Credit

For the fourth straight quarter, the nation's largest bank boosted its loan-loss reserves, this time setting aside $1.4 billion to cover potentially souring loans. Other big banks made similar moves as the industry braces for a potential recession.

The acting comptroller of the currency said new CECL standards will help banks weather current economic uncertainty. He also touted the benefits of diversity in risk management.

During the third quarter, the industry braced for a potential recession by making it harder for borrowers to access credit, according to a new Federal Reserve survey. Bankers indicated that they are ready to take stronger action in a downturn that many of them now see as likely.

Executives from PNC, Regions and M&T are expressing confidence that their loan books can withstand a recession. "We don't see crisis-type things in front of us right now," said PNC Chief Financial Officer Robert Reilly.

Credit bureaus should know better than to include "impossible" data, such as someone defaulting on a loan before they were born, says Consumer Financial Protection Bureau Director Rohit Chopra.

Overdue loans for U.S. credit unions hit 0.42% in June — the lowest level in the industry's history. But some warn of deteriorating credit quality as the economy sours.

Executives at the Dallas company said they feel positive about the remainder of the year, though declining deposits could create issues going forward.

The megabank set aside a larger provision for credit losses during the third quarter as delinquency rates in its credit-card business ticked higher. Still, executives argued that the U.S. consumer outlook remains strong.

The nation's largest bank by assets cited a weakening economic outlook as one reason it added to its allowance for loan losses for the third straight quarter. But its third-quarter results beat analysts' expectations.

The London bank is working with Nova Credit to accept immigrants' credit histories from their home countries. It also invested $10 million in the company.

Millions of Americans have trouble accessing low-cost loans because they have thin or problematic credit histories. That could change as fintech innovations and new self-reporting tools give lenders troves of new data.

Late-payment rates are rising at nonbanks that lend to people with lower credit scores. "We're probably entering a stretch where you're going to see a separation between those that are relatively good underwriters and those that are not," one analyst said.

Even though delinquency rates were previously at extremely low levels, the recent uptick among poorer consumers is worth monitoring, New York Fed researchers said.

Silvio Tavares, the credit score company’s relatively new leader, is honing its models to be more inclusive, for instance by taking into account rent payment data and bank account data. 

The credit reporting agency is trying to get a CFPB lawsuit dismissed by claiming the consumer bureau didn’t sign off on a 2017 consent order for the same violations.

Kristy Kim, co-founder and CEO of TomoCredit, started out trying to help immigrants like herself access credit. With the latest funding round, she hopes to expand beyond credit cards.

The Buffalo, New York, bank flagged urban hotels and construction projects as potential sources of trouble. “But there’s nothing that’s flashing red right now that says there’s a big crisis coming,” said a top executive.

Credit quality at the largest U.S. bank by assets remains strong for now, but a top executive issued a warning about what may lie ahead.

The agency issued an advisory opinion warning that credit reporting bureaus and other entities using credit checks can no longer use disclaimers to bypass privacy protections.

The use of rent data in credit models is allowing people with low credit scores or thin credit files to get loans. But consumer advocates warn the use of that data could harm the very people it’s supposed to help.