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U.S. Bank's incoming mortgage president Rick Aneshansel argues that purchase volume will not make up for the drop in refinancing, and that some lenders will have little choice but to quit the business or pair up with a competitor.
June 11 -
About half of the customers who use JPMorgan Chase's Liquid prepaid card are financially underserved, and 30% of them have no other relationship with a bank, an executive said on Thursday.
June 6 -
U.S. credit card customers have become so diligent in making their payments that some are beginning to wonder whether the industry has entered a prolonged era of low chargeoffs and low delinquencies.
May 22
Chargeoff rates dropped at five of the six biggest credit card issuers in the latest monthly reports, defying the usual seasonal increase.
The data for May continues a long streak of strong credit performance that has
In contrast to bankers complaints about
Some have pointed to the
The very same thing that leads to relatively weak growth of outstandings in the card business is the same phenomenon that has led, I think, over the last few years, to credit continuing to perform just spectacularly well, and frankly better than expected, Capital One (COF) Chief Executive Richard Fairbank told investors last month.
Fairbank said Capital One is making gains in the market segments it has targeted, but that it is being held back by its decision to steer away from customers who carry large balances from month to month, the one part of the business that generates the most top-line growth.
We are not comfortable with the through-cycle resilience of some of the more heavily indebted and kind of high balance part of the revolver space, he said.
The chargeoff rate, or the annual pace at which loans are written off as uncollectible as a percentage of outstanding balances, for Capital Ones securitized receivables fell 42 basis points from the month before to 2.96% in May. Among the Big Six, only Bank of Americas (BAC) 52-basis-point drop, to 4.03% was larger.
Discover (DFS) was the only member of the Big Six to post an increase, by one basis point to 1.95%. Overall, Discover has been neck-and-neck with American Express (AXP) in the race to claim the lowest chargeoff rate among large issuers.
Both issuers have achieved portfolio growth trajectories that
Discover also says it is looking to home equity offerings as a defensive strategy in case borrowers begin to shift balances from cards to loans secured by their homes, as they did in the middle of the past decade during the housing bubble. Rebounding home prices have engendered some
Delinquency rates at most of the large issuers also declined in May, in line with the typical seasonal pattern. Payment rates, or the percentage of outstanding balances that cardholders pay off each month simultaneously a measure of the ability of borrowers to manage their debt and a read on the direction of loan growth increased across the board.