Consumer financial stress rises as Americans take on more debt, new data shows

LAS VEGAS (KSNV) — Financial stress on American consumers is continuing to build as rising costs push more people into debt, according to new data released Thursday by Money Management International.

The nonprofit credit counseling organization said average unsecured debt among its clients reached $40,200 year-to-date, a 4.8% increase from 2025.

Delinquencies are also worsening. Money Management International reported that 25% of its clients have at least one delinquent account, and said debt delinquency rates are more severe than they were six years ago.

The organization also pointed to a shift in who is seeking help. Gen Z is its fastest-growing client group, up 31% year-over-year.

Read more at News3LV

More consumers intend to use buy now, pay later services for holiday purchases

Buy now, pay later services, which allow buyers to pay for purchases in installments, are becoming increasingly popular — even for basic needs like groceries.

Households often take on additional debt as they up their spending over the holidays. Buy now, pay later is poised to be an increasingly popular method for making those holiday purchases, according to new research.

Roughly half of those surveyed by the consulting firm TSG say they’ll use buy now, pay later this holiday season, according to Kelly Prange, an analyst with TSG.

“Twenty percent are planning to use it more often than last year, compared to 9% who are using it less often than last year,” she said.

Read more at MARKETPLACE

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How Machine Learning is Reshaping US Fintech Markets as Digital Transformation Ramps Up

The rise of machine learning is having a transformative impact on US fintech and financial services, forming a driving force in shifting operations from rigid, rules-based logic to more adaptive, data-driven intelligence.

As a critical subset of artificial intelligence, machine learning (ML) is already enhancing the capabilities of finance technology leaders.

Data suggests that the global AI in the fintech market size was valued at $36.96 billion in 2025 and is projected to grow to $241.67 billion by 2034, with a CAGR of 23.20% over a nine-year period.

Read more at Finextra.com

Fed loses debit card cap appeal

The Federal Reserve’s debit card interchange rule doesn’t follow the intent of Congress in setting a limit for swipe fees, an appellate court ruled Monday.

The Federal Reserve has improperly determined rules for setting a fee cap on debit card transactions, a federal appeals court ruled Monday in vacating the central bank’s current 21-cent fee limit.

The decision by a three-judge panel of the Eighth Circuit U.S. Court of Appeals – which backed a lower court ruling from last year – represented a victory for merchants that have battled payment card swipe fees for years.

Plaintiffs alleged that the Federal Reserve System Board of Governors should have set a debit card interchange standard that considers only an issuer’s marginal costs for a transaction, not the fixed expenses that come with its overall business.

Read more at Payments Dive

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Why Lenders Should Plan for Today’s and Tomorrow's CFPB — The Consumer Finance Podcast

In this episode of The Consumer Finance Podcast, host Chris Willis is joined by Stephen Hayes, co-managing partner of Relman Colfax, to discuss targeted digital advertising, an unsettled area of fair lending. They examine where nonmortgage lenders stand today and under a future administration, the drift of ad models into underwriting and pricing, lessons from Fair Housing Act cases and settlements, and the potential application of disparate impact to ad delivery. They also cover the Consumer Financial Protection Bureau's (CFPB) 2026 Reg B revisions limiting discouragement and guidance for lenders to build marketing compliance, all through a lens of unfair, deceptive, or abusive acts or practices (UDAAP) and surveillance pricing.

Read more at JD Supra, LLC

Settling cross-border payments remains tough

Global payments are moving faster, but local settlement remains a pain point for many companies, according to speakers on a Money20/20 panel.

Dive Brief:

• Settlement of a cross-border payment at its destination remains a pain point across the industry, despite improvements in rails, speed and interoperability among players, payments executives said last week in a panel discussion.
• The last portion of a cross-border payment accounts for 80% of the total speed of a transaction, regardless of the payment rail or instrument that is used, said Leigh Amaro, Americas CEO for Swift, the digital financial messaging firm for international payments. Amaro spoke about how cross-border payments are evolving on Oct. 20 at the Money20/20 financial technology conference in Las Vegas.

Read more at Payments Dive

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Is It Too Late for Banks to Fend Off the Fintech Threat? Almost, But Not Quite

As I look at the landscape for banking in 2026, I see regulatory changes reshuffling the competitive deck, coupled with new technologies, new fintechs and the unknown impacts of AI. For me, it conjures up images of dinosaurs at the end of an era, looking up at the sky clouded by an asteroid, wondering what will happen next while an inevitable end is in sight.

The dinosaurs couldn’t change their situation; banks absolutely can. It’s not too late, but the situation is urgent.

