Quote of the Month:
"Personal saving fell to 3.3% of disposable income in May and June of this year, well below the 40-year average of 7.8%."
| Forecasts & Statistics |
| Product Trends |
| Industry Trends |
| Issue Archive |
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| Growth Is Stronger Than Expected, but Temporarily So |
| The government's barometer of second quarter 2003 economic growth surprised nearly everyone when it registered a stronger-than-expected 2.4%. This triggered the mid-summer rise in long term interest rates (including mortgage rates) as bond market traders interpreted the news as a precursor of Fed tightening of the money supply to choke off inflation. |
| Bankruptcy Filings Continue to Set Records |
| The news out of the U.S. Bankruptcy Courts just doesn't seem to be getting any better. Statistics just released from the Administrative Office of the U.S. Courts indicate that non-business (personal) bankruptcies set a new 12-month record for the year ending June 30, 2003 with 1,613,097 petitions filed. |
| Data from HMDA |
| Last month, the Federal Financial Institutions Examination Council (FFIEC) released data provided by institutions covered by the Home Mortgage Disclosure Act (HMDA) (whew!). The total volume of home loan applications and purchases increased in 2002 by 13 percent from 2001, primarily due to a significant increase (22%) in refinancing activity. |
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| Visa: Pay to Abandon Ship |
| You will recall that Visa and MasterCard recently settled a multi-billion dollar suit brought by retailers. Although Visa has promised its members that they would not be charged for the costs of the settlement, some have decided to jump ship, presumably in order to avoid helping to pay for the settlement. |
| China Orders a Billion Smart Cards |
| Next year, China will begin replacing its 900 million paper identity cards with plastic electronic identity cards that will also serve as debit cards. In his article in the Wall Street Journal, Andrew Batson observes, "This profound transformation of how the government interacts with its citizens is proceeding nearly unnoticed by anyone outside a small circle of bureaucrats and industry executives." |
| Lower Fees on Debit Cards |
| Retailers have been eagerly awaiting a reduction in fees on debit card transactions as a result of the court settlement in April. In her article in the New York Times, Jennifer Bayot suggests that it may be a long wait. |
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| Household Financial Management |
| The Federal Reserve Board has published an excellent lead article in the July Federal Reserve Bulletin: "Household Financial Management: The Connection Between Knowledge and Behavior...." It should interest educators at all levels, as well as members of credit industry associations, such as AFSA, that support financial education programs for consumers. |
| Australian Credit Card Interchange Regulation |
| In an effort to force issuers to pass along declining costs of processing credit card transactions, last year the Reserve Bank of Australia (RBA) issued a regulation that will require issuers to tie interchange rates to their average processing costs. This effectively puts a ceiling on interchange rates. |
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| The Role of State-Level Exemption Laws in Consumer Delinquency Choices |
| In the summer 2003 issue of The Quarterly Review of Economics and Finance, Sumit Agarwal, Chunlin Liu, and Lawrence Mielnicki of FleetBoston Financial examine the effect of the cross-state differences in three types of bankruptcy exemption laws on consumer loan delinquencies and bankruptcy behavior. |
| California Passes Landmark Privacy Law |
| To the surprise of many observers (including your editors) the California legislature resurrected and passed a controversial privacy bill in mid-August that will affect most diversified financial service providers doing business in the state and could influence the ongoing debate over Fair Credit Reporting Act reform at the Federal level. |
| Repossession Not Allowed |
| If you are thinking of repossessing a car owned by a member of our armed forces, think again. According to an article in ProRepo, military personnel on active duty are protected from repossession of their motor vehicles without permission of the court. |