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How Digital Lending Is Reshaping Access to Short-Term Credit

Digital lending is changing how people get short-term credit by making applications faster and easier. With mobile banking, earned wage access, and open banking, lenders have more ways to assess borrowers beyond credit scores. As these tools grow, new rules are also shaping how digital lenders handle fees, data, and consumer protection. 

These changes are also creating new ways for people to manage short-term cash needs. Some workers can access earned wages early, while lenders can use real-time financial data to make faster decisions. Together, these developments are changing how borrowers get credit and how lenders manage the risks that come with faster access.

Read more at BNO NEWS

Fintech’s Next Chapter: Five Insights from the Fed’s Payments Chief

On the first morning of the Federal Reserve Bank of Philadelphia’s 10th Annual Fintech Conference, Philadelphia Fed President and CEO Anna Paulson sat down with Mark Gould, the Federal Reserve's first-ever chief payments executive, to talk about the evolution of the payments system and the Fed's role in keeping it safe and efficient — one of the central bank’s five key functions. The discussion centered on the Fed's instant payment service, FedNow.

Three years after its launch, FedNow connects more than 1,900 financial institutions. Volume is growing 83 percent quarter over quarter, with daily transfers now close to $4 billion — up from $2 billion a year ago.

Read more at Federal Reserve Bank of Philadelphia

Optimize Lending Decisions with Real-Time Financial Data.

Enhance lead purchasing, underwriting, and product line

assignment with ValidiFI’s data-driven solutions

Fed officials are warning of more pain. Many Americans are already feeling it

Four years ago, with inflation at multi-decade highs, then-Federal Reserve Chair Jerome Powell delivered a blunt message to Americans: Getting inflation under control would come at a cost.

The Fed needed to act "forcefully," Powell told attendees at a key central banker conference that August. Doing so, he cautioned, would bring "some pain" for consumers.

Now, with the Fed back to raising interest rates for the first time in three years, a familiar warning about the economic fallout is resurfacing.

Read more at CNN

Federal Reserve releases consumer finance survey showing higher median income, rising debt stress

New survey data from the Federal Reserve show shifts in household income, wealth and borrowing across American families between 2022 and 2025. The findings indicate gains in median income and net worth, while a larger share of indebted households faces heavier payment burdens.

Highlights

• Federal Reserve's 2025 Survey of Consumer Finances shows real median family income rises 7 percent to $82,200, while real mean family income falls 6 percent to $145,200.
• Real median net worth increases 2 percent to $215,900, mean net worth rises 7 percent to $1.24 million, and median net housing value climbs to $230,000 from $218,900.

Read more at Traders Union

Have a tax law question?

Our #IRS Interactive Tax Assistant has answers.

Watch this short video to learn more:

https://youtu.be/y6HkaBkdKdU

Jose L. Santiago

Public Affairs Specialist

Tax Outreach, Partnership and Education

Email: jose.l.santiago@irs.gov

2026 Retail Banking Trends and Priorities

The 2026 Retail Banking Trends and Priorities report again shows that digital transformation remains the top focus. If you’ve read enough of our trend reports, you know what comes next: bold claims about customer-centricity, data-driven personalization, and AI-powered experiences that ultimately lead to modest real change and disappointing results.

This report is different, but not because banking has suddenly realized the need for transformation. It’s different because we’re no longer pretending the problem is complicated. After reviewing responses from hundreds of financial institutions about their 2026 trends and priorities, the pattern is clear. The banking industry knows exactly what it needs to do. It just refuses to take action.

Read more at Digital Banking Report

This Week’s Top 5 Stories in Fintech

Starling, Scotiabank, Thunes, Mollie, Google Cloud and Cognizant are just some of the companies in FinTech Magazine stories this week

Engine by Starling Powers Scotiabank’s Tangerine Business

Engine by Starling has enabled Tangerine Bank to launch a cloud‑native business banking proposition in under 12 months, marking the SaaS platform’s third international deployment within a year and its first in North America. 

Born out of Starling Bank in 2022, Engine by Starling sells the same modular, API‑first, cloud‑native core that runs the UK lender as a Software‑as‑a‑Service platform to other banks. 

Read more at Fintech Magazine

Your Next Capital Raise Starts Here.

Sitting on the Sidelines Until After the Midterms?

You’re not alone. Many business owners and executives are waiting for greater clarity from the November elections before committing to their

next phase of growth.

But waiting to make the decision doesn’t mean you

should wait to prepare for it.

If additional capital will be part of your growth strategy once the political

and economic environment becomes clearer, now may be the right time

to begin the conversation.

2026 State of Financial Marketing

The industry has bought the engine, but no one has bought the fuel.

At 52% of financial institutions, generative AI is operational or better in marketing, and 44% are increasing their spending on it in 2026. Not one respondent describes their customer data as real-time and AI-ready.

Institutions have invested in producing more marketing, not in the capabilities that determine who should receive it, when it should arrive, or whether it worked. Eighty-three percent are at segment-based personalization or below, and 1% describe themselves as hyper-personalized. Two-thirds of what the industry calls personalization is simply choosing which audience gets the message, which is list selection with better tools and far more data behind it.

