The most recent report on US consumer credit shows credit card debt reaching a new high and surpassing the previous peak reached in 2008; outstanding credit card debt in June was $1.02 trillion; source discusses increased market competition in the credit card market; also notes higher default rates yet increased risk taking given the improved market environment. Source
A quarterly report from the New York Federal Reserve says household debt has reached its highest level since 2008 at $12.58 trillion; household debt increased $226 billion in the fourth quarter of 2016; home and auto loans represent the majority of the debt; despite the increase, bankruptcies and foreclosures for the fourth quarter reached an 18-year low indicating consumers are capable of managing the added debt. Source
Business Insider has released a report on US regulation and fintech; says US regulation is a hindrance to the growth of the industry and is slowing its potential; the report titled, "The US Fintech Regulation Report," provides details on regulatory agencies' involvement with fintech and outlines their initiatives; explains the negative effects of regulation on the industry. Source
A legal case initiated by the city of Miami, Florida has reached the Supreme Court; the case (a combination of two earlier cases) claims that banks, including Bank of America and Wells Fargo, are financially liable for a decade of targeting blacks, Latinos and other minorities for loans with risky terms, including prepayment penalties, negative amortization and no documentation; there is concern that the case may be delayed until the Supreme Court regains a tie-breaking ninth Justice, or result in a return to the lower courts. Source
The United States Automobile Association (USAA) was created to provide financial services for Americans serving in the military; the Association has seen significant adoption of biometric authentication which it first introduced for members in 2015; the USAA is currently reporting two million of its five million mobile app users opting for mobile account sign in using fingerprint, facial or voice recognition; the Association is actively integrating new biometric solutions and working with new providers. Source
Europe's PSD2 will require financial institutions to share data with third party service providers creating a new market opportunity for fintech developers with guaranteed account data access; in the US fintechs must still rely on relationship building to secure data partnerships thus making technology development more challenging; American Banker reports on details of a recently formed association that's seeking to make data access easier; the Consumer Financial Data Rights (CFDR) consortium includes 31 data aggregators and fintech companies lobbying for data access solutions and agreements; American Banker also outlines the progress that has been made in data sharing and proposals from the CFDR. Source
According to data from TransUnion, financial technology groups originated $15 billion of personal loans in the first half of 2017; this represents nearly a third of the total US market for new personal loans; John Wirth, vice-president of fintech strategy at TransUnions stated, "fintech business model appears to be working nicely. Their use of the latest technology . . . has likely helped them become leaders."; Source
While speaking on a panel at Money 20/20 former and current regulators talked about the different approaches to fintech regulations; the Financial Conduct Authority recently released a report showing the UK approach has helped get new ideas into the market and seen companies get access to much needed capital; the US on the other had has seen federal and state regulators argue over proposed charters; there could be a lot the US can learn from the current UK program. Source.
Bloomberg reports on flattening US Treasury yields; article shares how the trend could lead to effects on bank earnings, the economy and the factors leading to the flattening. Source
USAA went live on Wednesday with a virtual assistant that works with Amazon's Alexa voice interaction device; Alexa will be able to answer commands from consumers who ask about accounts, balances, spending and transactions; USAA is now one of many financial institutions working with Alexa and as American Banker points out the USAA version is more flexible with voice commands than other institutions; when prompting Alexa they do not need to say the command a certain way, they can say the command as they wish; USAA is working with software company Clinc to customize their experience, as Jason Mars, Clinc's CEO, tells American Banker, "You've got this ability to speak to it in a messy, convoluted way, and the AI can understand everything, you feel like you're speaking to a human in the room." Source