Quote of the Month:
"The financial distress for consumers caused by layoffs in 2001 will continue to impact lender portfolios well into 2002."
| Forecasts & Statistics |
| Product Trends |
| Industry Trends |
| Issue Archive |
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| Economic Outlook |
| Near the end of last year, the Federal Reserve Bank of Chicago held its annual Economic Outlook Symposium in Chicago. More than 70 economists and analysts from business, academia and government convened to look into the future. |
| Personal Bankruptcies Set New Record in 2001 |
| In February, the Administrative Office of the U.S. Courts released the final tally of personal bankruptcies filed during 2001. The data revealed that personal bankruptcies rose by 19.2 percent to set an all-time record of 1,452,030 filings during the year. |
| Consumer Credit Quality to Slowly Improve by End of 2002 |
| Despite the encouraging economic news in recent weeks, risk managers know that the worst is not yet over. Credit losses usually peak about six to nine months after a recovery begins. The financial distress for consumers caused by layoffs in 2001 will continue to impact lender portfolios well into 2002. |
| Who Are the Unemployed? |
| A new study released by the Employment Policy Foundation (Washington, DC) provides an interesting analysis of the composition of Americans who were unemployed in December 2001. In that month, the U.S. unemployment rate reached 5.8 percent and 8.3 million people were unemployed. |
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| Privacy as a Marketing Tool |
| Most banking executives view customer privacy protection as a compliance issue rather than as a source of comparative advantage. Only 21 percent of executives surveyed by KPMG last fall viewed privacy as a marketing tool. |
| Update on Web Usage |
| Consumer familiarity with the Web, and E-commerce in particular, continue to grow. Here are some recent statistics. |
| AMEX Profits Drop |
| CardLine reports that the decline in travel expenditures and business spending in the fourth quarter of 2001 caused a sharp drop in the earnings of Travel-Related Services (TRS) of American Express. |
| Travel Rewards on Debit Cards |
| While other issuers of debit cards have tried to gain consumers' acceptance by offering opportunities for cardholders to earn travel miles, Card Forum has cited a Citibank program to enable its MasterCard Debit cardholders to earn American Airlines AAdvantage miles. |
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| Why Home Ownership Is Up |
| Some writers (and many politicians) have credited various government programs with the increase in the rate of home ownership from 64.2 percent in 1990 to 66.2 percent in 2000. However, an examination of demographic trends suggests that the rising homeownership rate is more likely attributable to our aging population. |
| Subprime Mortgage Yields |
| In the Legislative and Litigative Trends section of this issue of Spotlight we review Federal Reserve Governor Edward Gramlich's comments on the economic rationale for subprime mortgage lending. The issue is whether subprime mortgage loans are synonymous with "predatory" mortgage loans and need to be curtailed by government regulation. |
| Survey of Finance Companies |
| The January issue of the Federal Reserve Bulletin contains the results of the most recent of the massive surveys of finance companies that the Federal Reserve Board undertakes every five years. Finance companies provide loans and leases to consumers, as well as short- and intermediate-term loans and leases to business firms. |
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| Predatory Lending |
| On January 20 of this year, Governor Edward M. Gramlich of the Federal Reserve Board spoke at a national conference in Ann Arbor, Michigan. His remarks on the issue of "predatory lending" should help state legislators deal with the issue. |
| Virginia Bill Would Authorize Payday Lending |
| In a move that took consumer groups by surprise, the Virginia House of Delegates passed a bill in mid-February that significantly lowers the barriers to payday lending in Virginia. The bill now moves to the state Senate. |