Laura Alix

Lawmakers are working to head off a wave of pandemic-related personal credit downgrades. But there are bigger problems with how credit risk is assessed that are harder to solve.

The lender will pay $65 million in restitution and forgive nearly $500 million in auto debt to settle charges that it steered subprime borrowers into risky loans.

Often overlooked in narratives about essential workers, branch and call-center employees are responding to challenges posed by the COVID-19 crisis. They’ve processed emergency-relief loans late into the night, coached customers unfamiliar with mobile banking and made house calls to elderly account holders.

Regional and midsize banks, which continue to trail the biggest banks in digital engagement, could attract younger consumers by reaching out with more advice about financial basics, according to J.D. Power.

Funneling fees from emergency loans to feed the hungry. Supporting psychological counseling for health care heroes and financial advice for the poor. Backing retrofits of customer operations to produce protective gear for front-line medical personnel. Bankers and financial educators have tossed out the traditional playbook to help clients and communities in crisis.

The lenders are bracing for spikes in delinquencies or defaults on loans to a sector heavily punished by social distancing measures.

Queued-up loans. Extra bankers. Government tweaks to promote fairness. None of these precautionary measures has been enough for the second round of the Paycheck Protection Program to avoid the pitfalls of the first.

The pandemic won’t halt the Cincinnati bank's plan to open about 100 branches in the Southeast, but features could be added to accommodate social distancing.

Citizens, Regions and others say business investments initiated before the COVID-19 pandemic, including technology improvements and new consumer offerings, are on track.

The biggest lenders seem to have handled the corporate rush for cash heading into the economic shutdown caused by the coronavirus pandemic. But their ability to collect is as uncertain as the economic outlook for the next year.

The San Francisco bank said the amount of loans that could go into forbearance so far represents a small percentage of its total portfolio.

Soaring demand for loans from firms hard hit by the coronavirus pandemic has led to predictions that the program could soon run out of funds.

For many small providers, the coronavirus pandemic means falling revenue and rising expenses, as many either shut their doors to new business or staff up to deal with COVID-19 patients. Bankers say that means helping them bridge the cash-flow gaps until they can get back to business as usual.

The $5.9 billion-asset Liberty Bank in Middletown had set aside $5 million to make small-dollar loans to customers affected by the coronavirus pandemic.

Digital banks outscored brick-and-mortar banks in a recent J.D. Power study of customer satisfaction. However, the survey pointed to shortcomings in call center services, which are in high demand during the COVID-19 pandemic.

In supporting the economic recovery from the coronavirus pandemic, lenders have a chance to restore public trust damaged in the last financial crisis. But they face tough decisions on dividend cuts, executive pay, furloughs and deeper changes to their business model in the process.

JPMorgan Chase, Wells Fargo, Citigroup and U.S. Bancorp, along with 200 state-chartered banks and credit unions, have agreed to let borrowers skip payments for 90 days if their finances have been upended by the pandemic.

Many banks are offering low-interest loans to help consumers and small businesses withstand the economic shocks of the pandemic. Some are also doing away with ATM, overdraft and late fees because, as one CEO put it, that revenue “is not the most important thing right now.”

The regulation issued late on Tuesday directs state-regulated financial institutions to give mortgage borrowers at least 90 days of forbearance if they can show financial hardship resulting from the coronavirus pandemic. It also requires banks and credit unions to provide relief on ATM fees and credit card late payment fees.

From paying $1,000 bonuses to branch employees to subsidizing child care expenses, banks are offering a slew of new perks for front-line employees still working and more paid leave for those who are ill or caring for sick family members.