Consumer lending

Consumer loan balances fell in July for the first time since 2020 as banks have tightened lending standards in response to rising rates and jettisoned assets to bolster liquidity and capital levels.

Banking and credit union regulators encouraged compassionate treatment of customers in Hawaii communities hit by wildfires. They also vowed to grant expedited approvals of temporary banking facilities, be flexible in compliance matters and provide other support to financial institutions.

Consumers favor credit cards that offer better spending rewards and that card issuers should consider providing services to help their customers manage growing account balances, J.D. Power's annual survey found.

Higher interest rates and increased competitive pressure from captive finance companies cut into vehicle lending at credit unions in the second quarter.

Community bankers anticipate that interest rates could soon level off and the broader economy may avert a downturn as a result. If that forecast proves true, lenders could minimize credit losses and enjoy stronger loan demand than they had expected earlier in the year.

The deal with private equity firm KKR follows an earlier announced sale of $1.3 billion in medical office loans. The Columbus, Georgia-based company has said it's "proactively optimizing the balance sheet" to position itself for long-term growth.

Much of the industry is slimming down, with some banks calling it quits on riskier sectors and selling loans they no longer want. The trend is particularly prominent at regional banks that are preparing to comply with new capital rules.

The decision to allow lenders to review only two credit reports for mortgage applicants will harm homebuyers with less than perfect credit.

The San Francisco company's student loan business suffered from the moratorium on federal borrowers' loans. But executives see a rebound ahead despite high interest rates dampening appetite for refinancing.

The U.S. government wants to intervene in JPMorgan Chase's fraud lawsuit against Frank founder Charlie Javice, asking a federal judge to halt pretrial information exchanges until she has been tried on criminal charges.