Quote of the Month:
"The most important financial services bill of 2003 has completed its journey through Congress."
| Forecasts & Statistics |
| Product Trends |
| Industry Trends |
| Issue Archive |
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| Job Growth Ahead in 2004 |
| On the heels of a stunning third quarter growth spurt (7.2% growth in real GDP, the largest in two decades), the U.S. economy is finally beginning to create new jobs. |
| Confidence Rises With Job Growth |
| What a difference six months can make. Between March and November of this year, the University of Michigan's Index of Consumer Sentiment has risen 21%. |
| Bankruptcies Rising, but More Slowly |
| The latest quarterly report from the U.S. Bankruptcy Courts contained mostly bad news, but also provided some reason to be cautiously optimistic about filing trends in the coming months. |
| Bankruptcy and the Middle Class |
| USA Today has published its review of a new book written by Harvard Law Professor Elizabeth Warren and her daughter, Amelia Warren Tyagi, as part of the Consumer Bankruptcy Project at Harvard University. According to the Two Income Trap, "92 percent of the record 1.6 million people who filed for bankruptcy in the year ending June 30, 2003 were from the middle class. |
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| Debit Cards Grow |
| In her recent article in Business Week, Mara Der Hovanesian cites a recent study published in the Nilson Report that points out that even though there are twice as many credit cards outstanding as debit cards, industry analysts expect that the debit cards will generate 16.5 billion in transactions (excluding ATMs) in 2003, up 22 percent over last year. |
| Providian Offers Democratic Party Affinity Card |
| A new affinity card from Providian will allow Democratic Party loyalists a chance to show their colors (literally) at the point of sale at the same time they rack up rewards for themselves and their party. |
| Bank One Offers Cash-Back Cobranded Investment Card |
| A new co-branded Visa card from Bank One will provide cardholders with cash rebates that are deposited directly into their brokerage accounts. |
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| Changes in the Mortgage Refinancing Market |
| According to Freddie Mac's chief economist, Frank Nothaft, as of June of this year refinancings comprised 75 percent of all new mortgage loans. Since then refinancings as a percentage of all new mortgages have declined to less than 50 percent of all mortgage activity ($3.3 trillion in 2003) and Freddie Mac expects it to fall further to 33 percent in 2004. |
| Housing Starts Rise |
| As the accompanying table shows, over the 12-month period ending in September 2003, there were 1,684,000 new, privately owned housing starts in the U.S., 1.8% above the level in the previous 12-month period ending in September. For the 12 months ending in September 2003, housing starts increased in all regions except in the South, where they fell by 6.1% from the previous year. |
| Bank of America Bets on Consumers |
| In summarizing Bank of America's proposed acquisition of Fleet Bank, Carrick Mollenkamp and John Hechinger begin their article in the Wall Street Journal with a catchy lead sentence: "Bank of America Corp. is making a $43 billion bet on the U.S. consumer." |
| Finance Companies |
| Data released by the Federal Reserve show that the outstandings of finance companies grew from $907.0 billion at the end of 1998 to 1,248.1 billion at the end of July 2003, an increase of 37.6%. In both years, the composition of the portfolio of finance companies changed only slightly, as shown in the accompanying table. |
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| Congress Passes FCRA Reform Bill |
| The most important financial services bill of 2003 has completed its journey through Congress. On November 21 the House of Representatives approved a reform of the Fair Credit Reporting Act titled the "Fair and Accurate Credit Transactions Act" on a 379 to 49 vote. |
| Visa v. MasterCard, Round 6 |
| According to the article in the Wall Street Journal by Jathon Sapsford and Mitchell Pacelle, "the heavyweight fight between Visa USA Inc. and MasterCard International, is getting even more bitter." In July, Visa notified a list of 100 key issuers of its card that, if they chose to leave Visa in order to issue debit cards under a rival brand, they would be assessed a large special "exit fee." |
| IRS to Audit Nonprofit Credit Counsellors |
| You may recall earlier issues of Spotlight, in which we reviewed the operations of some "nonprofit" credit counseling centers. Now, we are pleased to note an article in the Wall Street Journal reporting that the Internal Revenue Service is "auditing more than 30 nonprofit credit counseling companies, including nine of the top 15, as part of a multi-agency crackdown on the fast-growing industry." |