Supreme Court Agrees to Hear Debt-Collections Case – BEBdata Bankruptcy Statistics
Midland v. Aleida Johnson centers on a conflict between two federal laws—the bankruptcy code and the Fair Debt Collection Practices Act
WASHINGTON—Legislation to make the bankruptcy of a big bank more feasible is gaining steam on Capitol Hill, a development that could help the largest U.S. financial firms counter criticism that they remain “too big to fail” without a taxpayer bailout.
Changes to the bankruptcy code were included in a financial-services budget bill the House passed Thursday, along with other regulatory provisions such as congressional oversight of the Consumer Financial Protection Bureau’s budget.
But unlike other provisions, the bankruptcy legislation has broad support. That gives it a chance to become law this year. Read More…
CHICAGO, IL, Aug 25, 2015 – More credit cards are being offered to subprime consumers, but delinquency rates remain low, according to the latest TransUnion, Industry Insights Report. The credit card delinquency rate (the ratio of borrowers 90 days or more delinquent on their general purpose credit cards) remained steady at 1.19% in Q2 2015. The delinquency rate was relatively unchanged read more
Together, subprime and deep subprime loans made up 19.7 percent of the market, compared with their 19.6 percent slice three years earlier, according to the source’s first-quarter State of the Automotive Finance Market report.
The Data Source defines the subprime risk category as credit scores of 501 through 600 and the deep subprime category as scores of 300 through 500.
“Over the last year, there has been a tremendous amount of conversation around the growth in subprime loans, and the concern over the automotive finance industry approaching a potential ‘bubble,’” the senior director of automotive finance, said in a statement on Monday.
Congratulations to our Joy Z for receiving the Helsley Award for Lifetime Achievement by Epicomm SW this weekend. This award has very special meaning to us as it was bestowed upon our President & CEO Ron Royall last year. Our founder, Bob Royall received the award in 1994! The award can only be won once and the winner is chosen by all previous recipients.
Congratulations to Joy Zehrbach, Vice President, Business Extension Bureau!
SHANGHAI — How much will a Chinese brand need to discount its cars to succeed in America?
Wu Song, general manager of aspiring U.S. entrant Guangzhou Automobile Group Motor Co., says he has that magic number: His cars will have to be priced 30 percent cheaper than rivals in the same segment.
If everything goes his way, Wu will be testing his bargain-basement pricing strategy with the U.S. launch of his company’s GS4 crossover sometime in 2017.
“We are confident. It could be popular in the market,” Wu told Automotive News at the Shanghai auto show. “Considering the low price, it should be competitive.”
The company’s top executive already is seeking U.S. dealers, importers and distributors.
Guangzhou Automobile, which goes by the abbreviation GAC, is the latest Chinese automaker floating plans to sell made-in-China cars in the U.S., following similar pronouncements by Great Wall Motor Co. and BYD Auto Co.
Skeptics often pooh-pooh such goals, noting the many Chinese brands that have pledged to be on sale in the U.S. in two or three years but still aren’t. But Wu’s comments shine a light on the pricing calculus they are working with.
With no true bargain brands left in the U.S. market, Chinese brands see room to make a pure price play. Read More.
On April 15 Tax Day, Americans paid about the same amount of income tax as total student loans outstanding. The St. Louis Federal Reserve on the same day published a report titled ‘Student Loan Delinquency: A Big Problem Getting Worse?’ The Fed has determined that of the $1.3 trillion in non-bankruptcy-dischargeable student loans, the delinquency rate for students in repayment is over 27 percent. With tuition at the University of California and other top schools growing faster than inflation, student loan defaults are skyrocketing. Read more.
There’s been a lot of hand-wringing in the press and financial circles lately that subprime automotive lending may have rebounded too fast or too far in recent years. And while it’s natural that all of us should remember key lessons from the 2008 financial crisis, today’s conditions in automotive subprime bear virtually no resemblance to the mortgage issues that precipitated that fateful bubble.
At Dealertrack, our view is that subprime lending today is at a healthy, rational level. We see this type of lending delivering a clear benefit to the economy in enabling more vehicles to be produced and sold and in giving borrowers an opportunity to rebuild their credit faster than nonborrowers.
Some recent media articles reflect a generally negative tone about subprime lending, often criticizing the interest rates that subprime borrowers must pay to get credit. This thinking also extends to some government regulators who argue that subprime lending is unfair and rates are too high or should be capped. Some of these same articles decry the addition of subprime lenders to the market, when in reality these new players will generally help increase competition and keep rates as low as possible for borrowers.
While our industry has seen subprime automotive lending standards ease in recent years, it’s in large part because the requirements were so restrictive in the aftermath of the financial crisis. Lenders today use far more rigorous underwriting standards than during the heyday of the credit boom a decade ago. Even the new entrants on the lending scene have access to more relevant data than before to help them make sound decisions.
The reality is that subprime loans continue to perform well for lenders, and delinquencies today remain well below precrisis levels. And while loans originating in 2010 and 2011 may perform slightly better than those originating in 2013 and 2014, it is because the older loans were established during the years of the most restrictive subprime lending conditions. Read more.
There’s a big misconception that private student loans can never be discharged in bankruptcy. People have repeated that statement so often they believe it to be a fact. The only problem is it’s not quite true.
Some private student loans are clearly eligible to be wiped away in a consumer bankruptcy. Even in a Chapter 7 bankruptcy, it takes only about 90 days to forgive the debt tax-free.
And while these special rules apply to private student loans that meet some criteria, all private students loans are no longer legally collectible once they have expired under the statute of limitations in your state… read more.