Author Archives: BEBdata

Bankruptcies Rise for 19th Month

The trend of rising bankruptcy filings continues, with Epiq Bankruptcy reporting a 22% year-over-year increase in total filings in February. This marks 19 consecutive months of growth in both individual and commercial bankruptcies. Epiq predicts this momentum will continue, as filings move towards pre-pandemic levels. Individual bankruptcy filings saw a 21% increase, with substantial growth in Chapter 7 and Chapter 13 filings. Commercial Chapter 11 filings skyrocketed by 118% in February. Bankruptcy remains a vital option for individuals and businesses seeking financial relief in the current economic climate. The American Bankruptcy Institute stresses the importance of maintaining access to this resource, particularly for small businesses. Sequentially, total bankruptcies and consumer filings increased over January’s numbers. Epiq and ABI continue to provide up-to-date bankruptcy data for analysis and reporting.

Affordability Remains An Issue For Used Cars

Sharing a great article from our friends at Auto Finance News…

After sifting through the latest quarterly data, one finding became clear to Satyan Merchant, who is senior vice president and automotive and mortgage business leader at TransUnion.
“Affordability remains an issue in the used-vehicle market,” Merchant said in a news
release as TransUnion shared its Q4 2023 Quarterly Credit Industry Insights Report (CIIR).
Reiterating that originations are viewed one quarter in arrears to account for reporting
lag, TransUnion reported the industry sustained a 4% year-over-year decline as booked contracts totaled 6.3 million.

Read more here…

Consumer BK on the Rise

The rise in consumer filers seeking bankruptcy protection is expected to continue in 2024.  Various factors, such as the pandemic stimulus reductions, increased interest rates, and historically high levels of household debt.

According to data from the New York Federal Reserve, household debt reached a record high of $17.3 trillion by the end of the third quarter, accompanied by a slight increase in delinquency rates. However, these rates remain below pre-pandemic levels.

In the past two years, both businesses and households have faced tighter financial conditions due to the Federal Reserve’s aggressive interest rate hikes aimed at controlling inflation. Mortgage loan rates surged to their highest levels since the turn of the century.

Nevertheless, borrowing costs and overall financial conditions have eased during the fourth quarter of 2023, following the Fed’s indication that it was concluding its rate-hiking cycle. Additionally, Fed officials have recently signaled their expectation of rate cuts this year.

Banks increasing buffers to prep for higher rate of defaults

Deloitte Center for Financial Services recently published a report on the 2024 Banking & Capital Markets Outlook. They stated that “banks’ strategic choices will be tested as they contend with multiple fundamental challenges to their business models.” 

Retail banks face several challenges in the coming years, including higher funding costs, slower loan growth, declining loyalty, and increasing customer defections. Despite stabilizing deposit flows, containing deposit costs may remain difficult, and new regulations on capital and liquidity requirements will be introduced. Weakened household finances will put further pressure on banks’ loan books, leading to credit tightening.

To address these challenges, retail banks must focus on fortifying customer relationships and increasing their share of wallet. Personalization will play a crucial role in demonstrating the lifetime value of customers. However, banks may struggle to customize products and services due to legacy systems and limited ability to leverage customer data for tailored experiences. Implementing advanced modeling tools that generate predictive insights and offering real-time financial advice can help overcome these limitations. Banks should also explore emerging technologies to enhance risk management, compliance, operations, and customer experiences. For instance, generative AI can expedite credit risk assessments, notify mortgage applicants of missing documents, and boost the productivity of customer-facing teams.

Retail banks currently face a convergence of pressures, including higher funding costs, competition from digital banks, and increasing demand for personalized services. The rise of embedded finance and open banking further reshapes the retail banking landscape. Customers now have more options and find it easier to switch accounts and diversify deposits across various platforms.

While deposit outflows have stabilized after a turbulent first half of 2023, challenges persist. Higher interest rates reduce borrowers’ appetite for new loans and refinancing, leading to slower growth. Delinquency rates for auto, credit card, and consumer loans have increased, prompting banks to prepare for a higher rate of defaults by increasing their loan loss provisions. In 2024, banks may tighten credit further and consider selling subprime auto loans and riskier home equity loans to strengthen their balance sheets.

Read article in its entirety here

2023 Non-Prime Automotive Financing Survey

The 2023 Non-Prime Automotive Financing Survey results showed the positive impact that non-prime auto financing can have on consumers. The data indicated the median three-year increase in FICO score for deep subprime customers was 78 points.

The findings also noted that 21.31% of consumers with auto financing moved from a FICO score of below 550 to a reading above 640.


It has been revealed in the latest edition of the New Reality Check: Paycheck-To-Paycheck research series, conducted by LendingClub Corp. in collaboration with PYMNTS, that a significant number of U.S. consumers continue to live paycheck to paycheck. The research found that 61% of U.S. consumers fell into this category in July, which is consistent with the previous month but 2 percentage points higher than July 2022. The number of individuals struggling to meet bill payments remains at 21%, representing a 2 percentage point increase from last year. Notably, more consumers across all income brackets reported living paycheck to paycheck in July compared to the previous year.


Experian’s State of the Automotive Finance Market Report revealed that average contract terms in the auto industry are continuing to decrease. This trend persists despite rising interest rates, as consumers increasingly opt for shorter-term contracts. The report highlights that this shift towards shorter terms is particularly prominent in new-vehicle financing. In the second quarter of 2023, the 1- to 48-month segment of new-vehicle financing increased to 14.58% from 9.53% in the same period last year.