Read more at Digital Banking Report

Conventional Wisdom is Wrong: Insurance Products Can Prosper Amid Economic Uncertainty

Financial institutions seeking ways to better meet accountholder needs in times of economic uncertainty might turn their attention to insurance products. And what many will find is that product strategy to emphasize or even to include protection in a down-market isn’t clear-cut. Consider two scenarios:

Consumer No. 1 is weighing the purchase of a life insurance policy. As primary breadwinner, she’s grown increasingly concerned about her family’s financial security. She shops around a bit but eventually decides to put her search on hold: the premiums are quite high and would put too much pressure on cashflow and savings.

Read more at The Financial Brand

THE LEADERS IN ONLINE LENDING ARE AT LEND360

If you are in fintech lending, then you need to be in Austin for LEND360 this 

October 12-14. The Innovation Hall is sold out and packed with companies 

offering cutting-edge business solutions. 900+ attendees will be onsite networking 

and making the connections to move their businesses forward. Dozens of content sessions will cover the critical issues facing the industry. Confirmed speakers include:

• Sherrie Rees – Chief Executive Officer – First Electronic Bank
• Wade Arnold – Co-Founder and CEO – Moov
• Naftali Harris – Co-Founder and CEO – SentiLink

Join the leading consumer lenders, small business lenders, service partners,

investors, bank representatives, and more for three days of high-impact networking, industry insights, and strategic collaboration. Whether you’re looking 

to connect with current customers or prospect for new ones, LEND360 is the premier opportunity to showcase your brand and solidify your credibility in the industry.  

Visit our website to learn more and register.

The best mortgage lending is both AI-powered and human-focused

For credit unions, the advantage comes from choosing AI that deepens the member relationship rather than pulling focus from it.

AI has arrived in mortgage lending all at once, and credit unions are feeling it from every direction. Vendors are pitching it, peers are piloting it, and new AI tools are showing up faster than most teams can evaluate them. But whether to use AI isn’t really the question anymore; that one is settled. The harder, more consequential questions are: Which AI belongs in your lending operation, and which parts of the mortgage process should be automated, augmented, or remain distinctly human?

The value of AI comes from where and how you put it to work. Done well, it can deliver three meaningful advantages for a credit union: 

Read more at CUInsight

While You Debate Policy, Your Customers Are Busy Connecting Accounts to AI

While banks and credit unions debate whether customer or member data can be entered into Microsoft Copilot, ChatGPT, or other GenAI tools, consumers have already done it. They have tools that are more powerful than your bankers’ ability to provide financial advice, or your online or mobile solution’s ability to provide real planning and answers. While you debate what’s next, consumers are already doing it.

In this two-part series, I am going to explore what’s available to consumers right now and what impact this could have on how you provide financial guidance.

Read more at The Financial Brand

PayYield lifts net portfolio yield on every consumer repayment: clearing available funds on debits that

decline today, and cutting what you pay to accept

the dollars that do clear.

How Americans’ Views on Wealth and Retirement Differ

Many workers focus on day-to-day financial security rather than building wealth

While Black and Hispanic families have seen increases in their wealth since 2013, these gains have not kept pace with the growth of wealth of White families. From 2019 to 2022, the median wealth gaps for Black and Hispanic families versus White families expanded by about $50,000. The result was that in 2022, the typical White family had $240,000 more wealth than the typical Black family and $223,000 more than the typical Hispanic family.1 The wealth gap of Black and Hispanic families compared with White families has persisted over time and has been expanding since 2010.2

Wide differences also exist within these groups. For example, the median amount of wealth ($923,300) held by upper-income White households was almost 17 timesthat of lower-income White households ($55,400).3 By definition, upper-income households had a monthly income that was at least double the national median—in 2021, more than $14,300 per month for a household of three. Lower-income households made less than two-thirds the national median, or less than $4,800 a month for a three-person household.

Read more at The Pew Charitable Trusts

Bankers Aren’t Becoming Obsolete, But Their Job Descriptions Are. How to Redefine the Role Before Customers Stop Calling

How GenAI Is Redefining What Makes Your Bankers Valuable

The first installment in this series made the case that your customers and members already have access to a new kind of financial capability which exceeds the in-person and online or mobile tools and advice you can provide. This development creates an uncomfortable question for every bank and credit union:

If a consumer can get superior analysis and insight in two minutes at 10 p.m., what is the job of a personal banker, loan officer, or anyone acting as a trusted advisor?

Read more at The Financial Brand

Maximize Your Call Center

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

AI Companion for Customer Account Management &

Payment Processing

When Credit Card Holders Open a Second Line of Credit, What Does It Signal to Their Original Card Issuer?

Credit cards are readily available, do not require collateral, and pose few administrative complications. This makes them common among borrowers — especially new ones, whose oldest credit instrument is less than six months old. When these early-stage consumers open a credit card, their action becomes one of the founding elements of their credit profile. This makes them particularly interesting to economists.

