Consumer lending

Car loans are among the bread-and-butter products for credit unions, but slowing demand and growing delinquencies are putting some pressure on the category.

While Goldman Sachs is still pushing to make its expansion into consumer lending profitable, the bank is also weighing strategic alternatives, CEO David Solomon says. The dueling options reflect the problems that Wall Street giant faces in Main Street banking.

About 3% of borrowers in their 20s and 30s became seriously delinquent on their credit card payments last quarter, significantly faster than older consumers. The picture was similar in auto lending, according to research by the Federal Reserve Bank of New York.

A pullback by the buyers of Upstart's consumer loans led to a "challenging year," CEO Dave Girouard told analysts. But he added that the company is in "late-stage discussions" with partners that are looking to make longer-term commitments.

A federal judge in California ordered the high-cost lender CashCall to pay $134 million in restitution and a hefty fine for collecting unjust gains from consumers. He had previously ordered no restitution but was reversed by the Ninth Circuit Court of Appeals.

Regulators are bringing enforcement cases while also proposing wider changes that would alter the industry for years to come. The scrutiny covers pricing discrimination, products that make car purchases more expensive and lenders' handling of repossessions.

After soured loans rose above the private student lender's expectations in 2022, its stock price fell 16% on Thursday. One analyst wrote that "persistent credit issues have damaged management's credibility."

The subprime lender OppFi sued California's consumer protection agency last year, arguing its loans are not subject to the state's interest rate cap of 36%. State officials are asking a judge for an injunction on new loans until the broader fight is resolved.

The San Mateo, California-based online consumer lender has now laid off some 500 employees in recent months. The downsizing reflects broader challenges in the tech industry, but it also comes as Upstart struggles to get enough funding for its loans.

Rising inventories and the specter of regulation may make it seem like the pandemic auto boom is over, but broader trends could make it a profitable business if banks do it right.

Credit Acceptance Corp., a major name in subprime auto finance, is facing a legal challenge over its lending practices. Some lawyers and analysts say the company's battle with the Consumer Financial Protection Bureau has broader implications for the rest of the industry.

It is rare for banks, especially large ones, to receive unsatisfactory ratings in their Community Reinvestment Act examinations. The San Antonio bank has now done it twice in a row.

More consumers are struggling to pay their auto loans from Detroit-based Ally, but CEO Jeffrey Brown says executives "feel very good" about their preparations for a downturn. Investors appeared to like his message as its stock jumped 19%.

The state of Colorado has reached a $4 million settlement with Canvas Credit Union and Bellco Credit Union after the companies were accused of failing to pay refunds of guaranteed automobile protection fees due to borrowers.

Goldman Sachs provided more details on its pullback from its once-grand ambitions to expand into consumer finance. Though parts of that strategy will remain, the New York bank will halt its personal loan business and postpone offering a checking account for its wealth management customers.

Significantly fewer households expected to be in worse shape in the coming year than was the case last summer, according to a December survey. The results are a positive sign for banks at the start of earnings season.

Student borrowers in the U.S. are struggling to keep up with other kinds of debt even while college payments are frozen, and a surge in delinquencies is likely if the government's debt-relief plan fails, according to a new study.

Banks and other lenders revived special-purpose credit programs after racial-equity protests in 2020 prompted them to reexamine their services for historically underserved groups. Now they're taking those initiatives nationwide.

The U.S. Supreme Court expanded a planned showdown over President Biden's student-loan relief plan, saying it will hear arguments from two borrowers who contend they are being unfairly excluded from the full scope of the program.

Benefits under the Servicemembers Civil Relief Act were applied to fewer than 10% of auto loans for active-duty reserve members, the agency found. It urged financial institutions to ease the process for accessing the law's interest rate protections.