Consumer Lending

Sallie Mae Smart Option student borrowers earn $5.5 million in rewards

Sallie Mae announced earlier this week that its Smart Option student loan customers earned more than $5.5 million back by making on-time payments through a rewards program introduced by the lender in 2010. The Sallie Mae Smart Rewards program rewards customers who make on-time payments on their loans while in school or during their six-month... Read More...

New FICO scoring model weights medical debts less heavily

FICO announced recently that an updated version of its score calculation model will no longer weigh medical debts—which, according to the Federal Reserve Board, account for half of all collections on credit records—as heavily as before. Beginning in the fall, FICO’s new score calculation model, which the company said is “more predictive... Read More...

Study: Consumers still lack understanding of overdraft fees

A study from The Pew Charitable Trusts recently showed many consumers still lack an understanding of overdraft fees, and, though the number has declined since 2012, many would rather see a transaction declined than pay an overdraft fee. Last year, bank customers reported paying total overdraft fees averaging $69—the median amount reported was... Read More...

Parents concerned about impact of student loan debt on children

A survey from Discover Student Loans recentlyshowed that while most parents consider a college education to be valuable, many are concerned about the impact of student loan debt on their children’s future. According to the third annual survey, 85 percent of parents are worried or somewhat worried that student loan debt will affect the ability... Read More...

Advocacy group launches site to recover predatory loan payments

Consumer Financial Advocates, a group aimed at helping consumers recoup money from predatory online lenders, recently launched LoanReverse.com to help facilitate the process for consumers. “Short-term, high interest rate loans have become necessary for many hard-working Americans to meet even their basic needs,” Buckley Carlson, a spokesman... Read More...

Bump in consumer lending in April driven by auto sector

Data released by credit reporting agency Equifax last week showed that an increase in consumer lending during the month of April was driven by strong growth in the automotive lending sector. "Auto lending continues to lead the recovery," Equifax Chief Economist Amy Crews Cutts said. "By any metric you consider, whether new originations, total... Read More...

Discover offers new interest rates, payment options for student loans

Discover announced on Monday new fixed and variable interest rates on new student loans—starting at 5.99 percent and 2.99 percent, respectively. For applications submitted on or after June 1, fixed interest rates will start at 5.99 percent APR for undergraduate, health professions, residency, law and bar exam and MBA and graduate loans.... Read More...

Large banks gaining on smaller institutions in relationship-based lending

A recent whitepaper released by Sageworks indicates that larger banks may have gained an edge on smaller institutions when it comes to more personalized interaction with the customer, an area considered to be an advantage traditionally held by smaller institutions. The paper pointed to a 2013 study by J.D. Power and Associates that showed gains... Read More...

Discover rewards student borrowers with cash rewards for good grades

Discover recently launched a new program that will provide undergraduate and graduate student borrowers with a cash reward for earning good grades. The program rewards students who achieve at least a 3.0 grade point average or equivalent with a cash reward equivalent to one percent of the loan amount of each new Discover loan. In order to be... Read More...

SLM Corp. splits into Sallie Mae lending, Navient servicing units

Sallie Mae—formerly SLM Corp.—announced on Thursday the completion of its separation into two companies: a consumer banking unit for education lending and a loan servicing and collection firm. “With a 40-year foundation of experience, today Sallie Mae begins anew as a bank that emphasizes responsible consumer financial practices to... Read More...

Democrats push for changes to federal student loan refund rules

A group of 23 Democratic lawmakers wrote to Department of Education Secretary Arne Duncan last week urging the department to take action against universities that encourage students to put federal student aid refunds into costly accounts. The Department of Education is currently reviewing potential changes to Title IV cash management... Read More...

CFPB report reveals issues that may default student loan borrowers

The CFPB released a report on Tuesday that revealed having a co-signer on a student loan may inadvertently allow a student loan servicer to put the borrower into default, even if payments have been made on time. According to the report, approximately 90 percent of private student loans had co-signers in 2011—a practice that may allow... Read More...

NCUA: Credit unions can provide alternative to costly payday loans

Representatives from the NCUA’s Office of Small Credit Union Initiatives and Office of Examination and Insurance told credit unions on Wednesday that the institutions can provide a viable alternative to predatory payday loans. NCUA representatives told credit unions during Wednesday’s webinar that payday loans can provide credit unions with... Read More...

NCUA to offer free small dollar lending webinar for credit unions

The National Credit Union Administration will offer a webinar for credit unions later this month on how small dollar, short-term loans to consumers can improve an institution’s portfolio. The webinar, which will be held at 2 p.m. EST on April 16, will be led by Tom Penna, Jr., an economic development specialist at NCUA’s Office of Small... Read More...

ICBA’s Jorde criticizes USPS plan to provide financial services

Terry J. Jorde, the senior executive vice president of the Independent Community Bankers of America, recently said that a proposal to provide small-dollar loans through the U.S. Postal Service “throws good money after bad.” In January, the USPS inspector general proposed providing non-bank financial services to the underbanked in a plan the... Read More...

U.K.’s credEcard launches Visa debit card for instant loan disbursement

U.K.-based e-money account and rewards provider credEcard announced on Tuesday the launch of its instant issue loan card, which will allow credit unions to issue instant loans to members through a single-use Visa debit card. The launch of the product eliminates the need for large amounts of cash and may be able to help deter members from... Read More...

