10 years. But when we look at the short term, that number decreases a bit. Is there a mental disconnect there? People believe they’re making the right choices. Some of them are insecure, clearly. But consumers are still confident in their bank and in the banking industry but also taking advantage of this current interest rate scenario. So the upside of what’s happened with interest rates is for those that have deposits, some savings and investments can now be earning a much higher risk-free return on that. Higher than they’ve seen in the last 15 years. Why aren’t more people moving into high-yield accounts? I think it’s inertia. People are comfortable with what they’ve got and so they don’t take action. But as time passes there comes more awareness, and we’ll see more customers move to take advantage of that. I think that the barriers to changing accounts are also going down. That makes it easier for customers to either open new accounts or to make changes to the type of account that they have. Were you surprised that confidence in banking remains high after the recent regional banking crisis? I was not surprised, it mirrors what we’ve seen with our customers. The foundation of banking is built on trust and confidence, and that’s driven by relationships and communication. Customers have been stable and we’ve been communicating very frequently to make sure that they’ve got the latest information. In your survey, 73% of those concerned about inflation say that they haven’t been able to save as much, which is up from the previous quarter, and 68% say that they’ve made significant cuts to adjust for inflation. That’s also up over last quarter. Is inflation also cutting into savings? I think people are thinking about their immediate situation versus their outlook for the future. It gets back to resiliency for consumers. They have the view that they can make the adjustments they need to make in order to be prosperous in the future. We’re also seeing reasonable wage growth, and we’ve got very strong employment levels. There is reason for people to be confident. People are also seeing inflation come down and they’re optimistic about that. Two thirds of the economy is driven by the consumer. And what we’ve seen here over the past two years is that the consumer remains remarkably resilient and remarkably confident. Tupperware shares were up 165% last week The meme traders are back. Shares of Tupperware\n \n (TUP) exploded by about 165% last week and more than 300% over the last month for no discernible reason. The Florida-based container company has been in hot water for some time. Sales are on the decline and Tupperware even warned in April that it was on the brink of bankruptcy. In early June, the New York Stock Exchange even notified Tupperware that it was in noncompliance with the exchange’s rules because its market capitalization was too low, less than $50 million, over a period of 30 trading days. Tupperware’s average closing price, the notification said, was also less than $1 for that period — below the exchange’s threshold. In early July, BlackRock stepped in as an investment partner to Tupperware, possibly to help them manage their debt load. But no new material announcements or changes have been made since then. The surge in stock price would make some sense if there were any indication that the company had begun a turnaround or found an eligible buyer. But there’s no evidence that either of those things has happened. There are, however, posts on Reddit that could offer an explanation. “YEESH,” wrote one user about the company’s outlook. “Still threw $3,000 at it. Did the same with [Bed Bath & Beyond] last summer. As long as I’m not playing with too much and have a stop loss I’m ok with losing a few hundred dollars for a chance to moon again.” “This will be the next big short squeeze, I went all in yesterday,” commented another. On Thursday, the trading volume for Tupperware was three times higher than the prior 30-day average, according to FactSet. Like GameStop and movie theater chain AMC previously, it appears Redditors are trying to send the 77-year-old struggling business “to the moon.” Also like other meme stocks, shares of Tupperware have been highly shorted. That means a lot of traders are betting that the stock has further to fall. Before you join the “Tupperware party,” remember that meme stocks tend to be very volatile, with sweeping highs and lows. Libra Investment Services warned on Friday that investors in Tupperware face a high risk of loss. Tupperware shares are still down nearly 30% year to date. Illegal child labor is on the rise in a tight job market US child labor violations have jumped in recent years. Some well-known companies, consumer-facing name brands, have been caught employing children for grueling work in dangerous conditions. A tight labor market has prompted many employers to search for the cheapest available labor; state legislators are even pushing bills that would limit legal protections for underage workers. Now, the Department of Labor has announced actions it’s taken so far this year through a new interagency task force on child labor. “Child labor is an issue that gets to the heart of who we are as a country and who we want to be,” said Acting Secretary of Labor Julie Su in a news release Thursday. “Like the President, we believe that any child working in a dangerous or hazardous environment is one child too many.” In many of these cases, it’s the children of recent migrants working long hours in difficult conditions, said Jordan Barab, deputy assistant secretary at the Occupational Safety and Health Administration during the Obama administration. “You’re piling vulnerable on top of vulnerable here,” Barab added. Between October 1, 2022, and July 20, 2023, the Department of Labor concluded 765 child labor cases, found 4,474 children employed in violation of federal child labor laws and assessed more than $6.6 million in penalties against employers, the agency announced on Thursday. That’s a 44% increase in the number of children illegally employed and an 87% increase in penalties compared to the same period the year before, according to the Labor Department. In addition, the Wage and Hour Division of the Labor Department is currently pursuing more than 700 open child labor cases. Read more here.