| Quote of the Month:
"...concern about a war with Iraq is 'enough to be an impediment' to economic growth but...the committee does not anticipate an extended conflict and considers a recession highly unlikely."
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February 2003
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| Top Trends for 2003 |
| In a timely article with the title above, American Demographics has pointed to trends over the past 10 years that will affect those in firms seeking to provide credit to consumers for housing, automobiles, and other purchases. The changes that are most likely to affect the markets for consumer and mortgage credit are listed here.
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| Consumer Survey
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| The Federal Reserve Board has just released its latest Survey of Consumer Finances. A full discussion of the findings is available in the January 2003 issue of the Federal Reserve Bulletin. These surveys are conducted every three years and contain data that should interest anyone who markets products and services to consumers, but especially financial institutions. |
| "Uncertainty Is the Enemy of Growth"
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| The Index of Small Business Optimism dropped to its lowest level for 2002 in December. This came on the heels of November's report of job creation—the first positive reading in several months. |
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| Issuer E-mails and Online Statements |
An update to an item in last month's issue (see Paperless Credit Card Statements) highlights the increasing use of e-mail by credit card issuers to acclimatize their customers to communicating electronically and ultimately viewing and paying their accounts balances online.
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| Bringing the Unbanked into the Banking Community |
| In a recent issue of the Chicago Fed Letter, Doug Tillett and Liz Handlin outline public and private initiatives being undertaken to prepare and encourage the "unbanked" (those who do not use mainstream financial services) to partake of the account services now being offered. |
| Mortgage Rates Still Low |
| There is still time to refinance your home mortgage. As the accompanying table shows, residential mortgage rates (excluding points) have continued to drift downwards from September of last year. |
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| Credit Markets Help to Reduce Child Labor |
| Those readers involved in consumer and mortgage credit have probably not realized (until now) that you are contributing to a reduction in child labor. The National Bureau of Economic Research has just published a study by Rajeev Dehejia and Roberta Gatti, titled Child Labor: The Role of Income Variability and Access to Credit Across Countries (NBER Working Paper No. 9018). |
| Banks on Military Bases |
| In his article in a recent New York Times, Alex Berenson charges that "at least 1,000 banks are encouraging customers with low balances to overdraw their checking accounts, allowing the banks to skirt credit laws and collect billions of dollars in new fees." |
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| Racial Discrimination in Mortgage Lending? |
| Over the past several years, we have commented on numerous reports and studies that have alleged racial discrimination in lending, especially mortgage lending. Typically, the "evidence" of racial discrimination in these studies has been the fact that applications from minorities were denied more frequently than were applications from non-minorities. |
| Lawsuits Challenge Auto Leasing |
| It may be hard to believe, but General Motors Acceptance Corp. and other leasing companies, are being held liable for accidents involving drivers to whom GMAC had leased cars. The key issue is that GMAC, not the driver, owned the car. Misery loves company. |
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