“Cooling off” periods for payday loans have minimal impact on renewals

A report released by the CFPB on Tuesday showed that “cooling off” periods aimed at discouraging borrowers from taking out multiple payday loans in the same day have had little impact on rollovers and renewals. According to the report, which is based on data from more than 12 million payday loans over a one-year period, over 80 percent of... Read More...

Ohio Supreme Court rules oral agreements on loan mods not binding

The Ohio Supreme Court ruled in favor of lenders earlier this month when it said that loan modifications and their corresponding terms must be in writing and signed by all parties to make them legally binding. The ruling came following an appeal by FirstMerit—a $24.1 billion financial services firm headquartered in Akron, Ohio, operating in... Read More...

Black Knight introduces VeraStrat Scores to prioritize borrower contact

Black Knight Financial Services introduced a solution last week that will allow servicers to prioritize delinquent borrower contact to assist them in identifying and contacting the highest risk borrowers first. VeraStrat Scores is a loan-level indicator of borrower risk and historical payment pattern. It is a three-digit number, where the first... Read More...

Plan to expand PAYE student loan program may lower default risk

Fitch Ratings said last week that President Obama’s plan to expand the Pay as You Earn plan for student loan borrowers may lower default risk and boost prepayments in Federal Family Education Loan Program asset-backed security portfolios. The Pay as You Earn program—launched last year—is designed to keep monthly student loan payments... Read More...

HomeStreet to sell residential mortgages in Pacific Northwest

HomeStreet announced on Wednesday that it plans to sell two pools of residential loans in Washington, Oregon, Idaho and Hawaii. The first pool is a group of fixed-rate residential mortgages with total outstanding principal balances of approximately $105 million, and the second pool is comprised of adjustable rate residential mortgages with... Read More...

GAO unable to determine impact of Stafford loan limit increases

A report released last week by the GAO found that an increase in student loan limits and the impact of the 2008 financial crisis will make it difficult to determine whether the Stafford loan limit increases affected the cost of college. According to the report, college prices have been on the rise since the 2008 and 2009 Stafford loan limit... Read More...

NMBA to host 2014 Lenders Conference in Albuquerque

The New Mexico Bankers Association will host the 2014 Lenders Conference in Albuquerque on March 7. The conference—for which the cost of attendance is $150 for NMBA members and $300 for non-members, including meals, breaks and session materials—will begin at 8 a.m. with registration and continental breakfast. NMBA Executive Vice... Read More...

New Horizons head John Barrickman to lead TBA workshop on commercial lending

New Horizons Financial Group President John Barrickman will lecture at a two-day workshop on commercial lending techniques sponsored by the Tennessee Bankers Association from Feb. 27 to 28 at Nashville’s Loews Vanderbilt Hotel. The workshop, which is designed for loan review personnel, commercial loan officers and branch managers, allows... Read More...

Prudential Mortgage provides $15.8 billion in financing in 2013

Prudential Mortgage Capital Co. announced on Monday that it provided $15.8 billion in financing in 2013, a 30 percent increase from 2012’s $12.2 billion. The $15.8 billion in financing includes $1.2 billion for new loans in Europe and Japan, of which $848 million was originated by the London office in Europe, $2.2 billion in conventional... Read More...

GAO: Many eligible borrowers do not take advantage of SCRA protections

A new report released by the Government Accountability Office this month found that while some servicemembers benefitted from the six percent interest rate cap under the Servicemembers Civil Relief Act, many eligible borrowers did not take advantage of the protection. The SCRA seeks to protect active eligible servicemembers in the event their... Read More...

Wells Fargo and Citi sell mortgage servicing rights

Wells Fargo announced last week that its bank subsidiary signed an agreement to sell residential mortgage servicing rights on approximately 184,000 loans worth $39 billion to Ocwen Loan Servicing. The 184,000 loans represent approximately two percent of Wells Fargo Bank’s total residential servicing portfolio as of the end of the fourth... Read More...

DriveItNow Credit Center technology aims to streamline consumer auto financing process

DriveItNow announced on Wednesday the pilot release of its Credit Center technology, which is designed to streamline the consumer financing process on automotive dealer websites and portals. Credit Center allows online shoppers to explore various credit services from one platform without having to provide sensitive information such as Social... Read More...

Cornerstone Credit Union League members originated 11,000 loans per day in 2013

The Cornerstone Credit Union League, which represents nearly 700 credit unions in Texas, Oklahoma and Arkansas, said on Tuesday that its members originated over 11,000 new loans every day in 2013. According to Cornerstone, its member credit unions injected more than $118 million into local economies every business day through lending... Read More...

Three major U.S. banks discontinue deposit advance products

Three major banks, including Wells Fargo, U.S. Bancorp and Fifth Third Bank, announced last week that they would stop offering deposit advance products, a kind of payday loan that came under criticism by regulators last year. The banks announced the move last week. Wells Fargo said it would discontinue its deposit advance service on Feb. 1,... Read More...

Democratic lawmakers introduce Delaney-Carney-Himes housing finance reform plan

Democratic Reps. John K. Delaney (Md.), John Carney (Del.) and Jim Himes (Conn.), all of whom are members of the House Financial Services Committee, outlined a proposal last week to reform the housing finance system using private sector market mechanisms. The proposal, which they plan to introduce in the spring, is designed to create incentives... Read More...

Report: Exceeding income borrowers among most credit-dependent consumers

A recent report from the Center for Financial Services Innovation identified consumer needs in accessing small-dollar loans, revealing that borrowers who exceed their income are “among the most credit-dependent customers” and have the fewest options in the financial marketplace. The report said exceeding income borrowers generally had the... Read More...

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