For all the talk to date of community and regional banks getting disrupted by newcomers, the impact of the fintech era on these banks has looked more like slow erosion. Community banking net income and interest margins are as high as they’ve been since 2018.

Read more at The Financial Brand

AI-driven embedded lending emerges as digital finance option

In this podcast, Yaacov Martin, CEO of embedded lending vendor Jifiti, explains how AI makes online credit efficient, accurate and profitable and why regulation fosters growth.

Buy now, pay later (BNPL) is an increasingly common option on retail payment terminals and e-commerce sites. It’s part of the growing category of embedded finance that is changing how consumers and businesses access financial services – and how banks and merchants offer credit -- by making them available in non-financial applications.

Now AI is starting to transform BNPL and other types of online lending by handling the many steps of credit approval, including identity verification, decisioning -- analyzing creditworthiness and deciding whether to lend -- regulatory compliance checks and e-signatures. 

Read more at Tech Target

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.

This Month in FinTech: October 2026

This month’s FinTech Magazine highlights feature companies including AWS, Mollie, GoCardless, BNP Paribas, BNY, HCLTech and highlights from Money20/20 USA

Money20/20 USA: Mastercard Unveils Stablecoin Security

At Money20/20 USA, Mastercard announced a new partnership with Borderless.xyz and Keyrails to make stablecoin payments safer.

Its Stablecoin Security solution helps financial institutions spot fraud, scams and sanctions risks before transactions go through.

Read more at Fintech Magazine

States’ Rainy Day Fund Capacity—and With it, Their Fiscal Flexibility—Continues to Decline

For the second year in a row, states’ rainy day fund capacity—the number of days that reserve balances could cover state operations—fell from its all-time high, reached in fiscal year 2024. At the end of fiscal 2026, the median state could run on its rainy day fund balances alone for 47.9 days, down from 49.1 days in fiscal 2025 and 54.5 in fiscal 2024, according to states’ own estimates reported to the National Association of State Budget Officers (NASBO). The back-to-back declines mark a notable shift after years of growth and are the first consecutive years of contraction not tied to a recession since at least fiscal 2000. Although most states still have near-record reserve balances, growing budget pressures could place greater demands on their already shrinking capacity.

Beneath that overall trend in rainy day fund capacity lies considerable state-by-state variation, driven by differences in state balances and spending levels. Capacity rose in 15 states in fiscal 2026, 12 of which reported higher balances. This marks a decrease from the previous year when 24 states increased their reserve capacity. Of the remaining 35 states, 14 drew on their reserves, 15 had balance growth that was outpaced by rising expenditures, five maintained flat reserves as expenditures grew, and one recorded no change in capacity.

Read more at PEW

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Three Ways to Jumpstart Troubled Borrowers’ Debt Repayment Efforts

In a recent survey, one-third of more than 1,400 low- to moderate-income SaverLife members described their debt as unmanageable. Yet, a lack of awareness of debt management tools wasn’t the factor holding them back from seeking help. Nearly three-quarters knew about debt-management resources, but few were actually using them, mostly because of distrust.

That disconnect captures a challenge for financial institutions. The industry has spent years giving people more information about debt: calculators, educational content, repayment strategies, credit monitoring, and increasingly sophisticated digital tools.

Read more at The Financial Brand

Settling cross-border payments remains tough

Global payments are moving faster, but local settlement remains a pain point for many companies, according to speakers on a Money20/20 panel.

Dive Brief:

• Settlement of a cross-border payment at its destination remains a pain point across the industry, despite improvements in rails, speed and interoperability among players, payments executives said last week in a panel discussion.
• The last portion of a cross-border payment accounts for 80% of the total speed of a transaction, regardless of the payment rail or instrument that is used, said Leigh Amaro, Americas CEO for Swift, the digital financial messaging firm for international payments. Amaro spoke about how cross-border payments are evolving on Oct. 20 at the Money20/20 financial technology conference in Las Vegas.

Read more at Payments Dive

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.

Fed leaves rates unchanged: What it means for credit cards, mortgages, auto loans and savings accounts

Key Points

• The Federal Open Market Committee decided to keep the benchmark interest rate in a range between 3.75% and 4% at the conclusion of its October meeting.
• The central bank’s benchmark rate influences a wide range of consumer borrowing and savings costs.
• As long as the Fed keeps rates elevated, consumers are unlikely to see much relief from the high prices and higher borrowing costs that continue to weigh on household budgets.

Read more at CNBC

For Financial Institutions, Effective AI Implementation Requires a Scalable Foundation

An emerging lesson of AI adoption is that progress is rarely linear. Whether for an individual enterprise or an industry, it comes in bursts, and each new milestone requires internal and external users to recalibrate their trust.

