Consumer delinquencies fell to 1.21% in the second quarter, according to a report from the American Bankers Association. This marked the lowest level since the ABA started collecting data in 1993.
Better-than-expected bank earnings and inflation data this week propelled the S&P 500 up 1.7% Thursday, its biggest one-day increase since March. The growth could be an indication that investors are shrugging off concerns over continued price increases and the Federal Reserve's plan to taper its pandemic support efforts.
Zixta Martinez has been named deputy director of the Consumer Financial Protection Bureau, a position that had been vacant since January. Martinez formerly was the senior advisor for the CFPB's supervision, enforcement and fair lending division.
The Consumer Bankers Association and more than 100 other industry groups have urged Congressional leaders in a letter to oppose proposed legislation that would require banks to report data on customer transactions to the Internal Revenue Service. The groups say that negotiations to raise the reporting threshold and add exemptions are an improvement from the original proposal but still problematic for consumers, noting "the privacy concerns for Americans are real and should not be taken lightly."
The biggest US banks generally saw improvement across a range of consumer lending sectors in Q3, including auto loans, credit cards and mortgages, with some areas surpassing pre-pandemic levels. "The pre-pandemic organic growth machine has kicked back in. Consumers still have a lot of money in their pockets, and they're going to spend it," said Bank of America CEO Brian Moynihan.
There are many key opportunities for TD Bank to expand from its East Coast retail business into other parts of the US, said Greg Braca, chief executive of US operations. Acquisitions could help with that, and the commercial and corporate banking businesses are poised to take market share, Braca said.
Returning employees to offices is a high priority for Bank of America, said Cathy Bessant, the bank's vice chair of global strategy. The informal collaboration with an office culture "produces a better and more sustainable outcome," said Bessant.
Bonuses paid to executives in charge of fixing issues or shortcomings at Citi are necessary to ensure these issues are corrected, said CEO Jane Fraser. The bank is willing to spend where and what is necessary to improve risk management and control processes, said Fraser.
Federal Parent Plus loans are increasingly driving the federal student lending market into unsustainable territory, allowing parents to borrow funds without limits, regardless of income levels. Some universities have come under fire for steering families toward these loans to cover rising costs that go beyond what they should normally borrow.
Stock futures were up in pre-market trading, following the release of better-than-expected earnings from Bank of America, Morgan Stanley, Citigroup and Wells Fargo. Bank of America said its third-quarter profit increased 58% year over year due to the release of some loan-loss reserves and a rebound in income from loans and debt securities.
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