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According to the Federal Reserve's May-issued report, the rising prices of assets in the stock market and elsewhere are posing significant threats to the fiscal system. This report analyzes conditions that affect how stable the financial system is by reviewing vulnerabilities that affect valuation pressures, borrowing by households and businesses, funding risk, and financial leverage. It also highlights near-term hazards that could interact with these vulnerabilities if they're realized.
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Smaller banks have been a huge contributor to PPP loans over the past few months, but growth in balance sheets puts them over asset thresholds that would place them under greater scrutiny. But federal regulators are offering relief.
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The OCC has issued its final rule surrounding the "valid-when-made" principle and is clearing up uncertainties regarding which financial institution is considered the true lender in terms of bank-fintech partnerships.
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Credit unions find themselves in a unique position these days. They are experiencing record or near-record amounts of deposits from customers. This seems like wonderful news until you hear that they are also experiencing decreasing profits at the same time. How is this even possible? There are a number of reasons for a loss, including declining loan production, decreasing membership, and an aging of existing membership. This is why it's the time for credit unions to form strategic partnerships with companies that can help them regain their footing in the loan and membership acquisition business. 
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Investors and the stock market as a whole did not seem to be fully prepared for the announcement from the Federal Reserve on Wednesday, June 16, 2021 that it would begin to reduce its levels of bond purchases and add some interest rate hikes to its forecast for 2023. In fact, the previous forecast from the Federal Reserve had zero anticipated rate hikes in 2023, but their most recent outlook called for two in that year. The US dollar jumped against all major currencies on the news, but the stock markets got a lot choppier as a result. CNBC reported on the response from one investment officer as such: 
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The COVID-19 pandemic has had devastating effects on many people and companies. Ordinarily, in a crisis, you would expect banks to extend more loans to cash-strapped consumers.  However, the actual situation is different. The total loans extended by banks have dwindled while the banks' deposits have increased significantly.
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With decreased spending opportunities due to the pandemic, consumers have lowered their expenses and continue to pay down debt. Unfortunately, this is making it difficult for banks and credit unions to support loan growth and earnings, which warrants the need to add loan growth through high-quality performing portfolios.
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There comes a time in every economic cycle when it is relevant and prudent to review the assets on one's books and determine which assets should stay and which should go. The economy is so turbulent at this time that it is the perfect moment to contemplate the relevance and profitability of various assets to try to remain financially solvent and thriving. Many banks are active in the process of reviewing their books as we speak, and they are surely contemplating the necessity of offloading some of their underperforming assets. Fortunately for the banks, right now is the ideal time to be in the market for selling off certain assets that might be underperforming or otherwise causing a drag on the balance sheet. There is a lot of capital ready to go to work purchasing up some of these less than ideal assets. We want to take a look now at some intricate economic factors at play and how banks can best position themselves going forward.
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Home prices have increased over recent months thanks to a busy nationwide real estate market despite the coronavirus pandemic. This has led to a strong mortgage market, making now a good time to sell off mortgage portfolios that are not strategic or ideally performing.
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Banks have added a lot to reserves and have seen relative stability in loan charge-offs. So far, banks seem to be weathering the pandemic quite well.
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