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Consumer Finance Weekly – DFS, BFH, OMF, BNPL, Banking, Student Loans, Cars


The appointment of Mikhail Rodos as the CEO and President of DFS marks a significant milestone for the company. Having recently led the private client group at TD Canada Trust, and with prior senior management roles at BAC and MBNA America Bank, his arrival is anticipated to bring about positive changes for DFS.


BFH has revealed the issuance of its 9.75% bonds maturing in 2029, with a total value of $600 million. This amount represents an increase from the initially announced $500 million, leading to a rise in annual interest expenses by approximately $20 million. However, this move also serves to significantly prolong the maturity dates, which is a noteworthy development for the company.


On December 13, 2023, OMF successfully issued unsecured bonds worth $700 million, due in 2030 and carrying a rate of 7.875%. The net proceeds from this issuance will be utilized to repay the remaining portion of OMF’s outstanding senior notes, which currently yield 6.125%, as well as for general corporate purposes. As a result, the impact on financing costs is expected to be only marginally higher, representing a favorable outcome compared to the issuance in May 2020.


Google Pay has revealed a test initiative in collaboration with Affirm and Zip, providing a variety of BNPL payment choices at specific clothing/accessory boutiques, cinemas, and travel bureaus in the US when utilizing Google Pay for online transactions. Upon clicking the Google Pay button while engaging in a transaction with a participating vendor in the trial program, consumers will be presented with an advertisement banner informing them of the opportunity to utilize BNPL through Affirm or Zip. This serves as a compelling demonstration of the increasing popularity of BNPL as a payment method.

Affirm, a BNPL service provider, is partnering with Blackhawk to enable customers to utilize Affirm for the acquisition of digital gift cards. Following approval, customers have the option to select from Affirm’s installment payment schemes. BNPL is gaining traction as a more prevalent payment method, although it should be noted that the purchase of gift cards is more vulnerable to fraudulent activities.

Banking Regulation

Jonathan McKeon, a member of the FDIC board, has proposed that regulators could embrace the less contentious elements of the final “Basel-3” document while deferring more contentious sections for further examination. Analysts believe that the likelihood of partial adoption remains low, but it is crucial to monitor whether others, such as Federal Reserve Vice Chair Michael Barr, will begin to endorse this approach.


The latest report from the Federal Reserve System indicates that 331 financial institutions have adopted FedNow, a real-time payment system. Launched in July with 35 initial participants, the service is anticipated to experience continued growth throughout 2024. However, it will require some time before the majority of financial institutions in the US embrace this system.

Federal Student Loan Repayment Statistics

As per the most recent data from the US Treasury, as of December 13th, the volume of repayments on federal student loans for borrowers was marginally lower in the first two weeks of December compared to the preceding month – November. The total repayment amount for December stood at $60 billion, which was less than the $64 billion in November, $83 billion in October, and $84 billion in September. Nonetheless, it marked a significant increase from December 2022, which only amounted to $14 billion.

The new rules of the FTC (Federal Trade Commission) for the car dealers

The Federal Trade Commission has updated a fresh set of regulations, scheduled to come into force next summer (on July 30), with the aim of safeguarding consumers from deceptive practices when buying a vehicle, as per an announcement from the agency. The revised regulations are projected to result in savings of over $3.4 billion for consumers nationwide and an estimated reduction of 72 million hours spent on car purchases by outlawing “bait and switch” maneuvers and undisclosed fees for disposal, as outlined in a press release from the FTC.

Analysts anticipate that the regulations will encompass supplementary offerings linked to the sale or financing of automobiles, particularly extended service contracts. It is important to mention that CACC offers dealers the chance to provide extended service contracts (vehicle warranties) through an external provider. In the third quarter of 2023, CACC’s earnings from reinsurance premiums on vehicle service contracts (VSC) totaled $20.8 million, along with a portion of earnings from accompanying products during the VSC period ($7.8 million in the third quarter of 2023) and administrative charges received under VSC agreements, classified as financing expenses.

CACC aims to ensure that these programs comply with relevant laws and regulations, although this may eventually exert pressure on revenue streams.

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