Consumer Credit in the US

PROSPECTS

Government regulations

The current administration aims to limit the role and scope of the 2010 Dodd-Frank Act, receiving significant support among heavily regulated lenders, which currently seek to expand their consumer base and credit offerings. The new bill reduces regulations on smaller lenders (financial institutions that extend 500 or less mortgages a year), relieving institutions from the obligation to disclose consumer demographics from their borrowers.

Prime and super-prime borrowers preferred

A favourable regulatory environment, in addition to low unemployment, have facilitated an increase in consumer lending. Competition has increased as alternative lenders, especially online operators, have entered the area in search of short term loans.

Uncertainty surrounding CFPB

Education lending continues to see value growth, despite concerns over higher interest rates and tightening lending requirements. Outstanding balance has continued to grow faster than gross lending and will remain stronger over the forecast period.

COMPETITIVE LANDSCAPE

Growing need for regulation of alternative lending platforms

Consumers in the US are increasingly searching for new ways to manage, spend, borrow and transfer money. Lending requirements were tightened following the recent recession, thus restricting access to traditional loans from financial institutions.

Younger borrowers in search of online lending options

Traditional financial institutions are innovating to respond to rising internet usage among younger consumers as the point-of-sale market has started to widen its appeal. Millennials are pushing financial institutions to establish mobile, sometimes online only, interfaces through which consumers may complete lending applications from their phones.

Peer-to-peer lending platforms

As lending requirements tighten, consumers are searching for alternative lending options to avoid complicated application processes. Peer-to-peer lending has become an option for borrowers seeking convenience and others who do not meet the strict credit score requirements imposed by traditional lenders.

Files are delivered directly into your account within a few minutes of purchase.