A letter from Jamie Dimon, FICO vs. fintechs on who’s a black box, and why we might not need Federal Home Loan banks anymore
American Banker
In-depth analysis, perspective and commentary on key issues affecting the banking industry.
Why do we still have Federal Home Loan banks? With deposit levels rising, some are wondering why these backstop institutions exist anymore. Others are asking the same question about the FICO score, a measure of an individual’s creditworthiness that some (including competitors) have accused of incorporating bias. But FICO’s CEO tells us that he’s working to make his company’s credit scores more transparent and accurate. Scroll through for more of today’s news in banking, fintech and payments.
JPMorgan Chase’s longtime chairman and CEO used much of his annual letter to shareholders, which was published Monday, to issue warnings about various risks ahead.
As banks rack up record levels of deposits, the Federal Home Loan banks' core business of providing liquidity to member institutions is drying up, leading some critics to question the institutions' long-term viability.
When regulators recently accused AI-based lending software companies of creating “black boxes,” the fintechs pushed back. Fintechs and consumer advocates say the classic FICO credit score and banks’ traditional loan underwriting programs based on it are not transparent and keep already underserved people shut out of mainstream credit.
Cardlytics is responding to pandemic market changes by adding new capabilities from some fintechs it acquired over the past year, while building a path to expand the types of offers available to bank customers.
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“The federal government has abandoned its mandate to charter and insure the deposits of de novo mutuals. This has created a void in banking services in many of the communities that need them the most,” writes regulatory lawyer Douglas P. Faucette.
In her new role, Robyn Luhning leads the bank’s climate plans and oversees its sustainable financing institute, which includes environmental philanthropy and advocacy efforts, the company said Monday.
The $6.5 billion-asset credit union announced that Ryan Goldberg, who was most recently chief revenue officer for the $3.4 billion-asset Alerus Financial Corp. in Grand Forks, North Dakota, assumed the roles of president and chief executive on March 28.
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