"...Doms and Morin find that media coverage of the economy also influences consumer sentiment and ... has led to instances in which consumer sentiment has been out of sync with economic fundamentals."

staten johnson

Michael E. Staten

Robert W. Johnson
spotlight archive

afsaonline

DECEMBER 2004   

Personal Savings Rate Near Record Low

The U.S. Commerce Department reported that the U.S. personal savings rate fell to its second-lowest level ever in October. Households saved 0.2 percent of disposable (after-tax) income, the lowest rate recorded since the U.S. government's monthly savings rate data began in 1959, with the exception of a quirky reading in October 2001 that was related to the terrorist attacks one month earlier.

Should we worry about the low savings rate? Perhaps a bit, but not overly so said Federal Reserve Governor Roger Ferguson in a speech to a trade association back in October.

Bankruptcy Filings Down Through Third Quarter
The Administrative Office of the U.S. Courts (AOUSC) just released its latest statistics on personal bankruptcies in the United States. The total number of personal (non-business) bankruptcies filed for the 12-month period ending September 30, 2004 was 1,584,170, down 2.6 percent from the same period ending one year earlier.

The Impact of Economic Reporting
on Consumer Attitudes
Consumer spending represents two-thirds of U.S. economic activity. As a major driver of the economic well-being of the country, it is important to understand what factors shape consumers' decisions to spend or not to spend.

Personal Savings Rate Near Record Low
The U.S. Commerce Department reported that the U.S. personal savings rate fell to its second-lowest level ever in October. Households saved 0.2 percent of disposable (after-tax) income, the lowest rate recorded since the U.S. government's monthly savings rate data began in 1959, with the exception of a quirky reading in October 2001 that was related to the terrorist attacks one month earlier.

Technology Lowers Auto Delinquencies
The old maxim "possession is nine-tenths of the law" describes the obstacle that auto lenders have traditionally faced in trying to collect delinquent loan payments. Even though the auto loan is typically secured by the vehicle, the collateral is in the hands of the borrower and is highly mobile.

Discover Aims to Offer Debit Cards Through Banks
Another sign of a changing credit card landscape in the wake of court rulings against Visa and MasterCard is Discover Financial Services' acquisition of the Pulse EFT Association. The Pulse PIN debit card network will give Discover the ability to offer banks both debit and credit cards carrying the Discover brand.

Cash Out Refinancings
Housing columnist Kenneth R. Harney reports in The Washington Post that a new study from Freddie Mac found that 60 percent of all refinanced mortgages purchased by the company during the third quarter of 2004 involved "cash-outs," up from 42 percent during the second quarter of this year.

BarclayCard Comes to America
The British banking company Barclays PLC has acquired U.S. card issuer Juniper Financial Corp.

Retail Financial Services in China
A new report from McKinsey & Company lays out a case for China as an ideal market for global financial services firms looking for strong growth opportunities. McKinsey analysts David von Emloh and Yi Wang forecast that China will be Asia's second largest market for personal financial services by 2010, following Japan.

Impact of Large Bank Mergers on Branch Networks
As reported in the October issue of Spotlight, the recent increase in large bank interstate merger activity is characterized by geographic market expansion. The post-merger institutions can serve customers across many states under one charter, thereby streamlining operations.

Damage Limits Affirmed in Truth in Lending Case
On November 30, the Supreme Court ruled 8 to 1 to reverse the judgment of the U.S. Court of Appeals for the Fourth Circuit (Richmond, VA) in the case of Koons Buick Pontiac GMC, Inc. v. Bradley Nigh.

Federal Reserve Board Announces Review
of TILA Disclosures
The Federal Reserve Board has issued for public comment an advance notice of proposed rulemaking (ANPR) that announces the agency's review of the open-end (revolving) credit rules set forth in the Board's Regulation Z.

Credit Reform in the U.K.
Concerns over abusive lending practices, overindebtedness and poor disclosures have prompted the British government to commit to a review and overhaul of regulations governing consumer lending in the U.K.

HOME | FORECASTS AND STATISTICS | PRODUCT TRENDS | INDUSTRY TRENDS
LEGISLATIVE AND LIGITATIVE TRENDS

© 2004 American Financial Services Association. All rights reserved.