U.S. Market Close 5/21/2025

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85% of Consumers Are Looking for Financial Advice. Here's How to Start Taking Control of Your Finances

Trusted individuals can be good sources of information but may not always provide accurate advice.

Key Takeaways

• Eighty-five percent of U.S. consumers are actively seeking financial information, with most turning to friends and family members for advice. 
• Trusted individuals can be appealing sources of information but may not have the acumen to provide neutral, tailored and accurate advice. 
• Eighty-six percent of people know what they want about their money, and 45% said they secretly know more about finances than they typically let on.
• Professional financial planners are recommended for anything complex.

According to a May 2025 Gallup poll, 85% of US consumers say they’re looking for personal finance information.

The highest percentage, at 43%, are asking their friends and family members for money guidance, followed by 41% who are consulting with trained financial advisors and planners. Thirty-six percent turn to financial websites, and 32% visit financial institutions such as banks and credit unions.

Read more at USNEWS

25% of Subprime Consumers Use Credit for Nonessentials to Improve Credit Score

Contrary to perceptions of financial irresponsibility, a significant portion of subprime borrowers actively and strategically use credit to improve their financial standing, revealing an underserved market segment with a strong desire for traditional financial inclusion. It’s one of the insights drawn from the recent PYMNTS report “High Credit Card Denial Rates Force Subprime Borrowers to Turn to Alternative Options.”

Navigating the current consumer credit environment presents considerable challenges for individuals classified as subprime borrowers, typically defined by credit scores below 620. These consumers face significant barriers to accessing conventional credit products. Traditional banks are often ill-equipped to underwrite this segment. As a result, subprime applicants encounter substantially higher denial rates for traditional products like credit cards. Specifically, bank denial rates for subprime credit card applicants are 2.3 times higher than those for super-prime borrowers, with 29% of subprime consumers reporting being denied a credit card compared to just 12% of super-prime consumers. This limited access to traditional financial services compels many subprime borrowers to seek alternative lending options.

Subprime borrowers are increasingly turning to nontraditional avenues such as payday loans, credit-builder loans and buy now, pay later (BNPL) services to cover essential purchases and bridge cash flow gaps.

Read more at PYMNTS.COM

Subprime Auto Lenders Encounter Decline in Approvals

Key Takeaways

• The proportion of subprime car loans declined in April, a signal that lending standards tightened even as the number of overall approvals increased.
• Large lenders are cutting their risk by rejecting more subprime applicants in the face of greater delinquencies.
• Average auto payments continue to run high, encouraging more purchasers into 72+ month financing.

Automobile sales may still be rolling along, but the road is getting rocky for subprime borrowers. Lenders are pickier about high-risk loans even as overall approvals quietly go up. That leaves those with dubious credit to work harder to get financing.

The Dealertrack Credit Availability Index by Cox Automotive revealed that the number of subprime borrowers approved in April 2025 decreased by 2.8 percentage points from the previous month even as overall automobile loan approvals inched up by 0.2 points.

That combination signals a market still open to strong borrowers but increasingly closed off to those with lower credit scores. It’s little wonder that low-score borrowers received the go-ahead, as one of the analysts from Ford Authority named it.

Read more at BADCREDIT.ORG

Rising Student Loan Delinquencies May Offer Renewed Refi Opportunities

As a hard-nosed new Department of Education begins collecting on outstanding federal student debt, banks and credit unions must assess impacts on existing consumer portfolios, while also cultivating new lending opportunities

The number of federal student loan borrowers who are at risk of defaulting is surging past levels seen before the pandemic, according to new research from TransUnion. Measured as a percentage of federal student debt that should be in repayment mode, one out of five (20.5%) borrowers are seriously delinquent — 90+ days past due as of February, which is the first stage where processors report federal student loan delinquencies to credit bureaus.

