Two-thirds of consumers active in the alternative loan market fall in the subprime risk category, the riskiest of all credit tiers. Data from a new TransUnion study found that many of these consumers perform well when opening traditional credit products such as credit cards, auto and personal loans. Read more here.
Last week The House voted to give final congressional approval to a major rewrite of banking rules that would revoke key elements of Dodd-Frank Act but still leaving most of it tact.
The President is expected to sign into law the “Economic Growth, Regulatory Relief and Consumer Protection Act,” which won House approval 258-159 as 33 Democrats and 225 Republicans voted for the bill. Officials say that it recalibrates regulation and risk in the financial services sector while promoting economic growth and new jobs.
The Senate Banking Committee Chairman said that the bill “right-sizes” regulations for smaller financial institutions, allowing community banks, credit unions and mortgage lenders to grow.
Key provisions of the legislation include:
- Increasing banks’ asset threshold from $50 billion to $250 billion for extra regulatory scrutiny by the Federal Reserve.
- Streamlining capital requirements and other exemptions from mortgage-lending rules for community banks.
- Amending the Volcker rule for banks with less than $10 billion in assets in an effort to bolster market liquidity and decrease risk to the financial system in economic downturn.
- Repealing the Department of Labor’s fiduciary rule, which aimed to minimize supposedly conflicted investment advice given to retirement savers.
Although Republicans claim the bill is a deregulatory effort, GOP lawmakers weren’t able repeal Dodd-Frank in its entirety. Key provisions remain, including the Consumer Financial Protection Bureau and Washington’s authority to unwind failing large banks.
Of the 17 million cars expected to be sold in the U.S. this year, about a third are leased. The rest are purchased. But there’s a new option for drivers coming on strong in 2018 – car subscriptions.
There are several companies offering drivers a monthly fee to access a variety of vehicles they can change up when they want. The fee varies depending on the company, and range from $400 to as much as $3,700 per month! The fee usual includes maintenance, insurance, roadside assistance, pickup and drop-off. And in most cases the subscription can be ended at any time.
Cadillac, Volvo, BMW, and Mercedes are all offering subscriptions today. In an interview with David Liniado of Cox Automotive (part owner of Flexdrive), he said that the market is tiny today (subscriptions between 100K – 150K) but anticipates it growing into the millions within the next 12 months! Read more about this new concept here.
We are so excited receive an Awards for Excellence from the Houston BBB for the fourth year in a row!
In 1992, the Better Business Bureau Education Foundation and the University of Houston Bauer College of Business Administration formed a partnership to recognize area businesses for their commitment to quality. Initially called the Spirit of Texas Awards, the Awards for Excellence are modeled after the Malcolm Baldridge National Quality Award. Today, the BBB Awards for Excellence continue to recognize businesses and non-profits in the Greater Houston area for their achievements and commitment to overall excellence and quality in the workplace.
Applications are judged by volunteers with the Silver Fox Advisors, a group of former business owners, entrepreneurs and CEOs dedicated to sharing their knowledge, experience and skills, allowing clients to improve their growth and profitability in a cost-effective manner. All applications were reviewed and scored by a minimum of two different judges. If additional information was needed customer and vendor referrals were surveyed.
We are one of the oldest members of the Houston Better Business Bureau and we very proud and appreciative of this distinguished honor.
It’s bank lending without the bank. As traditional banks have cut back on business lending a new opportunity for a growing group of asset managers who are making loans to mid-market companies has been created. Investors find Direct Lending an increasingly popular answer to low-yield problems. Companies that are robust enough to dip into the syndicated debt market are choosing direct lending instead, and regulators are asking if the market can sustain such growth without creating a mess.
Here’s how it works. Asset managers raise pools of money from investors interested in debt. The managers hunt for advisers with investment opportunities, or private-equity funds looking to finance acquisitions. The fund does its own research before deploying its money.
Borrowers are typically, mid-market-sized businesses that banks are no longer interested in lending to. Their need for credit and lack of good alternatives means direct lenders can get higher interest rates.
About $13.3 billion was raised globally in the first quarter of 2017, more than half the total for 2016, according to Deloitte. The U.S. is the biggest center for direct lending, with a 61 percent share of the market. As of June 2016, private credit providers had $595 billion in assets under management, according to research firm Preqin.
Read the entire article from Bloomberg here.
As you have already heard, the Postal Regulatory Commission (PRC) has issued a proposed change to the rate setting process that would authorize a series of over -Consumer Price Index (CPI) increases that could sharply increase postal rates over the next five years. (For details see our blog; The PRC is Threatening Your Livelihood)
March 1, 2018 marked the deadline to receive comments about the proposed changes, and the PRC got plenty. The comments received had a consistent theme from industry associations, individual mailing companies and direct mail organizations.
The American Mail Alliance represents associations and individual signers that have come together for the sole and limited purpose of showing unanimity in asking the PRC to reconsider its proposed solution. The AMA is by far, the largest ad hoc group submitting comments. They criticized the prefunding burden and noted that the PRC was placing too much focus on the financial health of the USPS as impacted by the Postal Accountability and Enhancement Act (PAEA), stating that most stakeholders in the industry, predictability, rate stability, and transparency have been achieved. In turn, the group argued that the commission over zealously sought ways to pay the accumulated debts caused by the unnecessary prefunding requirement.