The modern-day credit profile is largely based on payment history, so paying off your debts on time is one way to access both more credit and credit on better terms. But there's another way borrowers can improve their access to credit. Credit card holders who open a new credit card are often rewarded with a higher credit limit on their original card. Strikingly, the borrowers who receive larger additional credit lines are not more likely to become delinquent in the future. These and other surprising findings are reported in “Building Credit Histories,” a new paper by Natalia Kovrijnykh, Igor Livshits, and Ariel Zetlin-Jones.1

Read more at Federal Reserve Bank of Philadelphia

The next generation of reforms to the retirement saving system

Since 2019, the SECURE Act and SECURE 2.0 have taken meaningful, bipartisan steps to expand retirement plan coverage, encourage automatic saving, improve portability, and open the door to lifetime income options. These reforms represent real progress—but significant gaps remain. Tens of billions of dollars in annual tax subsidies for retirement saving are not always well targeted toward those who need them most. Access to workplace retirement plans is still far from universal, leaving millions of workers without an easy way to save. Employers remain reluctant to offer lifetime income options, even as the shift from pensions to defined contribution plans has left retirees to manage longevity risk largely on their own. And savers continue to lose momentum when they cash out small balances between jobs, eroding years of accumulated savings before retirement.

Read more at The Brookings Institution

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PAYDAY + ALTERNATIVE LENDER

in NORTH AMERICA

Unexpected Expenses Leave More Households Searching for Financial Solutions

Financial obligations can change without warning, leaving families to manage sudden repairs or medical bills. Balancing daily living costs with surprise demands creates continuous pressure on monthly household earnings.

When savings fall short, finding dependable tools becomes a priority for maintaining stability. Exploring reliable choices helps individuals navigate immediate gaps and keep long-term goals on track.

Managing Household Budget Volatility

Monthly cash flow shifts unexpected challenges directly onto family balance sheets when earnings vary from week to week. A routine pay period might cover regular living expenses, but sudden car repairs or home maintenance issues immediately disrupt planned bill payments.

Read more at BNO NEWS

Community Bank Group Sues OCC Over National Bank Charters:

by A.J. S. Dhaliwal, Mehul N. Madia

On October 2, a community banking trade association filed a lawsuit against the OCC in the U.S. District Court for the District of Columbia, challenging the agency's authority to grant national trust bank charters to cryptocurrency companies. The complaint alleges that the OCC exceeded its authority under the National Bank Act (NBA) and violated the Administrative Procedure Act (APA) by permitting institutions that neither accept deposits nor primarily engage in fiduciary activities to obtain national trust bank charters.

The lawsuit challenges the OCC's March 2026 final rule expanding the permissible activities of national trust banks (previously discussed here), its 2021 Interpretive Letter 1176, and the conditional approval of a cryptocurrency company's national trust bank charter. According to the trade association, these actions improperly expand the OCC's chartering authority and allow cryptocurrency companies to offer financial services without complying with certain requirements applicable to traditional banks. Specifically, the complaint alleges.

Read more at Sheppard

Payliance enables organizations to streamline

payment acceptance, minimize processing costs,

and reduce the risk of fraud.

Banks Turn to Outsourcing as Digital Wealth Modernization Lags, Saxo Study Finds

Only 28% of respondents rated their wealth management and brokerage capabilities as advanced, while 43% described them as fairly advanced, indicating that some personalisation and digital integration were in place but that transformation remained incomplete.

Ageing technology infrastructure is one of the main obstacles. Respondents said their core wealth and brokerage technology was 6.7 years old on average, rising to 7.5 years at institutions that managed these capabilities entirely in-house.

Read more at CrowdFundInsider.com

The Housing Shortage Is a Major Driver of Poverty

New research identifies states where solving the housing shortage would significantly reduce poverty

Housing costs are usually the largest item in a household’s budget and can determine a family’s financial stability. In the United States, a housing shortage estimated at 4 million to 7 million homes has driven rents so far above historical norms that these costs have become a significant cause of poverty. Zachary Parolin, a professor at the University of Oxford in England, examined 2023 housing costs in the U.S. and identified the states (counting Washington, D.C., among them) where the greatest share of poverty is attributable to high rent. They are Hawaii, California, D.C., New Jersey, Massachusetts, Colorado, Maryland, Connecticut, New York, and New Hampshire.

This analysis by The Pew Charitable Trusts explores Parolin’s work and examines the ways housing supply and costs affect poverty. As cities and states move to address high housing costs and increase supply through changes to zoning codes, building codes, and permitting processes, a key question is who will benefit from those changes.

Read more at The Pew Charitable Trusts

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Washington, D.C. bans medical debt from credit reports By Ballard CFS Group 

Legislation that prohibits a health care provider or debt collector from reporting medical debt to credit reporting agencies has become law in Washington, D.C.

The legislation became law without the signature of Mayor Muriel Bowser, who said she supported the medical debt provisions, but opposed some unrelated provisions.

Among other things, the law:

Prohibits a health care provider or debt collector collecting on a medical debt from:

Garnishing of wages for those patients with a household income below 500% of the federal poverty level.

Read more at Ballard Spahr L.L.P. 

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