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FDIC: Bank Loans Soaring, Risk-Taking Begins

Banks in the U.S., trying to fight back revenue declines, “boosted lending in the second quarter at a pace unseen since the financial crisis,” according to an FDIC report, the Wall Street Journal is reporting.

“The Federal Deposit Insurance Corp. said banks’ loan and lease balances rose to $8.11 trillion, a 2.3 percent increase over the first quarter of 2014 and the largest quarter-over-quarter jump since the end of 2007,” the Journal reported. “It was the first time U.S. bank lending has topped $8 trillion, as banks boosted construction loans, agriculture loans, credit-card balances and auto loans. Mortgage lending also was up compared with the first quarter but down from the year-ago period, reflecting a retreat from that market by some banks amid new regulatory and legal risks.”

The story quoted FDIC Chairman Martin Gruenberg saying that this is a crucial development, as banks tried to transition from a slow and painful recovery to a period of more aggressive risk. “We are moving into a different stage of the financial and economic cycle,” the story quoted Gruenberg saying. “The industry, I think, is well positioned, having strengthened its balance sheet to respond to increasing credit demand, but that changing environment is going to carry risks and challenges for the industry as well.”

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New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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