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Exception Tracking Spreadsheet (TicklerTrax™)
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Top Story Lending Related

07/16/2021

Fed report on credit card operations profitability

The Federal Reserve Board has submitted its July 2021 Report to the Congress on the Profitability of Credit Card Operations of Depository Institutions, which analyzes the profitability over time of depository institutions' credit card activities by examining the performance of larger institutions that specialize in such activities and of a sample of smaller commercial banks that offer a range of credit services. The report also reviews trends in credit card pricing, including changes in interest rates.

The report is mandated by section 8 of the Fair Credit and Charge Card Disclosure Act of 1988. The analysis in the report is based largely on information from the Call Reports and quarterly reports of credit card plans on from FR 2835a. The July 2021 report is based on reported data through December 31, 2020.

07/15/2021

LendingClub pays $18M to settle FTC charges

The Federal Trade Commission has announced that online lender LendingClub Corporation has agreed to pay $18 million to settle charges that the company deceived consumers about hidden fees that it charged and about whether their loan applications were approved. The settlement also bars LendingClub from making misrepresentations to loan applicants and requires that the company clearly and conspicuously disclose the amount of any prepaid, up-front, or origination fee and the total amount of funds that borrowers will receive.

The Commission charged in April 2018 that the company falsely promised loan applicants that they would receive a specific loan amount with “no hidden fees,” when in reality the company deducted hundreds or even thousands of dollars in hidden up-front fees from the loans. The FTC also alleged that LendingClub told consumers they were approved for loans when they were not, and took money from consumers’ bank accounts without authorization.

07/15/2021

FFIEC posts 2021 Median Family Income report

The FFIEC's 2021 Median Family Income (MFI) Report has been posted.

07/14/2021

CFPB report on consumer credit during pandemic

The CFPB has posted "Trends in Reported Assistance on Consumers' Credit Records," the second article in a series documenting trends in consumer credit outcomes during the COVID-19 pandemic.

The article focuses on reported assistance on consumers’ credit records. For purposes of this analysis, authors Corinne Candilis and Ryan Sandler define consumer assistance as an account being reported with zero scheduled payment due despite a positive balance. In the June 16, 2021, article, Candilis and Sandler found that most credit products saw a sharp uptick in assistance in March 2020 and an uptick in transitions out of assistance between April and June. Since July 2020, consumers have transitioned out of assistance to varying degrees across all credit products, but a significant share of mortgage borrowers continue to receive assistance.

With the exception of student loans, the total share of loans with payment assistance began declining in the summer of 2020, as the initial increase in loans transitioning into assistance abated and accounts began transitioning out of assistance in larger numbers. There continued to be high rates of assistance in student loans largely due to the CARES Act, which put most student loans in automatic payment suspension. By March of 2021, the total share of auto loans and credit card accounts with assistance was only slightly above pre-pandemic levels, while the share of mortgages and student loans on assistance remains significantly higher than pre-pandemic baselines.

Candilis and Sandler also observed that consumers who exited assistance tend to live in communities hit harder by the pandemic.

07/14/2021

Fed releases Discount Rate meetings minutes

The Federal Reserve Board has released the minutes of its interest rate meetings from May 17 through June 16, 2021.

07/14/2021

Agencies propose risk management guidance for 3rd-party relationships

The federal bank regulatory agencies (Board of Governors, FDIC, and OCC) on Tuesday requested public comment on proposed guidance designed to help banking organizations manage risks associated with third-party relationships, including relationships with financial technology-focused entities. The proposed guidance is intended to assist banking organizations in identifying and addressing the risks associated with third-party relationships and responds to industry feedback requesting alignment among the agencies with respect to third-party risk management guidance.

Banking organizations that engage third parties to provide products or services or to perform other activities remain responsible for ensuring that such outsourced activities are conducted in a safe and sound manner and in compliance with all applicable laws and regulations, including consumer protection laws.

Comments must be received within 60 days of the proposed guidance's publication in the Federal Register.

07/13/2021

AR holding company gets OK to acquire OK bank

The Federal Reserve Board has approved the application by First Bank Corp. of Fort Smith, Arkansas, to acquire Central Bancshares of Poteau, Inc., and indirectly acquire The Central National Bank of Poteau, both of Poteau, Oklahoma.

First Bank Corp., with consolidated assets of about $2.3 billion, controls First National Bank of Fort Smith, Fort Smith, Arkansas, with branches in Arkansas and Oklahoma, and Citizens Bank & Trust Company, Van Buren, Arkansas, with offices in Arkansas only. Central Bankshares of Poteau, Inc. has total assets of about $305.7 million. Central National Bank of Poteau has branches in Oklahoma only.

07/13/2021

CFPB hits fintech GreenSky with $11.9M consent order

The CFPB announced Monday it had taken action against GreenSky LLC, a fintech non-bank institution in Atlanta, Georgia, for enabling contractors and other merchants to take out loans on behalf of thousands of consumers who did not request or authorize them. The CFPB issued a consent order against GreenSky requiring the company to refund or cancel up to $9 million in loans for customers harmed by its illegal conduct, pay a $2.5 million civil penalty, and implement new procedures to prevent future fraudulent loans.

GreenSky used merchants, primarily those providing home improvements, to promote and offer financing to customers before making on-the-spot lending decisions based on criteria provided by its partner banks. Proceeds from GreenSky’s loans, ranging from a few thousand to tens of thousands of dollars, bypass consumers and are disbursed directly to merchants following the merchants’ application for payment. Some consumers complained that they never applied for a loan or even heard of GreenSky before receiving billing statements, collection letters, and calls from the company.

The CFPB found that GreenSky engaged in unfair practices against their customers in violation of the Consumer Financial Protection Act of 2010 (CFPA). For additional details and a link to the CFPB's consent order, see "GreenSky pays $11.9 million for unauthorized consumer loans," in BankersOnline's Penalty pages.

07/09/2021

National SBIR Week to be hosted by SBA

The Small Business Administration will host the 2021 National SBIR (Small Business Innovation Research) Week July 14 – July 23 for small business innovators. The virtual event will connect entrepreneurs working on advanced technology to the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, which represent the nation’s largest source of early-stage research and development funding for small businesses. SBA coordinates the programs, collaborating with 11 federal agencies, that collectively supported more than $4 billion a year in federal research and development funding.

07/09/2021

Consumer credit continues upward climb

According to the July 8 release of the Federal Reserve's G.19 Consumer Credit data report, consumer credit increased in May at a seasonally adjusted annual rate of 10 percent. Revolving credit increased at an annual rate of 11.4 percent, while nonrevolving credit increased at an annual rate of 9.5 percent.

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