Many banks and credit unions rely on indirect vehicle lending as a sizeable component of their earning asset mix. However, pressure from a variety of sources should make institutions reconsider its role in that mix.
Every year Raddon publishes our set of predictions for the upcoming year. Many publications offer predictions. However, we also review the accuracy of our predictions one year later, which makes us somewhat unique in the realm of prognostication.
Here are the predictions we offered up one year ago, along with an assessment of our foresight. Overall, our crystal ball was fairly clear.
In a not unexpected development, the Federal Reserve raised short term interest rates again at its Wednesday meeting this week. This is the ninth rate hike since December 2015, and the fourth in 2018. At the meeting, the Federal Reserve also indicated that the pace of rate increases is likely to slow in 2019. What this means exactly is not certain, but the likelihood of four or even three rate increases in 2019 is not high. In fact, 11 of 17 officials expect no more than two rate increases next year.
Another Raddon conference is in the books, and what an event it was! So many factors came together to make it exceptional – insightful keynote speakers, engaging breakout sessions, Raddon Rocket cocktails, reasonably good Chicago weather – that everyone involved had a blast.
If you didn’t make it this year, be sure to plan for next year’s event. In the meantime, here are seven key takeaways from the 2018 conference about the industry and the economy.
Early in 2017 we compiled our predictions for the upcoming year. These were a mix of economic and industry predictions. How accurate were these predictions? As it turns out, we were mostly on the mark in our predictions, at least in terms of direction if not always in magnitude. Here is a review of our 2017 predictions and an assessment of the accuracy of each.
Declining overdraft income makes lower income households challenging to serve profitably. Andrew Vahrenkamp, Senior Research Analyst at Raddon, gives some ideas on how to serve these consumers effectively and efficiently.
Recent changes to the US tax code will affect homeowners with mortgage and home equity products in a number of ways. In this Raddon Report, we look at what has changed, who will be affected, the impact of the change on homeowners, and what institutions can do to market their mortgage and equity products in this new environment.
Even if they never use it, consumers still value protection on their checking accounts to avoid overdraft and non-sufficient funds (NSF) events – perhaps to the consternation of some regulatory bodies and consumer advocate groups.
At the height of our country’s financial crisis, the Federal Reserve’s Federal Open Market Committee (FOMC) adopted the policy of “quantitative easing” where it (a quasi-political arm of our federal government) goes into the marketplace to buy long-dated securities and mortgage-backed bonds to directly lower their interest rates. To be sure, this policy which adheres to macroeconomic theory helped end our country’s economic collapse in 2009 and may have helped keep our economy muddling along in the ensuing years.
Three seminal but seemingly unrelated events are suggestive of the pressures the financial services industry is likely to face in 2014. These pressures are changing the fundamental business models of financial institutions. First is the decision by US District Judge Richard Leon to send back to the Fed for revision its cap on debit card interchange.