Former SVP at Equifax Inc
- Macroeconomic backdrop for consumer credit including how borrower credit quality has evolved and could evolve post-pandemic
- Rising interest rate environment and potential impact across consumer credit categories
- US government and regulatory action across categories, highlighting potential CFPB (Consumer Financial Protection Bureau) action
- Potential origination volumes and loan performance across mortgages, autos, credit card debt and more
- Outlook for 2022 and beyond including potential evolution of the ability to underwrite risk
What are your thoughts on the state of consumer credit in the US, highlighting 1-2 key trends or drivers you think we should monitor?
We’ve heard negative data points from companies such as PayPal around low-end consumers. As you suggest however, maybe wages on the low end are very strong. Do low-end consumers have more or less disposable income now, given their consumption bucket is also probably higher than the general PCE [personal consumption expenditure]?
You expect delinquencies might start to rise more than normal. Foreclosures started is perhaps rising, but somewhat delaying the inevitable. By what magnitude do you think delinquencies could rise? If foreclosure starting rises, would it then tail off after?
If the forbearance period is not extended past May 2022, would you expect delinquencies to uptick in Q3? To what extent might they uptick? Would you expect them to level off after that?
Do you think any more broad-based student loan forgiveness is reasonable, or is that just a story being pushed by some politicians?
Could you elaborate on the supply-demand mismatch on the auto side, considering what’s been happening with residual values for used autos and new car prices? What’s your outlook for delinquencies, defaults and ultimately net charge-offs when thinking about future auto loan performance? There are now longer-duration loans at as much as 72-84 months. Car prices are higher but potentially could decline.
What do you expect from the CFPB [Consumer Financial Protection Bureau]? There’s been comments over the last couple of weeks around auto repos, student loan collections and medical bill debt. What do you think its priorities will be? What might be the implications for borrowers and lenders?
What do you think about buy now, pay later being included on credit scores or credit reporting from Equifax and other consumer credit bureaus?
Would you expect any other material changes to credit reporting or how bureaus and other groups evaluate consumer credit or borrower quality?
What do you think we should monitor over the next 3-5 years? What do you think is misunderstood by the investment community around consumer credit?
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