July Edition
Welcome to the July edition of our newsletter, your go-to source for insights, updates, and news from the world of lending and financial services.
This month, financial institutions celebrate a potential halt to debit card interchange tweaks and welcome lowering price pressures, but it's not all upside. Elsewhere, the Treasury market is coming under scrutiny, middle-class consumers continue to feel the crunch, and financial wellness programs may be missing the mark.
Can traditional lending products still drive growth?
Never mind the latest AI-driven fintech... In this 22 Minutes in Lending episode, Richard Wada, shares his thoughts on how traditional lending products that focus on financial wellbeing can increase membership - particular with younger generations - and drive growth.
Bank's mission-driven approach thrives amid adversity
With no immediate ease expected on liquidity challenges, many financial institutions are focusing on keeping the powder dry - but is it the time to be brave? One banking leader believes there’s always opportunity in adversity and has the track record to prove it.
Are you ready to learn from the best?
In this on-demand webinar, gain valuable insights from industry leaders Kara Van Wert of Veridian Credit Union and Margie Click of Agriculture Federal Credit Union (AgFed).
Discover key strategies for student loan refinancing, home improvement lending programs, cross-selling tactics, and effectively engaging younger members.
Industry Insights
Liquidity management
Turbulent Treasury market keeps analysts on their toes
Just a few days after JPMorgan Chase analysts claimed the U.S. Treasury market was more robust than traders feared, more signs of liquidity stress were on display, leading several high-profile market leaders to publicly voice their concerns over the market's security. Read more.
Summer sizzles for market bearers
Despite numerous signs of market weakness, however, ample liquidity continues to support stock prices, frustrating bearish investors. Key indicators like the NYSE Advance-Decline line and low credit spreads show that liquidity remains robust, suggesting that major market indexes will likely stay elevated through the summer, making it a tough season for market bears. Read more.
Price pressures ease, may lead to Fed action
A report issued by the Commerce Department in late June showed an overall decline in price pressures, April through May, with so-called "core inflation" rising just 0.1% through the month—the lowest such increase in four years. There's a creeping sense of optimism that if this trend continues, the Fed may yet cut rates over the next quarter. Read more.
PwC: Basel III Endgame (B3E) would harm GDP, lower lending
The enhanced capital requirements legislated under B3E would stymie market growth and hurt consumers, according to new research published by Pricewaterhouse Coopers. Banks have another year to interpret the rules, which were announced in July 2023, and implement changes. Read more.
Economy and regulation
Supreme Court shakes up IRS authority
The U.S. Supreme Court has overturned the Chevron doctrine, a key principle that allowed federal agencies like the IRS to interpret ambiguous laws. This landmark decision could lead to increased legal challenges to IRS rulings and require more explicit legislation from Congress, potentially complicating tax compliance and enforcement for consumers and businesses. Read more.
Potential halt to Debit Interchange proposal
Detractors of a contentious Fed proposal that could significantly reduce debit card interchange fees welcomed the introduction of the Secure Payments Act last month; a bill penned by Senator Ted Budd (R-NC) that would require the Fed's Board of Governors to conduct an exhaustive review of the interchange bill's impact on consumers and the broader economy. The Secure Payments Act received resounding endorsement from across the credit union system and banking industries. Read more.
Technology
Microsoft alert: AI security flaw could impact online safety
Microsoft has uncovered a critical AI security flaw that could jeopardize e-commerce and financial services, potentially allowing cybercriminals to access sensitive data. Read more.
Credit unions are thriving with virtual branches
Credit union executives reveal their strategies for successfully building and operating virtual branches. By leveraging advanced digital tools and maintaining a strong focus on customer service, these leaders have managed to expand their reach and enhance member engagement. Read more.
Apple exits BNPL market
Less than 12 months since its launch, Apple Pay Later—the tech giant's in-house Buy Now, Pay Later play—is no more. The service was abruptly shut down in mid-June, in preparation for updates to the Apple Pay platform later this year. At that time, users will be able to make purchases and access installment loan options through Affirm. Read more.
Robots to the rescue
AI-powered smart finance and robotic process automation (RPA) apps are on the rise, bringing efficiency and accuracy to financial operations. These cutting-edge technologies streamline everything from data entry to complex analytics, helping financial institutions reduce costs and enhance customer service. As adoption grows, the financial industry is set for a high-tech makeover. Read more.
Consumer Insights
Employees speak out: Workplace financial wellness programs miss the mark
Employers are increasingly investing in workplace financial wellness programs, but multiple reports demonstrate a disconnect between what they offer and what employees actually want or need. While companies focus on retirement planning and financial education, employees are seeking more immediate, personalized support such as student loan repayment assistance and debt management tools. Read more.
Credit Card debt woes continue
A new report from PYMNTS shows two-thirds of consumers who are already financially struggling are trapped in a cycle of revolving credit card debt. This persistent debt issue highlights the need for better financial education and support to help individuals manage their finances more effectively and avoid the pitfalls of high-interest credit. Read more.
Middle-class money crunch sound familiar? Let’s unpack
Deloitte insights reveal emerging financial stress among middle-class Americans despite overall stable financial well-being sentiment. The data shows a divergence in financial confidence across income groups, with middle-income consumers expressing concerns about their ability to meet financial obligations and a focus on saving over discretionary spending. Read more.
Is cash dead?
Cash transactions are rapidly declining worldwide as digital payments gain popularity. With the convenience of contactless and mobile payments, consumers and businesses increasingly favor electronic methods over traditional cash. This shift is transforming how financial institutions handle money, impacting everything from daily purchases to financial security. Read more.