|
June 5, 2008
|
 |
Regency Finance Executive Joins AFSA Board of Directors
MoneySKILL Training Reaches Teachers in Tennessee
AFSAEF Publication Provides Financial Guidance for Victims of Natural Disasters
Sixth Gear Enters Auto Finance Market With $1 Billion in Equity and Debt Commitments
Peak5 Launches Program to Help Lenders Check Servicing Strategies
A Random Act of Kindness: A Rose to Principal Financial Group and to Wells Fargo
Ford Motor Credit Offers Financial Relief to Tornado Victims
CIT Says It Disagrees With Moody's Downgrade
Merrill Lynch Integrates LatAm, Canada Operations
B-to-B Payment May Imperil Interchange
Fractured World of Contactless Cards
Card Issuers Study Alternative Scores
Senate Confirms Preston as Housing Chief
FDIC to Sponsor Forum on Mortgage Lending for Low-and-Moderate-Income Households
Sacramento: Subprime Home Loans Subject to Tighter Rules
Ohio Governor Signs Payday Loan Ban
Zions Says Hispanic Push Is Translating to Growth
Viewpoint: Innovation: Beyond the Usual Suspects
California Assembly Passes Financial Literacy Bill
Dealers: We Want a Heads-Up
Treasury Assistant Secretary Nason's Remarks on Regulatory Reform
Regency Finance Executive Joins AFSA Board of Directors
Charles O. Moore, President & CEO of Regency Finance Company headquartered in Warren, Ohio, was recently appointed to AFSA’s Board of Directors. With more than 23 years of experience in consumer lending, Moore often speaks at regional and national conferences on topics ranging from mortgage lending to automobile finance to alternative lending. Prior to joining Regency Finance, he served as President and Chief Executive of Dealers Financials Services. Moore also serves as Chairman of the Department of Defense Employers Support of Guard and Reserve.
(click for web site)
Back to Top
MoneySKILL Training Reaches Teachers in Tennessee
Approximately 100 teachers received training on MoneySKILL® at the 2008 Personal Financial Education Teachers Conference hosted by Tennessee Jump$tart, June 4 – 6. The MoneySKILL training gives teachers an overview of the curriculum, how to incorporate it in the classroom, and how to use its many features – like the online grade book. The conference was held in Gatlinburg, Tenn., in the foothills of the Great Smoky Mountains.
The AFSA Education Foundation (AFSAEF) holds teacher training sessions across the country each year, with summer the busiest time.
(click for web site)
Back to Top
AFSAEF Publication Provides Financial Guidance for Victims of Natural Disasters
With this week marking the start of hurricane season, the AFSAEF reminds the association’s member companies about the availability of “When Natural Disaster Strikes,” the Foundation’s free consumer brochure providing valuable information on how to secure one’s family finances before and after a natural disaster. The brochure is available both online and in print.
(click for web site)
Back to Top
Sixth Gear Enters Auto Finance Market With $1 Billion in Equity and Debt Commitments
F&I Magazine (06/03/08)
Sixth Gear Solutions will mark its debut in the auto finance market with $1 billion in equity and debt financing commitments. The $1 billion in equity and debt commitments will be used to underwrite its growth, according to officials for the New York City-based company. "We are committed to delivering unique value and outstanding service to the dealer and the driver, which will define our position in the marketplace," says Sixth Gear co-CEO Michael Barrington. The independent auto finance company's capitalization is made up of over $250 million in equity commitments from a group of equity investors and $750 million in long-term debt facilities.
(click for web site)
Back to Top
Peak5 Launches Program to Help Lenders Check Servicing Strategies
SubPrime Auto Finance News (06/03/2008)
Peak5 has rolled out a new benchmark program customized for auto finance companies seeking to test their internal servicing strategies. Test Drive Peak5 allows finance companies to safely search out new servicing strategies while affirming existing ones. To mitigate any risk concerns, the program is conducted in conjunction with the finance companies' current servicing strategies using a statistically valid subset of the test's debtor base. At the conclusion of the Test Drive after the new technique is deployed, Peak5 offers a comparative analysis to explain the advantages of the benchmark program. In addition to providing a professional consultation, the Test Drive program offers an array of resources to fortify servicing efforts, delivering increased attention to servicing strategies.
