Quote of the Month:
"In an excellent article in Specialty Lender, James C. Allen explains why the booming economy has not been helpful to pawnshops."
| Forecasts & Statistics |
| Product Trends |
| Industry Trends |
| Issue Archive |
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| Bankruptcies Down through Second Quarter, 2000 |
| The good news is that the number of personal bankruptcy petitions filed in the second quarter of this year was 5.4% lower than in the second quarter, 1999. However . . . the year-over-year decline in bankruptcy filings has been slowing for the past three quarters, despite continued strong growth in personal incomes and generally remarkable economic conditions. |
| Small Business Owners Signal Continued Growth |
| The National Federation of Independent Business (NFIB) conducts a monthly survey of its small business members which has proved to be a reliable signal of business conditions in the U.S. economy. The July 2000 survey of 1,300 owners does not provide much comfort to the Federal Reserve Board in its attempts to slow economic activity to dampen inflation. |
| The Fed and Election-Year Politics |
| Since June, 1999, the Federal Reserve Board has moved to tighten short-term interest rates six times. The Fed-funds rate now stands at 6.5%, the highest level since 1991. |
| Credit Growth and Household Debt Burden |
| Last month we reported that consumer, non-mortgage borrowing had accelerated sharply over the past 9 months, despite a series of interest rate hikes by the Federal Reserve. Revised statistics released by the Fed in early August reveal that consumer installment borrowing last spring was even stronger than previously thought, and continued into June at a 9.9% annual pace. |
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| A Buoyant Economy Brings Mixed Blessings to Card Issuers |
| Harry Truman once pleaded with his staff to bring him a "one-armed economist" who would not make economic forecasts by saying, "Well, on the one hand . . . but on the other hand." The current buoyant economy has not been as helpful to the bank credit card business as one might expect. |
| GM Revises Card |
| The General Motors MasterCard issued by Household Bank has been one of the most successful credit cards around. Cardholders are not charged an annual fee and can accumulate rewards at the rate of five percent of every dollar spent. |
| Auto Lease Correspondent Program |
| Generally, commercial banks have not been as active in auto leasing as have the major automobile finance companies. Last year's Report of Condition and Income showed that out of 9,321 banks, only 1,753 had lease receivables. |
| Short Notes on Customer Demographics: Home Equity and Auto Borrowers |
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| Future Payment Systems |
| We may gain insight into future payment systems by examining a leader in the field: Finland. Currently, Fins are beginning to use their cell phones to pay for soft drinks from vending machines, for parking and for car washes. |
| Top Ten Finance Companies |
| Specialty Lender has published its semi-annual list of the 50 largest consumer finance companies ranked by their managed receivables as of the end of 1999. |
| Home Depot Expands Credit Program |
| Home Depot has announced a major expansion in its credit program. Until recently, the company had not pushed its credit card as strongly as some other retailers. |
| ATM Fees |
| Are consumers unknowingly trapped into paying ATM fees? A survey by Pulse EFT Association indicated that three-fourths of consumers use ATMs as their preferred method of obtaining cash, even though 58 percent had to pay a surcharge to do so. |
| Pawnshops Struggle |
| In an excellent article in Specialty Lender, James C. Allen explains why the booming economy has not been helpful to pawnshops. He quotes Tom Bessant, CFO of Cash America International: "Five years of a record-breaking economy means that the customer who used to come in and have four or five pawn loans now has just two or three loans." |
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| Margin Debt and Margin Requirements |
| Equity markets in the U.S. took a beating in late spring and early summer but have recently shown signs of renewing their upward march through the rest of the year. Prior to the April-May sell-off regulatory attention was being focused on a rapid rise in margin debt and the possibility that it was fueling equity markets toward a speculative bubble. |
| Disclosure for Credit Scoring |
| California state Senator Liz Figueroa is sponsoring a bill to give state residents the legal right to know their credit score. According to the report in Smart Money, it is a "right to know" issue. |