The Private Credit Market has emerged over the last year as a big potential risk to the U.S. banking system. What are the main risks from this newer segment of the lending market? This episode examines four main risks. 1) Banks could experience direct losses from loans secured by private credit funds, i.e. NDFI lending. 2) Banks could lose their largest loan segment. Lending to NDFIs has become big banks #1 lending category over the last few years. 3) Banks will no longer be able to pass bad deals onto the Private Credit Market, SRTs anyone! 4) A contagion of delinquency leads to a drop in values. NAVs drop, real estate values drop, company value drops, leading to defaults, leading to bad loans, which leads to loan losses. This chain goes from company to Private Credit Fund back to originating bank. This episode examines an article from Bank Director titled “The real risk of Private Credit to banks.” A link to the article is included below.

Link: The Real Risks of Private Credit to Banks | Bank Director

This video is a clip from BND: Strategy Room Live Stream on August 2, 2026. BlackRock and Blackstone both removed private credit executives in July. BlackRock removes Phil Tseng, CEO of their private credit business development company (BDC). He was removed over company performance and an ongoing federal valuation probe. Jonathan Bock resigned from his position as Co-CEO of Blackstone’s BCRED and BXSL private credit funds. Bock also stepped down as Co-CEO of Blackstone’s Secured Lending Fund, which is Blackstone’s publicly traded BDC. Bock resigned over the performance of the private credit funds. Furthermore, Blackstone is partnering with Vanguard Group and Wellington Management to create two new private credit funds for individual investors. Goldman Sachs is launching a private credit collective investment trust to make investing in private assets available in 401(k) retirement plans.

The Banker Next Door (BND) weekly live stream show. Strategy Room provides financial news, commentary, top stories in the business world, economic indicators, and all things banking for the week.

Banking regulators have been approving a lot of bank charters recently and multiple types of charters at that. De Novo charter, Trust Charter, National Bank Charter, and ILC Charter, to name a few. While the OCC is approving charters that does not mean their standards for attaining approval have diminished. There has been a surge of Crypto, fintech, and digital asset companies applying for various types of bank charters and Federal Reserve Master Accounts. However, time might be running out. President Trump’s second term ends in January 2029 and midterm elections are coming up in November. If Republicans lose control of the House of Representatives to the Democrats, things could change quickly. There has probably never been a more favorable time to seek a bank charter, but how much longer will it last? This episode examined an article from Bank Director titled “Applicants race to secure national bank charters.” A link to the article is included below.

Link: Applicants Race To Secure National Bank Charters | Bank Director

There are 7 different types of check fraud. They include new account fraud, check kiting, dormant account fraud, counter check fraud, withdrawal fraud, deposit ticket fraud, and split deposit fraud. Which type is the most common? Which is the most invisible? Which is the most evolving? Which is the most targeted? What can banks do to combat check fraud? Banks have many tools at their disposal including Positive Pay, SARs, customer education, Federal Reserve tools, and employee training. This episode examined a blog post from PCBB titled “Seven Types of Check Fraud – and How to Combat Them.” A link to the blog post is included below.

Link: Seven Types of Check Fraud — and How to Combat Them

Bank News: First Financial buys Finward Bancorp in $208MM deal. Northrim BanCorp acquires PBCO Financial Corp in $167.3MM deal. Gesa Credit Union acquires Willamette Valley Bank. Mechanics & Farmers Bank will merge with Optus Bank. Upstart receives conditional bank charter from the OCC. Wise’s trust bank charter is rejected by the OCC over deficiencies. Former Bank of the Valley CFO, Aaron Luneke, sentenced to 36-month prison term for $4.3M loan scheme. Former TD Bank assistant store manager, Wilfredo Aquino, sentenced to prison for money laundering and fraud involvement. GOP lawmakers press the Fed to increase bank M&A approval timelines. Democrats grill new CFPB nominee, Brian Johnson, over his ties to Capital One and potential staff-cuts. This episode reviewed multiple articles from Banking Dive.

For the 2nd quarter of 2026, Community Banks saw some slight Net Interest Margin (NIM) compression, loan growth increased especially around C&I lending, underwriting tightened for C&I loans while CRE loans remained steady, and the deposit base remained sticky, but funding costs remain higher. There is a question now around the Federal Reserve and whether they will increase interest rates in the second half of 2026. This episode reviewed a blog post from PCBB titled “H2 2026 Outlook: Mixed Signals for Community Bank Earnings.” A link to the blog post has been included below.

Link: H2 2026 Outlook: Mixed Signals for Community Bank Earnings

What are the top regulatory ‘hot buttons’ for the banking industry? ICBA does a great job in covering the top regulatory concerns for the U.S. banking industry on a quarterly basis. Big issues currently include Digital Assets Regulatory Framework – the Clarity Act and the Genius Act, Farm Bill, Executive Order on Immigration Status, AI Executive Order, Deposit Insurance, 1033 Rule, Section 1071 Legislation, and Fed Master Account Access and OCC Trust Charter. Banks have additional concerns around fraud and credit unions buying banks. There have been some wins around legislation with the 21st Century Road to Housing Act and the Main Street Capital Access Act. This episode reviews ICBA’s Advocacy in Action for the 3rd quarter of 2026. A link to the PDF is included below.

Link: top-issues-2

This video is a clip from BND: Strategy Room Live Stream on July 25, 2026. What do surging bond yields mean for consumers? This past week the escalation of the military conflict with Iran sent treasury yields soaring, especially the 10-year and 30-year treasuries. The 10-year treasury has a direct impact on residential mortgage rates, auto loan rates, credit card rates, and student loan rates. As the 10-year yield increases, so do borrowing costs. Why is the 30-year treasury so important? The 30-year treasury is a gauge of sensitivity. It gives us an indication of how confident investors are that a government will be able to pay its debt.

The Banker Next Door (BND) weekly live stream show. Strategy Room provides financial news, commentary, top stories in the business world, economic indicators, and all things banking for the week.