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How Financial Institutions Can Grow Loans in Uncertain Times

Need to Know:

• Loan demand is shifting, not disappearing. Consumers are still borrowing, but with greater caution, requiring lenders to be more targeted and strategic in how they identify and engage opportunities.
• Better data is now a competitive advantage. Transaction-level and cash flow insights reveal creditworthiness and intent that traditional models often miss, opening new pathways for growth.
• Experience and trust drive conversion. Personalized, timely, and transparent lending experiences increase borrower confidence and ultimately improve loan uptake in uncertain conditions.

Consumers are navigating a complex financial environment marked by persistent inflation, elevated interest rates, and growing financial strain. Economic uncertainty has not eliminated demand for credit — it has fundamentally reshaped it. Total U.S. consumer debt reached $18.2 trillion by the end of 2025, reflecting both continued reliance on credit and the pressures households face in maintaining financial stability

At the same time, risk is rising. While delinquency rates have stabilized somewhat, they remain elevated compared to pre-pandemic levels, with 5.7% of consumers at least 60 days past due on a payment. This creates a paradox for lenders: consumers still need credit, but the margin for error has narrowed significantly.

In this environment, growth is no longer about expanding volume indiscriminately. It is about precision — identifying the right opportunities, reducing risk exposure, and delivering value in ways that align with how consumers are managing their financial lives today.

Read more at The Financial Brand

FinCEN Issues Guidance to Help Financial Institutions Eliminate Fraud Through Information Sharing: Department of the Treasury

WASHINGTON—Today, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued updated guidance to clarify how financial institutions can share information with each other about suspected fraud under section 314(b) of the USA PATRIOT Act. 

“Americans lose hundreds of billions of dollars to fraud each year. At Treasury, we follow the money, and we know financial institutions are often the first to see suspicious activity in real time. They need the tools to act quickly and share information that can help stop fraud before it spreads,” said Secretary of the Treasury Scott Bessent. “Under President Trump and Vice President Vance’s leadership, we will continue targeting fraud wherever it occurs and protecting American taxpayers and consumers.”

FinCEN’s updated guidance clarifies that a financial institution may share information about activity involving suspected fraud, money laundering, terrorist financing, or other specified unlawful activities, and that it may share that information with any other financial institution eligible to participate in the section 314(b) program to identify illicit financial activity. 

Read more at U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN)

Validate consumer and business bank accounts, confirm ownership, detect fraud, and assess risk 

Banks Can’t Win Tomorrow with Yesterday’s Customer Experience

Retail banks face a more consequential competitive shift than many executives recognize. According to Rex Salisbury, founder of Cambrian and an early-stage fintech investor, the greatest threat is not a single challenger bank or digital wallet, but a structural change in how consumers and businesses access financial services.

Fintech firms that once served younger or lower-income customers are moving into the mass affluent segment, while software platforms increasingly embed financial products directly into business workflows. In a recent episode of the Banking Transformed podcast, Salisbury argues that customer expectations, business models, and technology capabilities are changing faster than many incumbent institutions are prepared for.

Why this matters: : From wealth management to small business lending, customers increasingly value integrated digital experiences, faster execution, and transparent value. For banking leaders, the central question is less whether disruption is coming and more how institutions will adapt their operating models to compete for the next generation of customers.

Read more at The Financial Brand

The American People Are in a Sour Mood: PEW

But there are some signs of optimism about the future

As the nation approaches its 250th birthday, the American public’s mood is sour – but with some signs of enduring optimism.

In Pew Research Center surveys over the past year, most people have told us they are dissatisfied with the way things are going in the United States and that they think the country’s best days are behind us.

In recent decades, Americans also have grown less trustful of each other and of institutions including the federal government, both major political parties, the mainstream media, and colleges and universities.

Read more at Pew Research Center

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Jose L. Santiago

Public Affairs Specialist

Tax Outreach, Partnership and Education

Email: jose.l.santiago@irs.gov

The Next Wave of AI in Banking Will Have Nothing to Do with Technology

It’s over: AI skepticism is passé.