TransUnion contrasts that 20.5% figure with 11.5% of borrowers in serious delinquency in February 2020 — near the start of Covid and the subsequent debt relief programs. The chart below details the trend and contrasts it with how such accounts were tracked previously — as a percentage of all student loan borrowers. The company’s revised approach computes the percentages from a base of borrowers who are in repayment mode.

Read more at The Financial Brand

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GOP repeals Biden-era rule cracking down on bank mergers

The rollback is the latest sign that Republican control of Washington will create a much more permissive climate for financial institutions.

House Republicans on Tuesday passed legislation to rescind a Biden-era policy meant to more closely scrutinize proposed bank mergers, sending the regulatory rollback to President Donald Trump’s desk.

The House voted 220-207 to nullify a new rule finalized by the Office of the Comptroller of the Currency last September that created a tougher regulatory process for banks seeking to merge.

The GOP repeal measure cleared the Senate earlier this month on a 52-47 vote, which was also divided along party lines.

The legislation, which now awaits Trump’s signature, is poised to have little immediate practical impact because the Trump administration earlier this month already scrapped the Biden-era rule. But the repeal, which Republicans advanced under the Congressional Review Act, will also prohibit any administration in the future from pursuing a “substantially similar” regulation on bank mergers.

Read more at POLITICO

Fed Report Shows Surprising Drop in Subprime Credit Card Demand

Key Takeaways

• Subprime credit card delinquencies have fallen unexpectedly following several years of consistent growth.
• Lower APRs and less purchase activity indicate that subprime consumers might have less taste for fresh debt.
• Credit companies should monitor this possible inflection point since it may indicate larger consumer credit changes.

Subprime card customers are temporarily easing back on the gas pedal, according to recent data from the Federal Reserve Bank of Kansas City.

Despite several years of increasing delinquency rates and sustained economic stress, as of January 2025, the subprime delinquency rate has dropped for two consecutive months, though it remains elevated.

Jordan Pandolfo, an economist with the Federal Reserve Bank of Kansas City, recently released an Economic Bulletin that analyzed monthly account-level credit card information from large U.S. banks and issuers.

Read more at BADCREDIT.ORG

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Can AI Replace Human Debt Collectors?‌ YALE

New research co-authored by Yale SOM Professor James Choi finds that people are less likely to follow through on a commitment to repay a debt if it’s made to an AI agent. The finding hints at one area where humans may always retain an advantage over bots.

When the home audio company Sonos released a disastrous update to its app last year, one of the agents fielding angry calls from customers was an multi-modal chatbot from the AI startup Sierra. Sonos is one of many companies that are using AI for customer service, taking advantage of the technology’s growing ability to successfully navigate unpredictable conversations with human beings. ‌

If AI can handle being on the receiving end of a tricky conversation, how about initiating one? A leading consumer finance company in China is supplementing its human collection agents with AI. Can artificial intelligence get people to do something they don’t want to do, like repaying a past-due debt?‌

A new study co-authored by Yale SOM’s James Choi says no—at least, not as well as humans can. Choi and his co-authors found that no matter how much the AI improved (the company introduced several upgrades to its software during the relevant time), it could not outperform humans. 

Read more at Yale School of Management

Fintech Breach Sources and other Digital Transactions News briefs from 5/21/25

• Nearly 42% of breaches suffered by major fintech companies stem from third-party vendors, according to “Defending the Financial Supply Chain: Strengths and Vulnerabilities in Top Fintech Companies,” issued by Security Scorecard, which analyzed 250 major fintechs.
• The processor FIS Inc. said it will work with Letskipp Ltd., also known as Kipp, to develop a solution for nonsufficient funds authorization for debit card clients.
• Shift4 Payments Inc. announced another extension of its $2.5-billion cash tender offer for Europe-based processor Global Blue Group Holding AB. This is Shift4’s second extension since the Feb. 16 agreement.
• The big processor Worldpay said it is expanding operations in Latin America by offering domestic acquiring in Colombia. The company, which will soon become part of Global Payments Inc., processes for merchants in Argentina, Brazil, and Mexico.
• The Knickerbocker Hotel will use hospitality-payments specialist ROH to automate payments processes including contracts, deposits, and card authorizations.

