Tag: consumer credit

  • Responsible Lending as an Emerging International Norm

    Posted by

    Jean Braucher

    The International Association of Consumer Law, with participants present from six continents, has been meeting at Brunel University in West London the last few days, hearing presentations from regulators, industry representatives, consumer advocates, and academics.   http://qwww.brunel.ac.uk/bls/research/events/ne_41734   Not surprisingly, regulation of consumer credit has been a prime focus, giving some perspective on US struggles to achieve more effective consumer financial protection. 

    Professor Iain Ramsay of the University of Kent in the UK reported on initiatives for international cooperation to enhance consumer financial protection.   The G20, World Bank, Financial Stability Board, and Organization for Economic Co-operation and Development are all on board with this goal, seeing it as an essential part of a program to ensure that the international financial system is safe and sound.  The OECD is expected to issue draft principles of consumer financial protection soon, and comments will be invited.  Given the primarily prudential role of these organizations, balance from other sectors will be important.

    Ramsay raised an underlying and overlooked question:   what is the economic and social value of consumer credit?

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  • Revolving Credit Rollercoaster

    Posted by

    Adam Levitin

    The Federal Reserve tracks outstanding revolving consumer debt in its statistical release G.19. Revolving consumer debt is primarily, but not entirely credit card debt. The G.19 statistic includes all balances outstanding, not just those that are accruing interest and fees–it includes balances from transactors, who pay off their statement at the end of the month, as well as revolvers.

    The last few months of G.19 statistics in terms of percent change at an annual rate have been a rollercoaster ride. In October and November revolving consumer credit grew at annual rates of 11.1% and 13.7% respectively. Now December has dropped to 2.7%. Any one want to share thoughts in the comments about what’s going on? It looks like we had a spike and then a sudden curtailment (in the Christmas shopping season of all times, when we usually see a jump in revolving credit)?