“We’re shifting from experimentation. Most people are believers in the capabilities” says Keri Smith, banking and capital markets AI and data lead at Accenture. “Now, the discussion is about how to get to P&L impact, and how to mobilize around scaled bets where AI can make a difference.”

Banking organizations are also learning how to tie AI tools and approaches into their strategic priorities, according to Smith.

“People are leveraging AI a lot in their personal lives as well as at work,” says Smith. “There are many more educated opinions regarding what banks need to do, how they need to manage it, and more.”

Read more at The Financial Brand

Remittance Tax Faces Constitutional Challenge As Fintech Trade Group Files Suit

WASHINGTON—The Financial Technology Association has sued Tennessee to block a new tax on international money transfers, arguing the law unconstitutionally discriminates against foreign commerce and unfairly targets money transmitters while exempting banks and other financial institutions. The lawsuit, filed Wednesday in federal court, seeks to prevent the tax from taking effect Jan. 1, 2027, according to court filings and reporting by Law360.

The Tennessee law imposes a $10 charge on international money transfers under $500 and an additional 2% tax on amounts exceeding $500. State officials estimate the measure will generate roughly $55 million annually from more than 16 million cross-border transfers originating in Tennessee each year. The tax applies to entities licensed under the state's Money Transmission Modernization Act and is expected to affect approximately $5.5 billion in annual remittance volume, according to guidance issued by the Tennessee Department of Revenue.

Read more at CU Today

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New Online Lenders Alliance Data Finds Bank and Credit Union Customers Continue to Rely on Alternative Providers for

Small Dollar Credit

The Online Lenders Alliance (OLA) released new data showing that bank customers and credit union members continue to use alternative financial services in high numbers when they need small dollar credit, even when they have accounts at banks and credit unions which may offer lending products.

After analyzing data provided by five large installment lenders from calendar year 2025, covering more than 3.1 million customers, OLA found that 74.5 percent had accounts at a bank and 25.5 percent had accounts at a credit union. In addition, 29.4 percent of customers from these installment lenders had an account at one of the six banks often cited as providing small dollar credit options—Bank of America, Huntington Bank, Regions Bank, Truist, U.S. Bank, and Wells Fargo. The data for 2024 was from five lenders, representing 3.3 million customers; four of the five lenders were the same in both sets of data.

Read more at OLA

About 1 in 5 Americans have used crypto; Republicans’ use has ticked up: PEW

Even after years of buzz, the use of cryptocurrency has remained fairly stable in the United States. Today, about one-in-five U.S. adults (19%) say they’ve invested in or used a cryptocurrency – about on par with the 16% who said this in 2021.

But for the first time, there is a partisan gap in use. Republicans’ crypto use has ticked up from 16% in 2021 to 22% today, and they are now more likely than Democrats to say they’ve used it, according to a Pew Research Center survey conducted in January 2026.

Crypto has become part of the national political conversation in recent years. The Trump administration has set out to make America the “crypto capital of the world,” including steps to allow crypto firms to become banks.

Read more at Pew Research Center

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Banks Are Adopting AI to Sell More Products, But Consumers Are Using It for the Advice You Never Give Them

Retail banking is at a confusing crossroads — and leaders may not be asking the right questions as they decide which way to go.

Key insight: On the one hand, consumers have taken up GenAI tools on their own, to better research and manage their financial planning, product search and decision making.

Alyson Clarke, principal analyst at Forrester, argues that as such AI techniques become mainstream — and they are — institutions risk the loss of banking relationships to the AI, with their products and services becoming commodities,. This could quickly erode relationship banking, and encourage further fragmentation, from the banks’ perspective, and put AI companies and other providers — even the likes of Apple — in the focal position of consumers’ financial decision making, Clarke continues.

On the other hand, many traditional financial institutions have been investing heavily in retail banking AI, but according to Clarke they aren’t doing it in a way that will ensure customer retention nor enhance growth.

Read more at The Financial Brand

Can businesses charge you a fee for using a debit card?

Iowa (KCRG) - More businesses are charging fees when customers use credit cards, but debit card transactions are treated differently under payment network rules.