(click for web site)
Back to Top
A Random Act of Kindness: A Rose to Principal Financial Group and to Wells Fargo
Des Moines Register (IA) (06/01/08)
Principal Financial Group and Wells Fargo have committed to annually pay $2.5 million and $350,000, respectively, to sponsor the charity golf classic in Des Moines, Iowa through 2010. The 2007 tournament raised $575,000, which went toward programs serving children.
(click for web site)
Back to Top
Ford Motor Credit Offers Financial Relief to Tornado Victims
PRNewswire (05/30/08)
Ford Motor Credit Co. is providing customers affected by the tornadoes that recently ripped through parts of Iowa the option of putting off some car payments under its Disaster Relief Program. The program lets qualified customers delay one or two payments and recommence their normal payment schedules when conditions improve. The option extends to customers who are leasing or have bought automobiles with financing from Ford Credit, Jaguar Credit, Land Rover Capital, Mazda American Credit, PRIMUS, or Volvo Car Finance.
(click for web site)
Back to Top
CIT Says It Disagrees With Moody's Downgrade
Associated Press (05/30/08)
CIT Group said May 30 that it disagrees with Moody's May 29 downgrade of the company's senior unsecured credit rating from "A3" to "Baa1." Moody's cut CIT's rating, noting that the company has encountered difficult market conditions as liquidity in the financial markets has essentially vanished over the past few months. CIT said it has made "significant progress" toward bolstering its balance sheet and boosting liquidity, and that progress will ensure profitability. Over the past couple of months CIT has raised $1.6 billion in new capital, financed $1 billion in assets, and sold more than $2 billion of assets near book value, according to the company.
(click for web site)
Back to Top
Merrill Lynch Integrates LatAm, Canada Operations
Reuters (05/29/08) Brandimarte, Walter
Merrill Lynch & Co. has announced that it will be integrating its Latin American and Canadian businesses. The newly integrated regions will be headed by James B. Quigley, who will be responsible for overseeing wealth management, sales, and trading.
(click for web site)
Back to Top
B-to-B Payment May Imperil Interchange
American Banker (06/04/08) P. 10; Wolfe, Daniel
Credit card issuers hoping to expand into the business-to-business payments market may have to abandon the interchange structure for those payments, says TowerGroup's Theodore Iacobuzio. He say that although many businesses are trying to transition away from using checks for business-to-business payments, they are not using credit cards due to their cost. Iacobuzio says competition from the automated clearing house networks may also force card issuers to look for business models that do not rely on interchange revenue. He says "both the ACH and the card networks are presenting themselves" as alternatives to checks, but ACH costs less.
(click for web site)
Subscription Required
Back to Top
Fractured World of Contactless Cards
Bank Technology News (06/08) Fest, Glen
Banks and major card issuers' strategies to grow the contactless payment market are marked by inconsistency, some observers say, partly due to the cost of chip-embedded cards and unresolved security issues. "If we look at the number of consumers who say they don't know what contactless is--33 percent of respondents--that shows there's still a fairly great educational effort that needs to go into it," says JupiterResearch analyst Ed Kountz. Although Javelin Strategy & Research forecasts that the number of consumers making contactless payments could total 57 million when near field communications rollouts are projected to arrive in 2013, a lack of usage cultivation and adoption could lead to stagnation. Javelin analyst Bruce Cundiff says that up to now contactless programs have been primarily driven by card network subsidies and progress in micro-pay outlets, which is insufficient to serve as a "catalyst" to mobile payments. Merchants and carriers will need to invest heavily in building acceptance and common usage of contactless payments, which Javelin President James Van Dyke says is "an uphill battle" as long as compelling business models are not perceived. Network credit card usage could be constrained by the promotion of contactless private-label and closed-loop gift-card programs, and Cundiff stresses the need to "break that logjam." Merchants could be attracted to contactless payment by chip-stored loyalty programs and attractive offers from processors such as First Data or alternative payment outlets such as PayPal.
