Quote of the Month:
"As
economist James F. Smith at the University of North Carolina noted in his
newsletter, the odds are high that the pace of economic growth in 2000
will be the best of any year since 1984."
| Forecasts & Statistics |
| Product Trends |
| Industry Trends |
| Issue Archive |
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| Consumer Outstandings Accelerate, but not Debt per Borrower |
| Consumers have consistently surprised analysts since last fall as aggregate borrowing has accelerated despite the Fed’s series of interest rate hikes. For all of 1999, consumer installment credit grew by 7.1%. |
| Delinquency Picture Continues to Improve |
| The remarkable economic climate has certainly been evident in loan performance. With one notable exception, delinquency rates on most type of consumer loans have experienced sharp declines over the past 12-18 months. |
| How Exceptional Was the Economic Environment in the 1990s? |
| When Alan Greenspan calls the current economic environment exceptional, who are we to argue? Although most professional forecasters are calling for slowing growth through the remainder of this year, and even slower growth next year, the torrid pace from which we are decelerating is still setting post-war records. |
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| Credit Card Fees Rise |
| For the past several years, credit card fees have been rising, especially with respect to foreign travel this year. CardTrak reports that three years ago major card issuers were charging $10 for a $1,000 advance. |
| State Farm is Set to Offer Loans |
| Yet another big player is about to enter the already competitive consumer lending market. State Farm Insurance Companies has begun training 16,000 agents in its national network to sell home equity loans, auto loans and auto leases from agency offices. |
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| Credit Card Volume and Quality at Depository Institutions |
| Data from Veribanc, Inc. allow a comparison of credit card outstandings at banks, credit unions and savings and loan associations as of the first quarters o f 1999 and 2000, as well as trends in delinquency rates and charge-offs. As of the end of the first quarter of 2000, total credit card outstanding of commercial banks, both held in their portfolios and securitized, amounted to $505 billion, up from $474 billion a year earlier. |
| Debt Burden |
| Since consumers make monthly payments on their installment debts and home mortgage loans, it is appropriate to measure trends in debt burden by comparing these month payments to monthly disposable (after-tax) personal income. |
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| Providian to Make Rebates |
| Last month's issue of Spotlight ranked Providian Financial Corporation as the seventh largest bank credit card issuer in the U.S. as of the end of the first quarter. Now bank regulators are asking that the firm reimburse its customers about $300 million. |
| Predatory Lending |
| The issue of "predatory lending" continues to entrance the news media. On May 24, the House Committee on Banking and Financial Services held hearings on predatory mortgage lending. |