Consumer lending

Executives of the regional bank say they are zeroing in on its most profitable business lines and moving away from one-off customer relationships that don't generate as much revenue.

The Cincinnati bank said that it plans to reduce originations in the segment by 15%. It is leaning into businesses that provide an opportunity to build deeper customer relationships.

Several community banks noted an uptick in problem loans in second-quarter earnings reports. Small lenders should brace for more of this, industry observers noted.

Some credit unions and banks are taking a step back from the U.S. auto lending market, but Ally CEO Jeffrey Brown said the overall sector remains healthy. Though credit is weakening, the loans that the company is making are bringing large returns.

U.S. regulators are examining how consumers finance health care spending, looking at practices used by Synchrony Financial's CareCredit unit and its competitors. But Synchrony CEO Brian Doubles said he's "very proud" of CareCredit, while downplaying the unit's involvement in the medical sector.

Higher interest rates and larger card balances set the stage for an 11% jump in revenue from U.S. personal banking in the second quarter. That blunted the impact of a 78% surge in write-offs tied to consumer loans.

The lawsuit against Prehired involves a relatively new product that consumer advocates say is akin to a student loan — and should be subject to far more protections.

Ally, Truist, Citizens and SoFi are among the banks that offer student loan repayment benefits. The recent Supreme Court decision striking down President Biden's loan forgiveness plan could give a leg up to companies that provide such assistance to their employees.

Leigh Brady recently took over as chief executive of SECU, the second-largest credit union in the U.S. Don't look for any mergers under her leadership, Brady said, but she will focus on branch expansion and improving SECU's use of technology.

High interest rates could dampen demand for refinancing, which took a hit during the pandemic-era pause in federal student loan payments. "Curb your enthusiasm," one analyst said.

Adjusted for inflation, consumer spending has largely stalled after surging at the start of the year. Delinquency rates, meanwhile, are ticking up. 

New regulations on small-dollar lending are leaving consumers with few viable options when they need emergency access to cash.

Twenty lenders from across the country are participating in Underwriting for Racial Justice, a collaborative effort to develop new criteria that will enable marginalized borrowers to gain access to credit.

The Consumer Financial Protection Bureau, the Treasury Department and the Department of Health and Human Services released a request for comment on medical debt financing products. At the same time, the White House said that the agencies will explore whether efforts to sign up customers are breaking the law.

Bonds backed by car loans made by U.S. Auto Sales and American Car Center, two used-car dealers that shut their doors earlier this year, have been veering into distress in recent weeks. Meanwhile, borrowers have been falling behind on payments.

As President Biden tries to revive a key campaign promise to provide widespread debt relief to student-loan borrowers after a Supreme Court setback, legal experts warn that he's likely to encounter a fresh wave of lawsuits challenging his authority to act without congressional approval.

The Supreme Court's decision to strike down billions in debt forgiveness could make it harder for millions of Americans to pay back other kinds of debt. It also threatens to further curtail lending in an already sluggish credit market.

Sen. Elizabeth Warren, D-Mass., in a letter to the Consumer Financial Protection Bureau, challenged the idea that credit card late fees serve as a deterrent to delinquency, instead saying issuers told her office that some of them earn tens of millions of dollars collecting late fees.

The regional bank is expected to issue around three to five more bonds backed by its $11.5 billion loan book. Citizens earlier this month said it will halt new auto lending in partnership with dealers starting July 1.

The legislation would have allowed nonbank lenders to charge more for consumer installment loans. Gov. Ron DeSantis, a Republican presidential candidate, explained his veto by saying that the bill might result in additional consumer indebtedness.