Quote of the Month:
"The truly important stabilizer of the economy right now is wealth coming from homes."
| Forecasts & Statistics |
| Product Trends |
| Industry Trends |
| Issue Archive |
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| Business Economists' Take on Current Economic Policy |
| What do economists think of current economic policies? The National Association for Business Economics released its semi-annual Economic Policy Survey in August. This year's assessment looks much different from a year ago. |
| Bankruptcy Update |
| In recent years, personal bankruptcy filings have declined somewhat over the summer months. No such decline has been evident this summer. |
| Credit Card Payment Performance Stabilizes |
| Chargeoff rates on credit card portfolios receded somewhat in June according to Standard and Poor's Credit Card Quality Indexes. The charge-off rate in a pool of approximately $350 billion in credit card receivables (nearly two-thirds of the total U.S. bankcard market) declined to 6.4 percent in June, 2001, a drop of 50 basis points from one month earlier. |
| Automobile Sales Outlook |
| The Federal Reserve Bank of Chicago has summarized the findings of its annual conference on the outlook for automobile sales in a special edition of its Chicago Fed Letter. In brief, the outlook is summarized as "slow traffic ahead." |
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| PIN or No PIN |
| The lawsuit by retailers vs. the banks issuing debit cards is still in process with no end in sight. Consequently, the debate on whether consumers should be encouraged to use their PIN or just their signature when using their card at a retailer continues. |
| Rehab for Check Bouncers |
| Credit counseling agency members of the National Foundation for Credit Counseling are rolling out a new educational program for chronic check-bouncers. In partnership with e-Funds Corp (Scottsdale, AZ), selected counseling agencies are offering the Get Checking program, a merit program for consumers who have had their bank accounts closed for failure to pay outstanding checks. |
| E-Commerce at Traditional Retailers |
| Major retailers have had dramatic success over the past year at converting their in-store customers into on-line shoppers. Sean Kaldor, vice president of analytical services for Nielsen/Net Ratings said the top five brick-and-mortar mass retailers are matching and even exceeding the 34 percent year-over-year growth of online giant Amazon.com. |
| MasterCard Files to Go Private |
| In a proposal filed with the Securities and Exchange Commission in mid-August, MasterCard International took the first step toward abandoning its structure as a member-run association. Instead, the company proposes to convert to a shareholder-owned company called MasterCard Inc. |
| Plastic Payroll |
| Visa International and five banks have joined to issue a new card that will be especially attractive to firms whose employees do not have bank accounts. It has been estimated that 12 million households do not have bank accounts. |
| Plastic for Parking Meters |
| The Philadelphia Parking authority is getting ready to install parking meters that will accept smart cards to be issued by the city. |
| AMEX Changes Terms |
| American Express has announced several changes in its agreements with cardholders, effective October 15, 2001. Fees for cash transactions at ATMs will be changed "from the greater of 3% or $3 to the greater of 3% or $5." |
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| How to Spend More Than Your After-Tax Income |
| At various stages in their lives, consumers spend more than their after-tax income. If they did not do so, there would be no American Financial Services Association and no Spotlight on Finance. There are two ways in which consumers spend more than their after-tax incomes; (1) they borrow, and (2) they tap into their assets, or dissave. |
| Auto Leasing Sours |
| Not long ago, sport-utility vehicles (SUVs) were a "hot" item in the market. Consumers rushed to lease them, and banks and finance companies accommodated the demand. The problem is that leases are expiring, SUVs are pouring back into the market, and we have a slowing economy. |
| Productivity in Banking |
| Numerous articles have reported increased productivity in the economy over the past decade as a result of computers and artificial intelligence. However, the articles have generally overlooked the fact that productivity in commercial banking began increasing two decades ago. |
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| Bank of America Settles Card Dispute |
| Some time ago, the Trial Lawyers for Public Justice (a public interest firm in Washington, D.C.) opposed a proposed settlement of a class-action lawsuit by credit cardholders against the Bank of America. According to Cardline, the suit by the TLPJ alleged that Bank of America had assessed late charges on cardholders' bills, even though they had not been late in their payments. |
| In Praise of Subprime Lending |
| In a recent article in the New York Times, Professor Charles Calomiris of Columbia University and Robert E. Litan, director of economic studies at the Brookings Institution, address the current debate on subprime lending in the residential mortgage market. They point out the contributions that subprime lending has made to our society and the dangers of well meaning or politically motivated efforts to curb subprime lending. |
| The Chilling Impact of Anti-Predatory Lending Laws |
| Two recent developments are reinforcing the Federal Reserve Board's concern that a patchwork quilt of state laws intended to curb predatory lending may actually put the brakes on legitimate subprime mortgage markets. Economists and lenders have argued that new state and local laws that use the mortgage loan interest rate as a trigger for additional lender restrictions and disclosures are substantially increasing the cost of making subprime mortgage loans. |