According to Pew Research from 2022, more than 40% of people in the U.S. make no cash purchases in a given week.

Marie Chalhoub, owner of Oscar’s in Hiawatha, said she sees the shift to cashless payments daily.

“People use credit cards a lot,” she said. “At least 85% credit cards, maybe 15% cash.”

Read more at KCRG.COM

This FCC proposal will make collections rethink offshoring

The FCC is proposing that offshore call center agents meet an English proficiency standard. It targets telecom providers, not collections. But the problem it is describing is one collections has always had.

On March 4, the FCC proposed requiring offshore call center agents to be proficient in American Standard English. Agents would have to disclose they're calling from overseas. Consumers could request a transfer to a US-based rep. The vote is March 26.

Telecom only. Not collections. Not yet.

But the problem the FCC is describing is not new, and it is not unique to telecom. When a consumer can't understand the person calling them, the call fails. The FCC calls that a language and communication barrier. In collections, we call it a failed contact. Same thing.

Read more at CORAFONE

Margins, Loyalty and Risk: The New Credit Card Issuer’s Playbook

Executive Summary

• While headline numbers look steady, consumers are carrying more debt and using BNPL for essentials, requiring issuers to rethink traditional FICO-based risk models.
• Major issuers are quietly cutting rewards value while premium players double down on ecosystem lock-in, forcing smaller institutions to compete through simplicity and local partnerships.
• Regional banks and credit unions are surviving margin pressure by targeting niche segments, modernizing through fintech partnerships, and treating cards as platforms rather than standalone products.

Credit card issuance has long been a mature and predictable business line for banking companies, but you wouldn’t know that by looking at current market dynamics. Card issuers today are operating in a marketplace that’s buffeted by change on all sides, including rapidly shifting consumer habits, accelerating tech capabilities, and ongoing economic uncertainty.

Read more at The Financial Brand

E-Complish, LLC Launches: IntellAgent™, a 24/7

AI Companion for Customer Account Management & Payment Processing

How a New Florida Charter Plans to Take on Banks — by Being a Traditional Community Bank

Bank charters are being sought by an increasingly diverse group of interests, from payments companies to crypto firms to automakers. But Erik Weiner and his nearly 250 investors have won conditional approval from FDIC and Florida’s Office of Financial Regulation for a new charter to do something straightforward, simple and — these days — less common: To run a community bank.

Weiner, founder, president and CEO of Portrait Bank, is a veteran of the business banking scene in central Florida, including stints at Fifth Third Bank, BankUnited and most recently City National Bank. The center part of the state includes Orlando and its environs.

Weiner notes that the population of community banks in the area has shrunk drastically to just six, versus nearly 40 in 2000. He says the thinning ranks of community-based business lenders, and growing dominance of four big banks — Chase, Bank of America, Wells Fargo and Truist — has created a gap in service for smaller businesses that want to be in their bank’s sweet spot. He’s building out a staff with commercial banking experience, alongside a robust mix of technology.

Read more at The Financial Brand

A majority of Americans say the country’s best years are behind us: PEW

Ahead of the United States’ 250th anniversary, 59% of Americans say the country’s best years are behind us, while 40% say its best years are ahead.

Americans are also much more pessimistic (44%) than optimistic (28%) when asked to think about what things will be like in the U.S. 50 years from now. Another 27% are neither optimistic nor pessimistic, according to a December 2025 Pew Research Center survey.

Views on whether the country’s best years are behind or ahead of us differ somewhat across demographic and political groups.

Race and ethnicity: Majorities of Black (66%), Hispanic (64%) and White adults (57%) say the country’s best years are behind us, as do 53% of Asian adults.

Read more at Pew Research Center

Cambridge Wilkinson Investment Bank

Closes $300MM Senior Lender Finance Credit Facility

for Institutional Specialty Real Estate Lender

Cambridge Wilkinson (“CW”) is pleased to announce the closing of a $300 million senior lender finance credit facility for an institutional specialty real estate lender. The facility provides scalable, committed capital to support the continued growth of the company’s origination platform, enabling the financing of a diversified portfolio of real estate-backed loans across its target markets. The structure was designed to align with the lender’s underwriting strategy and operational model, providing flexibility to efficiently fund a growing pipeline while maintaining disciplined credit standards. Transaction terms were privately negotiated.