Read more at DIGITALTRANSACTIONS.NET

We advise financial technology companies at the

start-up, product development, and product evolution stages.

Who’s Winning the Instant Payments Race? Depends on the Customer

Instant payments have entered the mainstream — but how, why and for whom financial institutions deploy them is anything but uniform.

Our latest data brief uncovers a nuanced, often-surprising competitive landscape. Some banks are racing to serve businesses with real-time tracking and confirmation tools. Others, particularly digital-only players, are betting on consumer-first strategies, powered by partnerships and incentive programs. In between, smaller institutions are trying to catch up — but many still haven’t gotten off the ground.

“Real-Time Readiness: How Banks Are Innovating Instant Payment Access for Businesses and Consumers,” a PYMNTS Intelligence and The Clearing House collaboration, explores how United States-based financial institutions align real-time payments with their core business models. Drawing on survey responses from 400 bank and credit union executives, the report captures the motivations, roadmaps and blind spots shaping this evolving landscape.

Read more at PYMNTS.COM

Americans' Consumer Debt Hits All-Time High of $18.2 Trillion, Experts Say Some Borrowers 'Will Have A Much More Difficult Time Getting Credit' Going Forward

• American consumer debt hit $18.2 trillion in the Q1 2025, according to the Federal Reserve Bank of New Yor
• While credit card and auto loan balances are both declining, student loan debt and mortgage balances have increased
• Student loan debt was also identified as the primary driver behind delinquent debt, which increased 4.3% over the last quarter

Americans' consumer debt hit an all-time high in the Q1 2025, according to the Federal Reserve Bank of New York's "Quarterly Report on Household Debt and Credit." The report, which was released Tuesday, says that household debt is at $18.2 trillion, up $167 billion since Q4 2024.

In two categories, credit card balances and auto loan balances, Americans are actually lowering their debt loads. According to the report, credit card balances fell by $29 billion and auto loan balances decreased by $13 billion.

However, Ted Rossman, a senior industry analyst at Bankrate, told CNN, "Don't be fooled by the modest decrease[s]. Credit card balanc es and interest rates remain near record highs." According to Rossman, credit card balances are 54% higher than they were four years ago, and auto loan balances have gone up by 19% over the same period.

Read more at BENZINGA

Embracing the Future: Debit-Driven Consumers, Flexible Tech, and Lower Delinquencies

The consumer payments landscape is evolving rapidly, and if you're in the auto lending or financial services space, it's critical to stay ahead of the trends that shape borrower preferences. That’s why we were thrilled to attend the AFSA Independents Conference 2025 and participate in the webinar, The Future of Debit-Driven Consumers, Flexible Tech and Lower Delinquencies, presented by David Graves, VP of Sales at REPAY. 

Debit is Dominating 

Consumers are leaning into debit like never before, with over 30% of all payments now made via debit cards. This is particularly true for loan repayment behavior, where borrowers are demanding flexible, convenient options, especially in a post-pandemic world.  

Digital Wallets Are a Must 

Apple Pay®, Google Pay™, and other digital wallets have shifted from “nice to have” to “must have.” Consumers expect mobile-first solutions with biometric security and tokenized protection. Auto lenders must embrace these tools to keep up with borrower expectations. 

Read more at REPAY

The Power of Cash: Why Using Paper Money is Good for You and Society: Boston University

Why you should use cash for purchases at least once a week In a new book, an economist explains the vital role of paper money

It is so easy to pay for your everyday purchases with a credit or debit card or an app on

your phone – why would you ever want to use cash?

Hold on just a minute.

In a new book, an economist explains the benefits to you and society when you pull out

some bills rather than a phone app or credit card.

