Credit cards, auto loans and other personal loans are all getting easier to come by, more than a year into a pandemic that spooked lenders and caused them to tighten lending standards significantly.

The net share of banks that loosened underwriting standards for credit cards hit a high in roughly the first quarter, according to a survey of loan officers conducted by the Federal Reserve. The net share of banks relaxing underwriting on other consumer loans such as installment loans also notched a record. For auto loans, that share was the highest level in more than eight years.

For example, about 29% of banks eased their underwriting standards for credit cards in the first quarter, and only 2% tightened them, according to the Fed. About 19% of banks loosened auto underwriting, while less than 2% tightened standards.

Several states, including Illinois and Nebraska, recently put in place restrictions that cap interest rates at 36% on consumer loans, including payday loans. 

Advocates claim these restrictions protect consumers from getting in over their heads with these traditionally high-cost loans, but opponents maintain that these types of laws will reduce access to credit by forcing lenders out of business with unsustainable rates, leaving people nowhere to turn when they’re short on cash.

New research published Monday seems to indicate that while these 36% rate caps may be well-intentioned, a different approach may actually have a greater impact on reducing the number of Americans who get caught in a so-called “debt trap” where they struggle to pay back the loan. 

Consumers may be best served by rules that require lenders deny borrowers any new loans for a 30-day period after they’ve taken out three consecutive payday loans, the report finds. About 90% of the borrowers surveyed said they wanted extra motivation to avoid payday loan debt in the future, and this system would provide that without immediately limiting access to credit. 

Overdraft fees are a silent but costly aspect of personal finance. The most recent Forbes Advisor Checking Account Fees Survey found the average overdraft fee is $24.38, with traditional brick-and-mortar banks charging the highest fee compared to other banking institutions.

But what’s most striking about overdraft fees is that they are disproportionately shouldered by those who can least afford them. The 2021 FinHealth Spend Report, an annual report that gauges the financial health of American households, found that costs related to everyday financial services are hurting low and moderate-income Americans the most.

Overdraft banking fees, specifically, cost consumers $12.4 billion in 2020. Though it’s a decrease from the authors’ findings of overdraft fees totaling $17 billion in 2018, it’s still steep. Stimulus payments, combined with reduced expenses, may have contributed to the decline.

After a brutal year, American small businesses are poised to take advantage of the end of the pandemic and the associated pent-up consumer demand. Many small businesses are looking to scale up to leverage this opportunity by taking out loans to increase supply and capacity. Access to credit will allow small businesses to capitalize on this moment and help lubricate the broader economic recovery.

Yet Congressional Democrats threaten to significantly reduce credit availability by voting to overturn President Trump's "true lender" rule via the Congressional Review Act as soon as this week. (The CRA allows Congress to spike recent executive orders through a simple majority vote.) This attack on access to capital is part of Democrats' broader war on small businesses -- an assault that includes massive new tax increases and onerous regulations like a $15 federal minimum wage.

Last October, the Trump administration finalized its true lender rule, defining the regulatory requirements and compliance obligations between banks and third-party lenders. It clarifies that banks are generally the real lenders when they partner with intermediaries to offer loans. The order is needed to harness and provide regulatory certainty for the growing number of app-based lenders that make up the fintech revolution. In January, nearly 50 economists and financial scholars noted that reversing this rule would hurt secondary lending markets and reduce access to credit.

While the idea of offering banking services at post offices continues to excite progressives in Congress, it probably will not appeal very much to its intended customer base if implemented. It is hard to imagine unbanked millennials flocking to their local post office to check their balances and cash checks in today’s digital world.

Senators Kirsten Gillibrand (D., N.Y.) and Bernie Sanders (I., Vt.), along with three House members, are hoping to include postal-banking pilots in the Fiscal Year 2022 budget. In announcing the plan, Gillibrand said:

Mainstream financial institutions and predatory lenders often take advantage of underbanked Americans with high fees and interest rates that keep them in a cycle of poverty. As families across the country try to recover from the economic crisis, establishing postal banking pilot programs would ensure these communities have financially safe and reliable banking services . . . Expanding basic financial services at post offices in both rural and urban communities would help families who know just how expensive it is to be poor in America. This pilot program takes important steps to help struggling Americans and reintroduce widespread postal banking.

COLUMBUS, Ohio – May 14, 2021 – (Newswire.com) Advance America is now partnering with LoanCenter to offer title loans in Missouri. Borrowers in St. Louis now have access to LoanCenter title loans at Advance America store locations and online at AdvanceAmerica.net.

Borrowers can get a LoanCenter title loan up to $25,000 based on their vehicle’s value, with rates as low as 36% APR on loans over $5,000.

An overwhelming majority of Americans report having some kind of debt, and the number has been increasing in the past year, according to a new survey. While that phenomenon is reported across all age ranges, there are some notable generational differences.

A new GOBankingRates survey shows that 78.12% of respondents reported having debt in 2021, compared to 71% in 2019.

A key finding of the survey notes that Gen X – people born between 1965 and 1980 – is the generation both leading for the largest debt and the largest percentage of the generation carrying debt.

Indeed, the survey shows that 86.07% of Gen X respondents say they currently have some debt. In addition, Gen X also has the most respondents saying they are $60,000 or more in debt, at 19.30%, and more than 56.01% have $10,000 or more in debt.

Consumer debt edged higher during the first three months of 2021, due primarily to a jump in mortgages and auto loans, the Federal Reserve reported Wednesday.

Total household debt balances rose by $85 billion in the first quarter, a 0.6% increase that brought the total level to $14.64 trillion.

Fueled by low rates and a red-hot housing market, mortgage debt swelled in the period by $117 billion, or about 1.2%, to $10.16 trillion, according to the New York Fed’s quarterly Report on Household Debt and Credit. Auto loans increased by $8 billion, to $1.38 trillion, while student debt balances rose by $29 billion to $1.58 trillion, even though many loans are in forbearance granted during the coronavirus pandemic.