Spotlight on Financial Services

"The Conference Board's latest economic forecast predicts that the U.S. and other major economies are on the brink of a genuine economic boom and will likely record the best year since 1984."


Michael E. Staten		Robert W. Johnson

MARCH 2004

Does Knowledge of Credit Score Change Consumer Behavior?

For many years, consumer advocates pressed credit bureaus and risk scorecard vendors to reveal credit scores to consumers. Responding to growing pressure from outside, and a strategic re-thinking of business opportunities inside, Fair Isaac launched just such a product in 2001 with its myFICO.com website. Recently, the company revealed some intriguing research results regarding the credit performance of consumers who have visited the site to get their credit scores.

Improvement in Account Performance

The most recent indices of consumer credit performance showed continued improvement. Moody’s Investors Services reported that its measure of the rate of credit card loans past due 30 days or more was 5.20% in November 2003, down 27 basis points from the same month in 2002.

Revised Data on Consumers’ Debt Service Payments

The October issue of the Federal Reserve Bulletin carries an important article, "Recent Changes in a Measure of U.S. Household Debt Service." As the title suggests, the article describes the impact of important revisions to the Fed’s very useful statistical series that tracks household debt payment burden.

Conference Board Forecasts Boom Ahead

The Conference Board’s latest economic forecast predicts that the U.S. and other major economies are on the brink of a genuine economic boom and will likely record the best year since 1984.

Final Bankruptcy Totals for 2003

As creditors already know, bankruptcy courts in the United States experienced another record-setting year in 2003. According to data just released from the Administrative Office of the U.S. Courts, personal bankruptcies filed during the calendar year totaled 1,625,208.

Fair Isaac Products for Creditors And Consumers

Inspection of the most recent Fair Isaac Annual Report for the fiscal year ending September 30, 2003 reveals impressive results. Net Revenue of $629.3 million in the fiscal year ending September 30, 2003, was up 60% from $392.4 million in the previous year. What explains such a dramatic increase in profits?

Trans Union and Acxiom to Offer Anti-Fraud Product

Information technology continues to drive new product development in the financial services industry. Two large sellers of information-based decision tools recently announced a new partnership to help combat fraud and identity theft.

Visa U.S.A. Transactions Were Up in 2003

Transaction volume on Visa cards in the United States grew by 11.6% to $1.1 trillion in 2003. The year-end results were welcomed by the card association which experienced one of its worst years ever in terms of litigation setbacks.

Does Knowledge of Credit Score
Change Consumer Behavior?

Subprime Mortgage Lending Saw Record Growth
in 2003

According to the publication Inside B&C Lending (Bethesda, MD), subprime mortgage lenders originated more loans in 2003 than in any year on record. As was the case in the conventional mortgage market, refinancings drove much of the record growth.

GMAC Settles Auto Loan Markup Lawsuit

General Motors Acceptance Corp (GMAC) has announced a tentative settlement of a class-action lawsuit that accused the company and its dealers of loan price discrimination against African American customers. The dispute involved the common practice in the indirect auto financing business of allowing dealers to keep some portion of the finance charge that they negotiate with customers as compensation for originating the loan.

New York State Court Strikes Down
City Predatory Lending Law

The tension continues between legal jurisdictions competing to stop abusive mortgage lending. In late January the New York State court struck down a New York City ordinance that prohibited any institution engaged in “predatory lending” from doing business with the city.

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