Using cash helps you spend less money in a shopping trip, reduces the price you pay

for goods and services, gives you privacy, helps the poor, reduces problems caused by

natural disasters and protects a country from external enemies, said Jay Zagorsky,

author of the book The Power of Cash: Why Using Paper Money is Good for You and

Society.

Read more at NEWSWISE.COM

Top 5 priorities for modern tax and accounting firms

Explore the top five priorities redefining success for tax and accounting firms in a technology-driven era. Learn how adapting to client needs and optimizing pricing strategies can drive success.

The landscape of the tax and accounting industry is evolving rapidly, driven by technological advancements and a growing demand for value-added services.

According to the 2025 State of Tax Professionals Report by Thomson Reuters Institute, tax, audit, and accounting firms are focusing on several key priorities to stay competitive and meet the changing needs of their clients. This blog highlights the top five priorities and explores the impact of artificial intelligence (AI) on the industry.

Top 5 priorities for tax and accounting professionals

In today’s fast-changing tax and accounting landscape, firms are facing a range of challenges that demand thoughtful strategies and innovative solutions.

Read more at Thomson Reuters Institute

New Data Shows Smaller Players Come Up Big as Credit Unions Unleash Innovation

Credit unions tend to evoke images of simple, brick-and-mortar institutions, where friendly employees who know you by name make up for the lack of financial bells and whistles at big banks. That almost quaint perception is rapidly becoming outdated.

America’s smallest financial institutions are innovating in financial products and services for their members. Even pint-sized credit unions are accelerating their digital journey to meet consumer expectations for everything from buy now, pay later (BNPL) programs to mobile apps for credit cards for your teenagers.

A forthcoming report, “Credit Union Innovation Readiness: The Smallest Step It Up,” a collaboration between PYMNTS Intelligence and Velera, shows how expansion into cutting-edge financial products and services is no longer the exclusive trajectory of Wall Street banks or the largest credit unions.

The report, based on a survey of 500 credit union executives conducted from Oct. 11 to Nov. 22, 2024, reveals a dramatic change. The share of credit unions lagging on innovation plummeted to 15% from 55% in just a single year.

Read more at PYMNTS.COM

Moody’s downgrades JPMorgan, Bank of America, Wells Fargo in blow to U.S. banks

Moody’s Ratings on Monday downgraded the long-term ratings of several of America’s largest banks, including JPMorgan Chase & Co (NYSE:JPM), Bank of America Corp (NYSE:BAC), and Wells Fargo & Company (NYSE:WFC), citing weakened prospects of federal support following Friday’s U.S. sovereign downgrade. The move marks a rare blow to the top tier of the U.S. financial system and may raise borrowing costs and regulatory pressure on institutions still seen as systemically important.

The rating agency lowered deposit ratings, senior unsecured debt, and counterparty risk assessments for key subsidiaries and branches of the banks to Aa2 from Aa1. These ratings had previously included a notch of uplift tied to the government’s Aaa rating, support Moody’s no longer deems as fully credible following the downgrade of U.S. sovereign debt to Aa1.

Read more at INVESTING.COM

JPMorgan CEO Jamie Dimon says the bank will let clients buy bitcoin

Dimon made it clear that his personal view of bitcoin remains unchanged, highlighting issues like money laundering and the lack of clarity surrounding ownership.

“We are going to allow you to buy it,” Dimon said at the bank’s annual investor day on Monday. “We’re not going to custody it. We’re going to put it in statements for clients.”

The decision marks a notable step for the largest U.S. bank, particularly due to Dimon’s history of criticizing the digital currency and the crypto market broadly, and is the latest sign of bitcoin’s entry into mainstream investing. Since August, Morgan Stanley has allowed its financial advisors to pitch some spot bitcoin exchange-traded funds to qualifying clients.

Dimon made it clear that his personal view of bitcoin remains unchanged, highlighting issues like money laundering and the lack of clarity surrounding ownership, along with “the sex trafficking, the terrorism.”

