March Edition
Welcome to the March edition of our newsletter, your go-to source for insights, updates, and news from the world of lending and financial services.
This month, AI could revolutionize small business lending, and rising food prices have Americans feeling pessimistic about the economy. A CFPB report finds that large banks charge higher credit card interest rates than small banks and credit unions.
Elsewhere, Apple Card reaches 12 million users, affluent earners are still living paycheck to paycheck, and the US Federal Trade Commission releases staggering fraud numbers for 2023.
Have you heard the latest podcast episode?
In this 22 Minutes in Lending episode, Navy Federal's Brian Creagh, SVP of Credit Card and Education Lending, talks about serving member needs across their financial lifecycle, education loans, establishing trust with members and growth opportunities.
Discover the low-hanging solution to long-term growth.
After the financial turbulence of the last two years, and with little respite in sight, there may be no “normal” to return to. What better time to test new deposit strategies?
Industry Insights
Liquidity management
Artificial intelligence could revolutionize lending for small businesses
Financial institutions, including fintechs, are using AI and machine learning to automate lending decisions and enhance efficiency and access to credit, according to a white paper commissioned by Uplinq. Read more.
Lenders can support consumers in managing debt and delinquencies
Increasing numbers of late payments on consumer loans suggest worsening financial well-being for borrowers, which has prompted credit unions and lenders to find ways — like flexible payment options and protection insurance — to help consumers handle debt and avoid defaults. Read more.
Economy and regulation
Fed Vice Chair calls for supervision with speed, force, and agility
Federal Reserve Vice Chair for Supervision Michael S. Barr reflected on the failure of Silicon Valley Bank (SVB) and emphasized the need to improve the speed, force, and agility of bank supervision, following a thorough review of SVB's collapse and the subsequent identification of weaknesses in risk management and supervisory practices. Read more.
In other Fed news, Jerome Powell suggests that cuts might be elusive
Federal Reserve Chair Powell hinted at caution regarding potential rate cuts in March, emphasizing the need for further data indicating inflation's trajectory towards the 2% target. Other Fed officials echoed sentiments of patience and the importance of additional data in recent comments on rate policy. Read more.
Technology
A BNPL option for credit card transactions
Credit unions are introducing their own versions of buy now, pay later financing, with products from organizations like PSCU and Co-op Solutions allowing consumers to split qualifying transactions from their credit card into installments after purchase, akin to bank credit card "plan it" options, offering consumers additional flexibility in managing cash flow. Read more.
Quite a milestone: Apple Card celebrates 12M users
Apple revealed that its Apple Card has over 12M users. Over 200,000 initially declined applicants were later approved via Apple's "Path to Apple Card" program. Despite challenges, like gender discrimination allegations (which have since been cleared), Apple's high-yield savings feature amassed about $10B in deposits. Read more.
Prizeout launches cash-back products for credit unions
Prizeout rolled out CashBack+, which lets credit unions provide cash-back perks to members, integrating with online banking systems and offering a digital marketplace for brands. The product is already live with several credit unions and banks. Read more.
Consumer Insights
Rising food prices have Americans feeling pessimistic about the economy
Americans are spending more money on food than they have in 30 years, with a significant chunk of their income going towards groceries and dining out. Prices are being driven by higher food prices, ongoing inflation, and increased labor costs. Read more.
Reality check: one-third of high-income earners live paycheck to paycheck
Despite being high earners, 30% of affluent consumers struggle with living paycheck to paycheck due to poor financial management habits, including inadequate savings and discretionary spending, a February PYMNTS report finds. Read more.
Boomers’ housing decisions impact Millenial and Gen Z buyers
A new Freddie Mac report found the ageing Baby Boomer generation will significantly influence the U.S. economy and housing market over the next decade, with their housing decisions expected to impact the market due to a shortage of single-family homes. Read more.
USFTC releases staggering fraud numbers for 2023
The US Federal Trade Commission received reports of scams totaling $10B in 2023, likely vastly underestimated due to many fraud victims not reporting. With a median loss of $500, this significantly impacts individuals, considering 30% of Americans are unable to cover a $400 emergency with cash. Read more.
