After budget cuts and a strategic transition, the interagency body conceived by Dodd-Frank to identify systemic threats has largely been silent as the pandemic roils the economy.
Refinancing activity is surging, existing borrowers are inquiring about loan modifications, loan closings are being delayed by more complex credit checks — and banks are short on people to handle it all.
State Farm struggled to make its bet on banking pay off and decided like other insurers to exit the business. U.S. Bancorp swooped in to add deposits and credit card accounts at little cost or risk.
Lower rates and more nonbank competition will make it harder for banks to keep loans on their books as business borrowers have plenty of opportunities to refinance elsewhere.
Despite changes by the Federal Housing Administration, bankers remain reluctant to join the program for fear of legal liability. But that could change if it revamps servicing processes, experts say.
California Gov. Gavin Newsom plans to ask the legislature to revamp the current Department of Business Oversight and rename it the Department of Financial Protection and Innovation, modeled after the federal CFPB.
