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Consumer Finance

February 3, 2016

Citing the current volatility in US equity markets, non-bank consumer lender Elevate has decided to withdraw its proposed initial public offering of common shares. 

September 7, 2015

World Acceptance gets by because they underwrite based upon ability-to-refinance.

July 17, 2015

What is going on in Spartanburg?

December 9, 2014

Conn's policy of offering credit to just about anyone is catching up with them. Even though they can generate extremely high margins on retail sales, the loss rates on their in-house financing wipe out that income. The ship is sinking.

November 20, 2014

On Tuesday, seven banks renewed their credit agreement with World Acceptance. The new $630 million line of credit runs through November 2016. While BB&T had been party to the previous relationship, it declined to participate this time. As well, TD North says that it will drop out in June of next year.

October 24, 2014

I looked at the S-1 released by Citi in connection with their proposed initial public offering ("IPO") of shares in the OneMain Financial subsidiary. OneMain is a national consumer finance company with more than $8 billion in loans on its balance sheet. They also sell several types of add-on insurance products. Here are a few of the things that stood out to me.

October 22, 2014

What I took away from World Acceptance's investor call this morning: a) they are going to try a new incentive system for branch managers which might help them to extract more cash from past due accounts, but which definitely allow them to make otherwise-charged-off loans appear to be active until the end of the 2015 tax season. b) they are building on a novel way of collecting on loans in Mexico c) they are not going to use risk-based pricing d) they think there might be something to this whole internet concept, after all.

October 1, 2014

When is zero not really zero? When it is not really zero. At Conn's, zero is 22 percent in two of every three cases.

September 26, 2014

New Rule Would Add Protections for Servicemembers Targeted by Abusive Credit Providers

Reinvestment Partners applauds the Obama Administration and the Department of Defense’s effort to close loopholes in the Military Lending Act (MLA). The proposed rule, if adopted, will help to protect the financial security of our servicemembers by preventing lenders from offering abusive loans to servicemembers or members of their family.  Previous efforts to prevent abusive lending have been widely ignored by payday lenders and others who have modified products to evade protections put in place in 2007.

September 15, 2014

First lesson in how to manage strategic communications for any large, consumer-facing company: if you are facing a critical New York Times story, answer the phone and speak to the reporter.

Lesson Two: If at possible, make some effort to ameliorate the problem with the specific customer in question.

Lesson Three: Let a decision-maker speak on behalf of the company. It is important enough that someone from the Board or in a C-suite position should take the responsibility for representing the beliefs of the company. It is not the right strategy to put it in the hands of an executive assistant. It the assistant's rejoinder could be intrepreted as dismissive, then the results will likely be worse.