Loans to subprime borrowers have reached the highest level since the start of the financial crisis, driven by a boom in auto lending and a new crop of companies extending credit. Almost four of every 10 loans for autos, credit cards and personal borrowing in the U.S. went to subprime customers during the first 11 months of 2014. That amounted to more than 50 million consumer loans and cards totaling more than $189 billion, the highest levels since 2007. Car loans account for most of the increase, totaling $129.5 billion during the first 11 months of 2014, 68% of consumer subprime-loan volume. Americans are also willing to take on more debt; a Federal Reserve Bank of New York report showed total household debt increased $306 billion, or 2.7%, in the fourth quarter of 2014 from the year-ago period, to the highest level since the third quarter of 2010.
A hacker group has stolen as much as $1 billion from banks and other financial companies worldwide since 2013 in an unprecedented cyber-robbery, according to a report by computer security firm Kaspersky Lab. The gang, Carbanak, has targeted as many as 100 banks, e-payment systems and other financial institutions in 30 countries and is still active. The criminals infected bank employees’ computers with malware, which then spread to internal networks and enabled video surveillance of staff. That let fraudsters mimic employee activity to transfer and steal money. The gang also used access to banks’ networks to seize control of ATMs and order them to dispense cash to henchmen. Detailed information about the investigation can be found in this blog post and Kaspersky's full report.
City lawmakers in Santa Fe, N.M. have revived debate over public banks with a proposal to form a municipal bank that support affordable housing efforts and lending to the underbanked. And, perhaps for the first time, some bankers are interested -- if the initiative will help them make more loans. Previous public banking proposals, many modeled after the Bank of North Dakota, have rarely made it past the drawing board. But public banking advocates hope that smaller municipal banks might be easier to realize. The Santa Fe City Council last month approved a feasibility study to look into a municipal bank. The primary goal is to form partnerships with local banks to expand lending to residents who are "on the marginal side" of being creditworthy, said Santa Fe Mayor Javier Gonzales.