Consumer lending

Financial institutions have a checkered history with students. A credit union and bank point to the benefits of their new products.

The Consumer Financial Protection Bureau says the giant debt collector is a repeat offender that sued borrowers even when it lacked documentation about a debt. The company says it denies wrongdoing but agreed to the settlement.

The new offering will allow consumers to finance purchases of gear, parts, maintenance and fuel for ATVs, boats and motorcycles. The powersports sector has enjoyed strong growth since the early days of the pandemic.

The San Francisco fintech made its name in refinancing student loans. Now it contends that a moratorium for federal student debt payments — put in place near the start of the pandemic — has cost it at least $150 million in profits.

A new study finds that in the six months after a rate cap was imposed in Illinois, the number of subprime loans being made declined, and subprime borrowers reported a decline in their financial well-being.

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.