US employment rose by 312 k in December, the most in 10 months, and average hourly earnings rose by 3.2% YoY, signifying broad-based gains in jobs and wages. The economy remains on a strong footing despite equity and credit market volatility.
Real new bank credit fell below 1% at the end of 2018. This is a mixed indicator of a recession as there have been 9 recessions since the 1950s after real new bank credit has fallen below 1%, but also about 6 false signals as well.
Source: Federal Reserve, BEA, PeerIQ
Governor Cuomo has nominated Linda Lacewell, his former Chief of Staff, to run the New York Department of Financial Services. Lacewell was the architect of OpenNY, a state-of-the-art open data initiative. PeerIQ’s view is that this change is a win for the FinTech sector. The prior head of NYS DFS, Maria Vullo, challenged the OCC’s regulatory authority to issue national bank charters to FinTechs, while Lacewell is expected to be friendlier towards innovative FinTechs.
This week, we look at PeerIQ’s Benchmarking methodology. We also present PeerIQ’s Consumer Credit Digest (in pdf format) for insights on consumer credit performance.
PeerIQ’s Benchmarking Methodology and Whitepaper
We look at PeerIQ’s Benchmarking methodology below. As the market for consumer credit expands and matures, there is an ever-greater need for both investors and originators analyze their loan portfolios performance relative to a relevant benchmark.
Benchmark analysis is a necessary tool for loan investors, who currently have limited tools to effectively understand how they are performing vis-a-vis the overall market. With the appropriate benchmark, attribution analysis allows investors to identify where their portfolio is under or over-performing and what actions they can take to improve portfolio returns.
PeerIQ has released a White Paper on our Benchmarking methodology. The white paper delves into:
- What Questions Can Benchmarking Answer
- How to Build an Appropriate Benchmark
- The Brinson–Fachler Model Framework for Benchmarking Analysis
- Using PeerIQ’s Benchmarking App in Practice
Do reach out to learn how you can utilize our benchmarking app to evaluate the performance of your loan pools!
Consumer Credit Digest – Get an Edge on US Consumer Credit
Looking for insights into how consumer credit has performed during prior periods of market volatility? How are US consumers performing today across asset classes? How are prepayments and losses trending in the personal loan and subprime auto space?
The Digest, published monthly and powered by the TransUnion credit file, is a detailed market report and summary data that allows the reader to track trends in consumer credit with the following features:
· Robust data & coverage, representing the full credit file back to 2000
· Custom metrics and charts, including refinance and attribute migration
· Key stratifications, including risk, age, originator type (e.g. Fintech)
Download a free trial version of the report or contact email@example.com to learn more. The report is also available in PDF format.
- Payrolls Rise 312,000, Wages Top Estimates in Jobs Blowout (Bloomberg, 1/4/19) US employment rose by 312 k in December, the most in 10 months, and average hourly earnings rose by 3.2% YoY, signifying broad-based gains in jobs and wages.
- Governor Cuomo Announces First Round of Term 3 Administration Appointments (NY State, 1/4/19) Governor Cuomo has nominated Linda Lacewell, his former Chief of Staff, to run the New York Department of Financial Services. PeerIQ’s view is that this change is a win for the FinTech sector.
- Why banks shouldn’t make online banking too easy (American Banker, 12/27/18) A paper published at Georgia Tech argues that friction in lending allows borrowers to make smarter decisions.
- Bank Accounts Designed for Low-Income Customers Find Broader Audience (WSJ, 1/3/19) No-frills bank accounts are popular with millennials and cost-conscious customers, and are driving new account openings at banks.
- A $150,000 Small Business Loan—From an App (WSJ, 12/28/18) Square Capital analyzes business transactions and other borrower data to offer small-business credit as it pushes to grow its lending footprint.
- Podcast 180: Kevin Tweddle of Independent Community Bankers of America (LendAcademy, 12/21/18) The head of innovation at the ICBA talks about how community banks are more open to partnerships with fintechs due to better education. A transcript of the podcast is here.
- This is the first picture of the moon’s far side taken by China’s probe after it landed (MIT Technology Review, 1/3/18) Pink Floyd fans can celebrate our first picture of the dark side of the moon.