Read more at NBC NEWS

The Generational Differences Reshaping Consumer Finances: Corey Wrinn, Rivel Banking Research

Major life events frequently prompt consumers to change their financial tools, even institutions. According to new research, using these opportunities to fuel growth requires detailed analysis and nuanced orchestration of products and messaging by generation.

As consumers journey through life, they encounter significant events that reshape their priorities, and, eventually, their financial landscape. Recent insights from Rivel Banking Research (January 2025) highlight crucial opportunities for financial institutions to engage effectively with both current and future customers during these key stages. At these times, individuals are most likely to require additional services or solutions. This research not only underscores the strategic value of Life Event Marketing but also provides a clear roadmap — illuminating who to target and when — for financial institutions aiming to achieve sustained growth by meeting real-world customer needs.

Engaging Consumers at Every Life Stage

Life events are more than just milestones. They are catalysts for significant shifts in consumer needs, priorities and, crucially, purchasing behaviors. During major life changes, individuals are often more open to new information and solutions as their routines are disrupted and they reassess their current circumstances, including their finances. Importantly, these are often emotionally charged periods. Banks and credit unions that can connect with consumers with empathy and relevant support during these times can build stronger, more loyal relationships.

Read more at The Financial Brand

Household Debt Hits Record High as Student Loan Delinquencies Rise

Key Takeaways

• Total household debt increased to $18.2 trillion in Q1 2025, up by $167 billion.
• Delinquencies on student loans increased following several years of suspended reporting.
• Credit card and automobile loan balances fell slightly, but overall delinquency levels rose.

Americans are deeper in debt than ever before. The Federal Reserve Bank of New York’s most recent snapshot revealed household debt increased by $167 billion in early 2025 and reached an all-time high of $18.2 trillion.

Although a number of categories decreased — credit card debt and car loans among them — mortgage balances increased significantly, and a flood of recently published student loan delinquencies tipped the scales.

Read more at BADCREDIT.ORG

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Mortgage rates jump above 7% after Moody’s downgrade of U.S. credit

‘The timing is really not ideal for prospective buyers,’ economist says

Mortgage rates surged after the credit-rating agency Moody’s downgraded U.S. debt.

Moody’s cut the U.S.’s sovereign credit rating from AAA to Aa1. It was the last of the major credit-rating firms to strip the country of its triple-A rating. S&P Global Ratings downgraded U.S. debt in the summer of 2011. 

The downgrade of debt put upward pressure on bond prices on Monday morning. That pushed the 30-year fixed-rate mortgage up 12 basis points to 7.04%, according to Mortgage News Daily. It later settled at 6.99% later in the day.

Read more at MARKETWATCH

7 Fintech and Payments Trends That Will Reshape Retail Banking in 2025

A new report offers a comprehensive look at key payments concepts that will impact retail banks, both in the near-term and longer. 

Here are seven that we think should be top of mind for payments leaders at U.S. institutions.

Executive Summary

• Retail banking is approaching a transformative crossroads with emerging fintech innovations set to disrupt traditional payment ecosystems in 2025. Major changes include Apple’s opening of NFC access creating unprecedented wallet competition, behavioral biometrics shifting to passive ID verification, and virtual cards revolutionizing B2B expense management. Regulatory developments including PSD3 readiness and regtech adoption will be critical priorities.

Forward-thinking banking executives must prepare for increased wallet competition, embrace "glocal" payment solutions, strengthen fraud prevention through AI implementation, and develop sustainability-focused offerings to maintain competitive advantage in this rapidly evolving landscape.

Key Takeaways

• Apple’s opening of its NFC ecosystem will trigger intense digital wallet competition, with traditional banks needing to develop competitive wallet offerings or risk market share erosion.
• Virtual cards will transform B2B expense management with instant issuing, spend limits, and transaction tracking capabilities that dramatically reduce fraud and manual processing.

Read more at The Financial Brand

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