(click for web site)
Back to Top
Card Issuers Study Alternative Scores
Collections & Credit Risk (06/08) Vol. 16, No. 6, P. 26; Fitzgerald, Kate
A growing number of credit card firms are depending less on FICO scores to determine the creditworthiness of traditional borrowers and are more often supplementing other tools to evaluate prospects. Issuers' new initiatives entail putting more emphasis on other kinds of consumer economic information than they did previously. They combine that information with FICO scores to figure out the creditworthiness of potential cardholders. American Express, for instance, employs FICO scores to rank potential recipients but then bases its approvals on information that is more predictive of a person's actual creditworthiness, such as house value and the amount and kind of debt possessed. Even businesses that offer alternative credit information to score unbanked clients with limited or no credit history are witnessing greater demand from leading card issuers. Big issuers are using LexisNexis' RiskView, which contains property ownership and bill-payment history, to help make decisions concerning credit card loans to mainstream patrons. While FICO scores will probably continue to be the foundation of credit card risk management, new sources of information and more innovative scoring procedures could result in better decisions.
(click for web site)
Publication Homepage: Link to Full Text Unavailable
Back to Top
Senate Confirms Preston as Housing Chief
Reuters (06/05/08) Allen, JoAnne
Small Business Administration chief Steve Preston will replace Alphonso Jackson as secretary of HUD. Nominated by President Bush in April, Preston received Senate confirmation late on June 4. "The department requires strong leadership at a time when our housing market is experiencing a period of challenge and uncertainty," Bush said when he introduced Preston as his nominee. Jackson's resignation over questions about his involvement in awarding government contracts now thrusts Preston into a leadership role as the nation addresses rising foreclosures and defaults on mortgages, a slowdown in construction and new-home sales, costly write-downs by banks, and a potential recession.
(click for web site)
Back to Top
FDIC to Sponsor Forum on Mortgage Lending for Low-and-Moderate-Income Households
FDIC News Release (06/04/08)
The Federal Deposit Insurance Corp. will be sponsoring a Forum on Mortgage Lending for Low-and-Moderate Income (LMI) Households on July 8. The forum is designed to develop a framework for LMI lending in the future, including identifying market and regulatory incentives. Other discussion topics include reintroducing standard underwriting criteria and pricing to the LMI mortgage market; reasonable, profitable, and innovative approaches to LMI mortgage lending; and developing partnerships that encourage home ownership.
(click for web site)
Back to Top
Sacramento: Subprime Home Loans Subject to Tighter Rules
Monterey County Herald (CA) (05/30/08)
The California Assembly has passed a bill that requires mortgage lenders to restrict subprime financing to borrowers who have the ability to repay such mortgages. Introduced by Assemblyman Ted Lieu (D-Torrance), the measure also would prohibit loan officers from receiving compensation for steering borrowers into subprime loans they cannot afford. Penalties for violations would include fines of up to $10,000 and revocation of lenders' licenses. Legislators believe tighter underwriting rules will help keep the foreclosure crisis from expanding in the state.
(click for web site)
Back to Top
Ohio Governor Signs Payday Loan Ban
RTO Magazine (06/02/08)
A payday loan proposal that would lower the maximum allowable interest rate on payday loans has been signed into law by Ohio Gov. Ted Strickland. The governor dealt a tough blow to the payday loan industry by signing HB 545, which lowers the maximum allowable interest rate on payday loans to 28 percent. In May, Advance America President and CEO Ken Compton appealed to the governor to cooperate with the industry on finding a solution that was mutually beneficial. "There are better ways to approach consumer protections that do not result in forcing the closure of an entire industry and the loss of thousands of jobs in Ohio," Compton said at the time.
(click for web site)
Back to Top
Zions Says Hispanic Push Is Translating to Growth
American Banker (05/30/08) P. 2; Gordon, Jennifer
For five years, Zions Bank has been courting Hispanic customers with a targeted marketing campaign, and the bank says the effort is paying off. No-interest deposits rose 49 percent, and money market accounts are up 165 percent. And the growth is expected to improve. Hispanics make up as much as 24 percent of the population of some communities in Utah where the bank operates, and the population is growing. The bank invested in a team of 13 bankers including 4 bilingual relationship managers to focus on the Hispanic market and this month launched a Spanish-language version of its Web site. "It's wonderfully rewarding already and will only get more so as we have more time with it," said LeeAnne Linderman, Zions Bank retail executive vice president.
