Consumer lending

The digital-only bank has adopted machine learning to process loans faster, more accurately and with better fraud detection than in the past.

More than a year into the pandemic, with the U.S. economy improving and consumers having paid down debt, bankers are finally loosening the reins in auto lending and credit cards.

Cordray, named this week to lead the Education Department's office of federal student aid, cracked down on banks, student loan servicers and for-profit colleges when he was director of the Consumer Financial Protection Bureau.

The online lender was not a party to the lawsuit involving the Federal Trade Commission and a payday lender, but it could emerge as one of the big winners from the Supreme Court’s decision.

Some say Equifax, Experian and TransUnion are too slow to investigate grievances, prompting more complaints to the Consumer Financial Protection Bureau. But the big three say other forces are at work.

Looming defaults and the potential for heavier regulatory scrutiny have prompted banks to pull back from the sector. Is that a good thing?

The company’s retail banking and auto-lending businesses in the U.S. generated a larger share of overall profits in the first quarter, and Executive Chairman Ana Botín and other executives unveiled expansion plans for both units.

The company, which recently acquired Radius Bancorp, still expects to lose at least $142 million this year and CEO Scott Sanborn did not provide a timeline for profitability. “We’re building this business for the long term,” he said.

Banks could be a better option than payday lenders to meet consumers’ short-term credit needs. But all the OCC’s regulation does is enable partnerships that circumvent state usury laws.

Consumer advocates say "income share agreements" like those issued by Blue Ridge Bank of Martinsville, Va., and a Boston CDFI should have to comply with laws that govern more traditional credit products.