FRB-Cleveland Study: Banks are Better Small-Business Lenders Than Fintechs

Using data from the 2021 Small Business Credit Survey, a new Federal Reserve Bank of Cleveland study concludes that small businesses that made use of online lenders were less satisfied with their experiences and more likely to report high rates and unfavorable repayment options than those that used banks.  The study also found that online lenders were less likely than banks to approve the full extent of financing, noting that this was not the case prior to the pandemic.

Fed Gives Guarded Guidance re Crypto Activities

The Federal Reserve Board today released a supervisory letter requiring state member banks to obtain prior approval before commencing cryptoasset-related activities and to ensure that appropriate internal controls are in place in order to do so.  This letter comes a day after the board announced its new payment-system access policy and is likely intended to make it clear that activities in or out of FDIC-insured banks related to cryptoassets will not get the free pass some fear.

Toomey Presses for FDIC-Authorized Crypto Activity

Sen. Toomey (R-PA) sent a letter today to acting Chairman Gruenberg alleging that the FDIC has instructed FDIC regional offices to send letters to multiple banks requesting that they refrain from expanding relationships with crypto firms without any legal basis, citing multiple whistleblower complaints.  He asks that Mr. Gruenberg provide any communications that the Washington office has had with FDIC regional offices on the subject by August 30.