The financing represents a significant milestone for the platform as it continues to expand its institutional footprint and increase market share within the specialty real estate lending sector. With demand for private real estate credit solutions remaining strong, facilities of this nature provide non-dilutive capital that allows originators to scale efficiently while preserving control over underwriting and asset selection.

“We continue to see strong demand from institutional credit providers for well-structured lender finance facilities supporting real estate-focused platforms,” said Rob Bolandian, Co-Founder and Global Head of Investment Banking at Cambridge Wilkinson. “We are pleased to have advised on a transaction that provides our client with substantial capital and flexibility as they continue to scale their platform and execute on their growth strategy.”

Cambridge Wilkinson remains highly active in advising specialty finance and real estate lending platforms on structured credit solutions, including senior credit facilities, forward flow arrangements, and other bespoke capital structures designed to support long-term growth and institutionalization.

Cambridge Wilkinson

Virginia’s New Uniform Consumer Debt Default Judgments Act: What Creditors Need to Know About HB 444: by Troutman Pepper Locke

On April 8, Virginia Governor Abigail Spanberger signed HB 444, the Uniform Consumer Debt Default Judgments Act, into law. The Act establishes pleading and notice requirements in certain consumer debt collection actions that must be met for a creditor to obtain a default judgment against a consumer. This Act is based on a model drafted by the Uniform Law Commission, similar versions of which have been enacted in Washington and introduced in Pennsylvania. HB 444 will take effect on July 1, 2027.

Scope

The Act’s pleading and notice requirements only apply to actions brought to collect an unsecured consumer debt, a secured consumer debt if the action is brought solely to obtain a money judgment, or a deficiency that remains after disposition of property that secured a consumer debt. The Act does not apply to actions to take possession of or dispose of real or personal property or to collect a debt owed to a government in which the government is the plaintiff.

Read more at JD Supra, LLC

Payliance NEWS

Faster Settlement. Faster Origination. No Operational Changes

For installment and single-pay lenders, ACH settlement timing is not just an operational detail. It is a capital efficiency decision with real cost implications.

If your business processes borrower payments via ACH, you already know the rhythm: payments submit, settlement closes, hold days are applied and funds arrive the following morning. That overnight gap is so common in the industry that most lenders have simply accepted it as standard. But standard does not mean optimal.

For high-volume subprime and near-prime installment and single-pay lenders, payday operators, and title lenders, closing that gap by 12 to 18 hours has compounding effects on your cost of capital, your origination capacity, and your overall liquidity position. Priority ACH Settlement makes same-day funding operationally straightforward.

The Hidden Cost of Next-Morning Settlement

Many non-bank installment and single-pay lenders, particularly larger and fintech-focused platforms, fund originations through warehouse or other revolving credit facilities and generally operate with relatively tight equity capital stacks. Every day that collected funds sit outside your available balance is a day your cost of capital continues to accrue. For a lender processing $500,000 in daily borrower payments, next-morning settlement means that capital is effectively idle from 5:00 PM until roughly 9:00 AM the following business day.

Read more at Payliance

How Third-Party Card Programs Can Lighten Your Regulatory Burden

Credit card programs are among the most compliance-intensive products in banking. CARD Act rules touch virtually every operational layer, from underwriting and disclosures to billing, rate changes and collections. For community banks and credit unions, maintaining the systems, training and ongoing monitoring these requirements demand can strain limited resources.

That’s driving more smaller financial institutions to consider third-party card program partnerships. These programs can handle compliance, technology integration, customer service and fraud management. The Federal Reserve, Office of the Comptroller of the Currency (OCC) and FDIC issued risk management guidelines for community banks managing third-party relationships.

Read more at The Financial Brand

Over $1 billion raised in this week’s 16 FinTech deals

Two major deals helped to bring this week’s total FinTech funding volume past the $1bn mark, with a total of $1.2bn raised across 16 deals. 

