| Quote of the Month:
"Since consumers who retire are less likely to use credit than those who continue working, a surge in retirement will have a fairly dramatic effect on consumer and mortgage credit."
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June 2002
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| Personal Bankruptcy Growth Slows |
| In May, the Administrative Office of the U.S. Courts released statistics on personal bankruptcy filings for the 12-month period ending March 31, 2002. Personal bankruptcies were up 15.2 percent for the period, compared to the 12-month period ending March 31, 2001.
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| Credit Card Delinquencies and Losses Still Rising
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| Credit card losses were sharply higher in March 2002 compared to one year earlier. Delinquencies were up in the first quarter as well, although the rate of deterioration in delinquencies has slowed, according to Moody's Investors Services. |
| Long-Range Planning Department
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| Since consumers who retire are less likely to use credit than those who continue working, a surge in retirement will have a fairly dramatic effect on consumer and mortgage credit. |
| Strong Economy in the 1990s Narrowed the Income Gap |
| The rising economic tide of the late 1990s drove unemployment to record-low levels. Apparently it also narrowed the gap between the incomes of the most wealth and least wealthy Americans, according to a jointly authored study from the Economic Policy Institute and the Center on Budget and Policy Priorities. |
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| ATM Fee Payments at All-Time High |
| Convenience is valued but clearly not free. That lesson is clear from the market for automated teller machine (ATM) services. |
| Technology Aids the Unbanked |
| Wall Street Journal columnist David Wessel wrote a fascinating story recently that gives examples of how technology and globalization in financial services have helped rather than hurt the poor. The article focused on the 10 million American households that lack bank accounts. ATMs are often at the core of banks' strategies to offer services to unbanked customers. |
| MBNA Heads to Spain |
| U.S. card issuers continue to develop new markets overseas. In the latest announcement, MBNA Corp. indicated that the Bank of Spain has approved its application to market credit cards and related products in Spain. |
| Dealing with Delinquent Mortgages |
| The recession has caused a number of homeowners to fall behind on their mortgage payments. However, mortgage lenders have significantly changed their strategy when dealing with delinquent mortgage payments. Rather than enforcing a "pay or pack" doctrine, many lenders have attempted to adjust payments or find other means to allow borrowers to keep their homes. |
| Credit on a Debit Card? |
| Charter One Financial in Ohio has launched a "delayed payment" debit MasterCard according to CardWeb. The "SmartBusinessOneCard" is targeted at small business owners. |
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| Household's Annual Report |
| The annual report of Household International Inc. reveals some interesting trends in the industry as well as the policies of one of the major "players." As shown in the table, from years-end 1996 to 2001, Household "lowered its risk profile" by shifting out of credit cards and into real estate loans. |
| The Future of Community Banks |
| The June issue of the Chicago Fed Letter examines the outlook for community banks in the U.S. The authors of the study are Robert DeYoung, William C. Hunter, and Gregory F. Udell. At the outset, the authors observe: "There are more banks per capita in the United States than in any other developed economy." |
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| The Market for Deadbeats |
| Amid the ongoing furor over proposed amendments to bankruptcy legislation, it is useful to consider an article with the title shown above that was written by Margaret F. Brinig and F. H. Buckley and published in the Journal of Legal Studies in January 1996. Essentially, the authors presented a theory that the states attempt to attract value-increasing immigrants and to deter "welfare- or tax-loving immigrants." |
| Subprime Lending Update |
| Subprime lending has continued to be in the spotlight this spring. Much of the attention has been unwanted. Here is a brief update on percolating issues. |
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