(click for web site)
Subscription Required
Back to Top
Viewpoint: Innovation: Beyond the Usual Suspects
American Banker (05/30/08) P. 11; Tescher, Jennifer
The upcoming Underbanked Financial Services Forum will focus on recent years' changes in the financial services landscape and how they change opportunities for consumers, including the underbanked. This forum will provide a national forum for bankers, check cashers, technologists, entrepreneurs, retailers, and regulators to discuss the present landscape. Bankers are innovating in response to competition as well as to better information about underbanked people, and bankers will have an important role to play either as consumer-oriented companies themselves or as producers of products for others. Banks have three main advantages over other financial services firms--better consumer protection, the ability to build credit, and the opportunity to save small amounts of money--but competition and innovation have been cutting into these advantages. More and more providers are helping people use rental history, bill payments, and remittance patterns to establish credit, and companies are also seeking to help people save small sums through innovative products like retail-distributed savings bonds or accounts that offer both prizes and interest for saving. While much of the attention for underbanked people focuses on checking accounts, the high cost of administering checking accounts means that they are not necessarily the best way to reach the underbanked. Instead of focusing on banks and checking accounts, the way forward should be to develop best-in-class products that bring together the various offerings of the overall market. There should also be a pathway of products consumers can follow to improve their financial opportunities over time.
(click for web site)
Subscription Required
Back to Top
California Assembly Passes Financial Literacy Bill
DSNews (05/29/2008) Panchuk, Kerri
The California State Assembly recently passed a bill sponsored by Assemblyman Ted Lieu (D-Torrance) intended to create a financial clearinghouse designed to provide California citizens with better financial information. Possible topics would include credit scores, interest rates, responsible borrowing, and overall financial literacy. The bill, AB 2123, is now headed to the State Senate.
(click for web site)
Back to Top
Dealers: We Want a Heads-Up
Ward's Dealer Business (06/01/2008) P. 56; Finlay, Steve
Stressed auto finance companies are failing to inform car dealerships about changes in standards and practices, making it more difficult for dealers to arrange third-party loans with other brokers. "Dealers are big boys, we understand change,” says Jeff Hodge of Downey, Calif.-based Honda World. “What hurts most is when a lender makes a structural change without communicating it.” For many dealers, it is not revisions to vehicle repossession policies or tolerance levels for delinquent loans that bother them, but the lack of information resulting in frustrated customers. Lenders say they are willing to accommodate some high-risk loans from a dealership if they also receive enough low-risk loan applications from customers with solid credit histories. Dealerships complain that too many lenders are "cherry-picking" the loan applicants, while lenders complain that they receive scores of high-risk loans when they can only book a few. Finance firms should try to improve their communication with dealerships and give them better figures, including the number of defaults and repossessions in the finance portfolio, some observers say.
(click for web site)
Back to Top
Treasury Assistant Secretary Nason's Remarks on Regulatory Reform
Market News International (06/04/08)
U.S. Treasury Assistant Secretary David Nason spoke about the federal thrift charter and the need for new depository institution charters at a June 4 conference in New York. The assistant secretary recommended more uniform regulations for commercial banks, entities electing a thrift charter, and parents of industrial loan companies. "Few people would argue, and it is largely not permitted anyway, that different bank charters should have different bank level regulations surrounding safety and soundness," said Nason. He suggested a more fair playing field that allows financial institutions to compete on an economic and marketplace basis, instead of on regulatory differences.
(click for web site)
Publication Homepage: Link to Full Text Unavailable
Back to Top
Abstract News © Copyright 2008 INFORMATION INC.
|
AFSA Newsbriefs is a weekly executive summary of AFSA initiatives and consumer credit articles. For more information,
please contact newsbriefs@afsamail.org.
AFSA's mission is to protect and improve the consumer credit business, maintain a positive public image, and create a legislative climate in which reasonable credit regulation can and will be enacted. The Association operates in the public interest, encourages and maintains ethical business practices, supports financial education for consumers of all ages, and provides other assistance in related fields on an as-needed basis. The American Financial Services Association has provided services to its members for over ninety years. The Association's officers, board, and staff are dedicated to continuing this impressive legacy of commitment through the addition of new members and programs, and increasing the quality of existing services.
|
