Consumer lending

Lenders are cautioning not only that second-quarter provisions might exceed the spike seen earlier this year, but also that credit costs could be elevated into 2021 if the economic slowdown drags on or fears of a second coronavirus wave are borne out.

Leaders of companies including Citizens, Comerica and Truist offered more upbeat assessments of loan demand and credit quality than they have in recent weeks. But others warned of weakness in key sectors such as energy and real estate, and said forbearance policies may be hiding potential pitfalls.

An interagency notice meant to encourage lenders to offer small consumer loans also provides federal agencies too much say on what constitutes “reasonable” pricing.

European authorities have told banks for the first time to take account of environmental risks in lending decisions, ramping up pressure on the financial industry to respond to climate change.

The templates are meant to make it easier to obtain agency approval for small-dollar loan products and to accommodate mortgage servicers that want to provide online loss mitigation options.