Another rally against the proposed plan came from three groups commenting jointly; (the National Postal Policy Council, Major Mailers Association, and the National Association of Presort Mailers). They not only argued against the higher prices but questioned whether the PRC has the authority to advance changes to the CPI-based rate setting system.
Other powerhouse organizations that “chimed in” questioning the PRC’s authority to move forward included the Alliance of Nonprofit Mailers, the American Catalog Mailers Association, the Association for Postal Commerce (PostComm), Idealliance, and the Association of Magazine Media.
So, what’s next? March 1st marked the first phase of comments; reply comments in which commenters critique each other, are due by the end of the month.
After that, the PRC faces the task of digesting the input it has received and developing responses to comments. They can produce a revised proposed rule (presumable acknowledging the industry’s concerns); or they can issue a final rule presenting the changes it plans to implement.
A second proposed rule would repeat the comment and, perhaps, reply comment periods, while a final rule would set a timeline on which it would be implemented.
The commission’s deliberations could reasonably take at least sixty days, meaning a revised proposal or a final rule shouldn’t be expected until late May or early June at the earliest, with implementation (under a final rule) sometime later this year. If a second proposed rule were issued, that would add another sixty to ninety days, at least.
Whether a presumed late-2018 rate filing by the USPS would be impacted is unknown at this time but, regardless, nothing will change about how USPS rates are set until the PRC’s rule making is concluded.
Of course, it’s widely anticipated that a law suit in federal court against the PRC’s final rule – no matter what it is – particularly given the opinion of some commenters that the commission lacks the legal authority to do what it’s proposing. If there is litigation, the final outcome is anybody’s guess! We will keep you posted as this important issue unfolds.
The Postal Accountability and Enhancement Act (PAEA) dictated that the Postal Regulatory Commission (PRC) conduct a study of the past decade to determine if the current system for regulating rates and classes for Market Dominant Postal Products was achieving its objectives.
Those results were published on December 1, 2017 and the PRC concluded that the current system achieved some of its goals, but overall the system has failed.
The PRC issued a Notice of Proposed Rulemaking that would give the USPS the authority to raise rates by at least 2% above the CPI for each market dominant rate class for five years. It also allows for an additional 1% increase if they hit service and productivity standards, and will be required to raise prices for “underwater products” (Periodicals and Nonprofit mailings for example) by a minimum of an additional 2% above the price change authority to move prices toward full-cost coverage over time. This could drive rate increases for standard letters (officially known as Marketing Mail Letters) up by 27% and flats by more than 40% over the next five-years.
These proposed changes to the current postage rate ceilings are inflated and threaten the vitality and efficiencies of the postal service and our industry as a whole.
The PRC is an independent agency that has exercised regulatory oversight over the Postal Service since its creation by the Postal Reorganization Act of 1970. It is composed of five Commissioners, each of whom is appointed by the President and subject to confirmation by the US Senate, for a term of six years. To ensure bipartisanship, not more than 3 of the Commissioners can belong to the same political party.
The PRC is tasked with ensuring transparency and accountability of the USPS and fostering a vital and efficient universal mail system. They act as an independent regulator for engaging postal stakeholders to promote a robust mail system through objective regulatory analyses and decisions. Normally, the PRC does not have the final say when it comes to postage rate increases. That is for the USPS Board of Governors. However, this is not a rate case. This is a 10-year review of the system which the PRC reigns supreme.
The argument that the USPS has accumulated losses of $59.1 billion include the $54.8 billion needed to prefund their already financially healthy retiree health plan; even though no other entity is required to do the same.
The current regulations force the USPS to reduce costs and raise efficiencies which is needed now more than ever as many economists expect inflation to increase.
Thursday, March 1, 2018 marks the end of a 90-day comment period. There is another 30-day (one month) period allowed for replies to comments before a ruling can be implemented.
We are very active with industry associations and sit on several industry boards. Together we are fighting to prevent this travesty from happening. The industry will continue to stand united and push the USPS to focus on rate increases specifically tied to cost efficiencies only. We will keep you abreast of the situation as it unfolds.
A unique identifier (UID) is a numeric or alphanumeric string that is associated with a single entity within a given system. UIDs make it possible to address that entity, so that it can be accessed and interacted with.
Examples of Unique Identifiers:
URI-Uniform Resource Identifier is a unique identifier that makes content addressable on the Internet by uniquely targeting items, such as text, video, images and applications.
URL-Uniform Resource Locator is a particular type of URI that targets Web pages so that when a browser requests them, they can be found and served to users.
UUID-Universal Unique Identifier is a 128-bit number used to uniquely identify some object or entity on the Internet.
GUID-Global Unique Identifier is a number that Microsoft programming generates to create a unique identity for an entity such as a Word document.
UDID-Unique Device Identifier is a 40-character string assigned to certain Apple devices including the iPhone, iPad, and iPod Touch.