April Edition
Welcome to the April edition of our newsletter, your go-to source for insights, updates, and news from the world of lending and financial services.
?This month, fintechs shake up the lending landscape as they take the lead in outstanding personal loan balances, while credit unions continue to navigate delinquency challenges. Regulatory shifts are also on the horizon, with debates over credit card late fees and the FDIC, OCC, and Fed trying to prevent a repeat of last spring's banking crisis.
In other news, more Americans doubt their chances of getting a mortgage refinance or car loan approval.
Credit risk trends to look out for this year
Learn about what credit risk trends you need to look for in the coming months.?
Have you heard the latest podcast episode?
In this 22 Minutes in Lending episode — the 2nd in a 3-part series — our credit union CEO panel discusses strategies for working with delinquent borrowers, regulatory considerations around debt restructuring, indirect auto lending programs, and serving immigrant communities through ITIN lending.
Industry Insights
Liquidity management
Fintechs now hold the largest outstanding personal loan balances
According to the latest TransUnion data, fintech companies have surpassed traditional lenders in holding the highest UPL balances, though fintech UPL originations remain significantly lower compared to 2022 levels. Read more.
Good news, bad news: CUs saw assets and delinquencies grow in Q4
During the fourth quarter of 2023, federally insured credit unions saw notable increases in assets and deposits, alongside a slight uptick in delinquency rates. Read more.
Economy and regulation
The junk fee saga continues...
The U.S. Chamber of Commerce and other trade groups, including the American Bankers Association, are suing to stop the CFPB's new credit card late fee rule, which would cap the fees at $8. The groups argue the cap could discourage responsible credit card use and limit consumer options, while the CFPB contends that the current fees are excessive and not proportional to issuers' actual costs. Read more.
领英推荐
IRS says income verification express will remain (for now)?
Earlier this year, the IRS announced it would stop providing tax return information via the Income Verification Express Services (IVES) starting June 24, 2024, which caused registration issues for lenders. But, on March 6, the IRS suspended this change due to concerns from IVES users, allowing more time for reconsideration. Read more.
Regulators haven't forgotten last spring
Government officials are getting ready to introduce new rules to avoid future financial crises after last year's bank runs. These could include encouraging banks to be ready to borrow from the Fed, managing some deposits differently, and changing rules on securities. Unsurprisingly, banks aren't too keen given the potential cost and effect on consumers. Read more.
Technology
Apple BNPL product to start sharing plan usage data
Apple's Buy Now, Pay Later service, Apple Pay Later, will start sharing users' plan usage data with Experian, making Apple the first major BNPL provider to directly supply loan and repayment information to a Consumer Reporting Agency. Experian says these tradelines won't impact users' credit scores... yet. Read more.
Chime enters the financial education game?
Chime, a popular online bank, teamed up with Zogo to give its users fun ways to learn about money. Users can complete lessons and quizzes to earn rewards. It's not all fun and games, though - using games to learn about money has been shown to keep people interested and help them stick with banking services. Read more.
Consumer Insights
Consumers can now finance new Teslas through their credit union...
Origence, a U.S. credit union lending technology firm, has partnered with Tesla to offer credit union financing directly on the Tesla website for EV buyers, providing options for monthly payments and competitive rates through Origence's subsidiary, FI Connect. Read more.
?...But would they get approved??
A NY Fed survey indicates more and more Americans anticipate they'd be denied a car loan or mortgage refinance if they were to apply. About 33% of respondents expressed doubts about their chances of getting approval for a refinance within the upcoming year, and nearly 32% anticipated being turned down for an auto loan. Read more.
?Consumers are, in theory, open to open banking
A new PYMNTS study shows there's a sizeable gap between those who say they'd be into open banking and those actually using it, with only 11% giving it a try despite 46% expressing interest, according to a study by PYMNTS Intelligence and Trustly. Read more.
Items of Interest
Let's solve your liquidity and lending issues!
LendKey leadership will be on-site for the NACUSO Network Conference from April 15-18 in Orlando.??
If you're heading to the event, we'll be there and would love to discuss how our network lending solutions can support your credit union.