While funding surpassed the billion marker, this was due to two major deals, a $600m and $400m funding round. The biggest deal of the week was raised by AI-native data security company Cyera, which brought its valuation to $12bn, a fourfold increase over the past 18 months. The round, which was led by Evolution Equity Partners, brings its total equity raised beyond the $2bn mark.

The second biggest deal of the week, a $400m Series C extension, was secured by CyberTech company NinjaOne. The funding round brings NinjaOne’s valuation to $12.3bn and comes after 70% year-on-year growth.

Read more at Fintech Global

This Week’s Top 5 Stories in FinTech

How Lloyds is Using Agentic AI to Fight Fraud In Real Time

Lloyds Banking Group is scaling its use of AI to tackle one of financial services’ most persistent and costly challenges: fraud. 

With more than £1bn (US$1.3bn) of fraud prevented in 2025 and £100m (US$133.8m) invested in new fraud technology since 2023, the group is at the forefront of AI-driven financial crime prevention.

At the core of Lloyds’ strategy is a newly deployed agentic AI system designed to enhance real-time decision-making across its fraud operations. 

Built using the Group’s secure AI platform, Envoy, the system has been developed collaboratively by fraud, technology, data and risk teams.

Read more at Fintech Magazine

Capital One Reshapes Card Business With Discover Integration And Policy Shifts

Capital One Financial (NYSE:COF) is progressing with its integration of Discover Financial Services after closing the merger and outlining key milestones on the transition to the Discover network.

The company has given updates on expected cost and revenue synergies from combining the platforms and re-routing card spend onto Discover.

At the same time, a senior Capital One executive has been nominated for a top regulatory role at the Consumer Financial Protection Bureau, signaling potential influence on future consumer finance policy.

Read more at Simply Wall St

Is Crypto Becoming More Accessible at Checkout?

• Crypto.com and Yuno’s partnership expands on global crypto acceptance using merchant checkout solution Crypto.com Pay
• The lines between traditional and decentralised finance are blurring faster than ever. In a move toward mainstream adoption, Crypto.com is integrating with Yuno’s global payment network to embed Crypto.com Pay across more than 1,000 channels – enabling merchants to accept crypto as easily as cards and signalling DeFi’s deepening role in everyday finance.

Crypto.com Pay: How does it work?

Consumers will be able to make payments with their chosen cryptocurrencies for items sold by Yuno merchants. 

Yuno merchants will then be able to accept cryptocurrencies from Crypto.com’s user base that spans 140 million customers globally.

Read more at Fintech Magazine

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The Power of Payments Is About More Than Fee Income

From the earliest deposit-taking institutions to today’s digital challengers, banking’s defining feature has been that the same institution both safeguards money and moves it, turning stored balances into a medium for everyday payments. That’s an oversimplification, of course (a little lending is part of the story too!) but it points to something important that sometimes gets lost in an increasingly fragmented financial services landscape: payments matter.

The strength of a bank’s relationship with its customers is tied in no small part to the role it plays in how those customers make and receive payments. When that part of the relationship weakens, the broader relationship often does too.

For small businesses, payments are a major part of day-to-day operations: how they get paid, how they manage cash flow, and how they support their own customer relationships. When a small financial institution offers only minimal payment services to its business customers, it gives up one of the key supports of relationship primacy.

Read more at The Financial Brand

The Untapped Trillion: How Banks Are Finally Waking Up to the Home Equity Opportunity

Quick Summary

• As homeowners sit on record levels of home equity, banks risk losing billions to agile fintech competitors. Here's why the home equity market is the next great battleground in retail banking, and what smart lenders are doing about it.

For years, home equity has been one of retail banking's best-kept secrets, a vast, underleveraged asset class sitting quietly on household balance sheets while banks pursued shinier growth strategies. That is beginning to change. As interest rates stabilise and housing values remain elevated across major markets, a new race is underway to unlock one of the most significant opportunities in consumer finance. The institutions that move decisively now could define the next decade of retail banking. Those that hesitate may find the ground has already shifted beneath them.

Read more at Global Banking and Finance