Quote of the Month:
"Interestingly, the collapse of Enron may have influenced the personal bankruptcy language in the latest version of the bankruptcy bill."
| Forecasts & Statistics |
| Product Trends |
| Industry Trends |
| Issue Archive |
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| Rise in Home Ownership Among Hispanics |
| Mortgage lenders may find it profitable to heed a significant increase in homeownership among Hispanics. The last census shows that over the decade, home ownership among Hispanics grew to 46 percent from 42 percent. |
| Trends in Financial Services |
| The Beige Book published by the Federal Reserve Bank of Kansas City summarizes the information collected from business and other contacts outside the Federal Reserve System. The release of April 24 includes comments received relating to financial services. |
| Trends in Mortgage Rates and Home Sales |
| During most of the past year, declining residential mortgage rates have encouraged consumers to purchase homes or to refinance residential mortgages. As shown in the table, from June 2001 through February 2002, average rates on 30-year, fixed-rate mortgages dropped from 7.33 percent to 7.01 percent. |
| Consumer Credit Index |
| We have often said that credit counseling agencies are well positioned to supplement what is known about credit quality, by virtue of their in-depth interviews with several million financially troubled borrowers each year. The trick is to develop consistent measures of either the causes or symptoms of overextension that can be tracked over time. |
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| State Farm Bank is Growing Fast |
| In 1999 State Farm Insurance Company set up a bank subsidiary to begin cross-selling auto loans, credit cards, CDs and mortgage loans to its huge customer base. The original business plan called for operations in three states at the end of three years. Instead, the bank has established operations in 48 states in just two and a half years, and has $1.8 billion in assets. |
| Sears Card Profitability |
| A recent listing of the most profitable card issuers listed Sears, Roebuck and Co. as the third most profitable portfolio in the U.S., trailing only Citigroup and MBNA. In 2001 Sears earned $1.53 billion on its $22.4 billion of card receivables, compared to Citi's earnings of $2.13 billion and MBNA's earnings of $1.69 billion. |
| American Express Black Card |
| Those of our readers who spend more than $1,500,000 annually on their American Express card probably already have an Amex Black Card. Holders of this card are entitled to a 24-hour concierge service. |
| Pricing Bank Credit Cards |
| Several banks have been increasing their late fees. Beginning this month the Chase subsidiary of J. P. Morgan Chase & Co. will raise its late fee to $35 from $29 for cardholders with balances of more than $1,200. In his article in the Wall Street Journal, Ron Lieber reports that Discover Financial Services (Morgan Stanley) and MBNA Corp. are planning similar increases. |
| E-Commerce Notes |
| • Reliability, and not content, is fueling the switch to high-speed Internet access, according to a new study by Jupiter Media Metrix. The primary motivation for dial-up users to switch to broadband is the "always on" feature. |
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| New Study Affirms Value of Credit Counseling |
| A study released in March 2002 by the Credit Research Center at Georgetown University's McDonough School of Business documented a significant improvement in consumers' borrowing and payment behavior in the years following their receipt of credit counseling. The results provide statistical evidence that credit counseling has a positive impact on many borrowers, and will bolster the appeals for additional funding by those agencies that offer full-service counseling. |
| Banks Invade Cities, Offer More Choices |
| Banks from outside major cities are beginning to invade them. New York City provides an excellent example. |
| Fannie Mae Challenges Predatory Lending Laws |
| Fannie Mae (Federal National Mortgage Association) has riled consumer advocates seeking low home mortgage interest rates and fees for low-income borrowers. The issue arose in California, where Fannie Mae has sought exemption from the state's laws designed to curb "predatory lending." |
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| Progress on Bankruptcy Reform |
| Washington veterans will tell you that bankruptcy reform is always a long and tedious process. The latest experience is no exception. |
| Government Credit Counseling |
| Instead of private credit counseling firms, what about counseling by a government agency at no cost to overburdened consumers? In the United Kingdom, the Department of Trade and Industry (DTI) has just completed a pilot test of a national money advice telephone helpline. |
| Card Issuers Petition for Review |
| Visa U.S.A. and MasterCard International have petitioned the U.S. Supreme Court to review the federal appeals court's decision to support the decision by a lower court that upholds certification of the class action suit brought by Wal-Mart Stores, Inc., Sears, Roebuck and Co. and other retailers. |