“Go Vertical: The Urgent, New Growth Strategy for Community Banks”
To counter the threats of rising interest rates, regulatory compliance, and fintech competition, community banks need new growth models. Targeting affinity groups like military families or healthcare professionals can build stronger customer relationships, lower risks, and boost margins, this article says.
“Invasion of the Job Snatchers: Digital Bank Workers Have Arrived”
AI “agents” are already taking on coding and payments, and before long, they’ll be handling customer interactions. To preserve community banking’s relationship-driven advantage, institutions must prepare data systems and use qualitative customer feedback to train AI on empathy, one expert says.
“As Crypto Trust Applications Grow, So Do Banks’ Objections”
Banks warn that OCC trust charters for crypto and fintech firms would allow them to compete with deposit-taking institutions without FDIC insurance or full oversight, potentially putting consumers at risk and draining deposits from community banks. Fintechs, meanwhile, counter that the charters promote competition and innovation.
“Why Deposit Profitability, Not Deposit Volume, Should Be Your Goal”
In the early 2000s, Countrywide demonstrated how easy it was to build deposits by overpaying for CDs. But that strategy proved unsustainable during the Great Financial Crisis, underscoring that disciplined, low-cost deposit gathering wins in the long run—a lesson that still applies today.
“Fed Nixes Novel Activities Supervision Program”
The Fed scrapped a two-year-old program designed to oversee banks’ crypto and fintech activities, claiming it had gained sufficient expertise to fold that oversight back into its standard supervision process. Industry groups backed the move but urged the Fed to continue training examiners on emerging technologies.
“FDIC Would Give Banks Flexibility on Digital Signage in Proposed Rule”
The FDIC proposed simplifying a 2023 rule governing how banks display the agency’s digital sign and nondeposit disclosures on websites, apps, and ATMs.
“Trump Considers Firing Fed Official After Accusation of Mortgage Fraud”
President Trump demanded Fed Governor Lisa Cook resign after FHFA Director Bill Pulte accused her of mortgage fraud for claiming two different homes as her primary residence in mortgage applications filed days apart. Cook responded that she wouldn’t be “bullied” into resigning, that the applications in question predated her role at the Fed, and that she intends to answer any legitimate questions about her financial history.
In Other News
Reports suggest overuse of artificial intelligence may be linked to psychosis, the WSJ mapped child care costs across America (spoiler alert: they’re staggering everywhere), and if you aim to spend the final days of summer at an East Coast beach, you may want to think twice about taking a dip.
Thanks for reading.