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Discussion Paper
FinTech-Issued Personal Loans in the U.S.
The financial technology advances of the past decade brought to prominence a new group of lenders active within the personal loan space—financial technology (FinTech) lenders. Although traditional lenders such as banks, thrifts, credit unions, and finance companies continue to play an important role in providing personal loans to consumers, FinTech lenders gained a notable market share.
Newsletter
Promise and Peril: Managing the Uncertainty of Rapid Innovation and a Changing Economy
The Chicago Fed?s Supervision and Regulation Department and DePaul University?s Center for Financial Services held their tenth annual risk conference on March 29?30, 2017. The conference brought together financial industry professionals, academics, and regulators to discuss the rapid pace of technological innovation in financial services, as well as the uncertainty of the changing economy through the lens of risk management.
Journal Article
The Future of Money and Its Implications for Society, Central Banks, and the International Monetary System
This new wave of financial innovations has broad implications for society, banking, and central banking: Digital platforms can ease entry for financial services providers, increase transactional efficiency, and widen access to and participation in the financial system. They could also decrease the use of cash and alter the U.S. dollar's role as today's vehicle currency.
Journal Article
The Fintech Revolution in Banking
As financial technology—fintech—continues expanding, traditional banks continue to expand their online services to attract and retain customers.
Report
President's Message: Importance of Studying Innovations in Payment Technologies
For several years, economists at the St. Louis Fed have been studying innovations in payment technologies such as cryptocurrencies and blockchain.
Discussion Paper
Meet People Where They Are: Building Formal Credit Using Informal Financial Traditions
The Consumer Finance Institute hosted a workshop in February 2019 featuring José Quiñonez, chief executive officer, and Elena Fairley, programs director, of Mission Asset Fund (MAF) to discuss MAF’s approach to helping its clients improve access to mainstream financial markets. MAF’s signature program, Lending Circles, adapts a traditional community-based financial tool known as a rotating savings and credit association (ROSCA) to help establish or expand credit reports for participants who may not be able to do so through traditional means. Lending Circles have served more than 10,000 ...
Working Paper
Financial Technology and the 1990s Housing Boom
The 1990s rollout of mortgage automated underwriting systems allowed for complex underwriting rules, cut processing time and raised house prices substantially. We show that locations exposed to initial adopters of Freddie Mac’s Loan Prospector system experienced an early housing boom due to a switch to statistically-informed underwriting rules. Loan Prospector adoption increased lending at high loan-to-income ratios by around 18 percent. Applying our estimated response to lenders who adopted later, we find that the rollout of new lending standards with the GSEs’ systems can explain more ...
Regulated Payment Stablecoins Become a Reality in the U.S.
An article that first appeared in The Arkansas Banker discusses stablecoins and the regulatory framework signed into law this summer that provides for their issuance and transaction.
Working Paper
Automated Underwriting and Housing Market Dynamics
We study how the 1990s adoption of now widely-used automated mortgage underwriting systems affected credit supply, house prices and their comovement across locations. The effects go well beyond processing improvements. By implementing more complex, statistically-informed lending rules, the systems allowed households to borrow more, pushing up house prices. Furthermore, by transmitting a common set of credit standards across lenders, the new technology increased credit and house price synchronization. Together, our results illustrate how new lending technology can generate correlated credit ...