Few sectors feel this as keenly as small to midsized financial institutions. Operating under strict regulatory oversight and tight margins, banks and credit unions face both rising competitive pressure to deploy AI applications and persistent resistance from the customers they serve and the stakeholders responsible for risk and regulatory oversight.

Read more at The Financial Brand

LEND360 was a Great Success! 

Our 2026 LEND360 Conference was a Great Success!

We had a record number of attendees, including record numbers of CEOs and lenders. Networking was king with a record number of meetings booked through our LEND360 platform combined with numerous additional opportunities for participants to make that next connection. The content was incredible, too.

Highlight speakers included Wade Arnold of Moov, Naftali Harris of SentiLink, Sherrie Rees of First Electronic Bank, Jer Woods of Block, Rodney Williams of SoLo Funds, Manoj Verma of TabaPay, Sarah Hartung of Old National Bank, Meredith Winegar of

Old National Bank, and famed political commentator

Karl Rove.

We had over 20 focused content sessions that addressed key issues facing our industry using the expertise of our 100+ speakers to give participants concrete takeaways. 

We extend a special thank you to the 90+ sponsors (including a sold-out exhibit floor)

that made this show possible. We are already working to make next year’s show even better and look forward to seeing everyone at the

2027 LEND360 event in Chicago on October 4-6.

Banks Leave Millions on the Table by Not Plotting Customers’ Forward Motion

Bank checking relationships have multiplied, with the average customer now holding two or more, up 47% since 2019. Fintechs who historically catered to the paycheck-to-paycheck segment are entering the rewards and loyalty space for the mass market, and competing harder for primacy with competitive offers. Meanwhile, traditional bank loyalty constructs are still offered only to customers who qualify today.

For a bank with a million retail customers, Curinos estimates the traditional snapshot view of qualifying tiers could leave an estimated $640 million in deposits on the table compared to achieving top-quartile retention and average balances with these customers. That’s because it can’t see which customers are gaining momentum and which have already stalled.

Read more at The Financial Brand

Small Business Cards are the Next Battleground for Cardmember Growth

Credit cards are crucial to small business operations. According to J.D. Power’s 2025 U.S. Small Business Credit Card Satisfaction Study, 89% of small business owners have used a credit card for a recent business purchase. That makes a business credit card a daily touchpoint, and smaller institutions can grow relationships with these small business owners through checking and savings accounts, treasury services, and lending.

But community banks and credit unions often underdevelop their business credit card programs. It’s a missed opportunity, especially when many already have a relationship with business owners on the personal side.

Need to Know:

Small businesses run on cards. 89% of small business owners have used a credit card for a recent business purchase.

Read more at The Financial Brand

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New York City Proposes Sweeping Rules for Automated Customer Service Systems, Including Mandatory AI Disclosure and Access to Human Representatives By Alan S. Kaplinsky & John L. Culhane, Jr.

On October 20, 2026, the New York City Department of Consumer and Worker Protection (DCWP) proposed rules regulating automated customer service systems, including AI-powered chatbots, traditional automated telephone systems, and rules-based chatbots. The proposal would require businesses to disclose at the outset that consumers are interacting with an automated system, provide specified means of accessing human assistance, maintain detailed compliance records, and avoid misleading representations about customer service availability. “Customer service” means assistance by a merchant to a consumer, in response to an inquiry from such consumer, regarding a product, service, account, refund, billing matter, complaint, cancellation request, fraud claim, or dispute in relation to the sale or purchase of a good or service. Businesses could not avoid responsibility for unlawful conduct by attributing it to technology.

The proposal could significantly affect banks, nonbank financial services companies, retailers, and other businesses serving New York City consumers. Its scope extends beyond generative AI to automated systems generally and may reach businesses outside the city that communicate with city residents. Questions remain regarding potential federal preemption for national and state-chartered banks.

Read more at Ballard Spahr L.L.P.

AI is transforming lending, but what could it miss?

AI is giving financial services a far richer picture of a business’ background and future trajectory giving more insights and flexibility to enable the automation of credit assessments. But it’s important that the distinctions between what’s possible to automate and what should be automated are clearly set out.

Historically, lending decisions have relied heavily on relatively static information: credit history, income, assets and financial performance. Today, open banking and emerging finance models provide a much more dynamic view of businesses, including cash-flow and transaction data.

This matters because AI can process vast amounts of information, structured or unstructured, in seconds, identifying patterns and potential risks that would take considerably longer to assess manually, whilst also highlighting new growth opportunities that would otherwise go unnoticed.

Read more at Finextra.com

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