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The Ant and the Contact Lense
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Brenda was almost halfway to the top of the tremendous granite cliff. She was standing on a ledge where she was taking a breather during this, her first rock climb. As she rested there, the safety rope snapped against her eye and knocked out her. ‘Great’, she thought. ‘Here I am on a rock ledge, hundreds of feet from the bottom and hundreds of feet to the top of this cliff, and now my sight is blurry.’
She looked and looked, hoping that somehow it had landed on the ledge. But it just wasn’t there.
She felt the panic rising in her, so she began praying. She prayed for calm, and she prayed that she may find her contact lens.
When she got to the top, a friend examined her eye and her clothing for the lens, but it was not to be found. Although she was calm now that she was at the top, she was saddened because she could not clearly see across the range of mountains. She thought of the bible verse ‘The eyes of the Lord run to and fro throughout the whole earth.’
She thought, ‘Lord, You can see all these mountains. You know every stone and leaf, and You know exactly where my contact lens is. Please help me.’
Later, when they had hiked down the trail to the bottom of the cliff they met another
party of climbers just starting up the face of the cliff. One of them shouted out, ‘Hey, you guys! Anybody lose a contact lens?’
Well, that would be startling enough, but you know why the climber saw it? An ant was moving slowly a
cross a twig on the face of the rock, carrying it!
The story doesn’t end there. Brenda’s father is a cartoonist. When she told him the
incredible story of the ant, the prayer, and the contact lens, he drew a cartoon of an ant lugging that contact lens with the caption, ‘Lord, I don’t know why You want me to carry this thing. I can’t eat it, and it’s awfully heavy. But if this is what You want me to do, I’ll carry it for You.’
I think it would do all of us some good to say, ‘God, I don’t know why You want me to carry this load. I can see no good in it and it’s awfully heavy. But, if You want me to carry it, I will.’
God doesn’t call the qualified, He qualifies the called.
How a Security Response Plan Can Help Your Business Expect the Unexpected
Posted by: | Commentsby Lesley Fair
Taking steps to protect personal information in your files and on your computer can go a long way toward preventing a security breach. Nevertheless, breaches can happen. That’s why the Federal Trade Commission (FTC) recommends that companies have a plan in place to respond to security incidents before they occur. Putting together a “What if?” action strategy now may help reduce the impact an information breach can have on your business, your employees, and your customers.
Here are some tips from the FTC about customizing your company’s security response plan.
- View from the top. Senior management sets the tone for any organization’s commitment to data security. That’s why drafting, coordinating, and implementing your company’s response plan isn’t a job for a newcomer. Designate a well-respected senior official to head up your response team. Select someone with a reputation for working well with every part of your operation — sales, financial, personnel, information technology, etc. — and give him or her a “hot line” to the head of the company.
- Put a plan in place. Once you’ve put together your response team, have them draft contingency plans for how your business will respond to different kinds of security incidents. Some threats may come out of left field; others — a lost laptop or a hack attack, to name just two — are unfortunate, but foreseeable.
- Trust your gut. Experience sharpens intuition. If your staff suspects a breach, investigate it immediately. Waiting days to convene a committee or “run it up the corporate flagpole” can waste precious time.
- Pull the plug. If you suspect a computer breach, immediately sever the compromised computer’s access to the Internet and to your network. To assess the impact, ask your IT staff to preserve any available network logs, file transfer logs, system logs, and access reports. Investigate if intruders opened files or placed new programs on your computer. Did they release viruses or other malware? By diagnosing the damage and retracing the fraudsters’ steps, you can help your company shore up unanticipated vulnerabilities.
- Making contact. Consider whom to inform in the event of an incident, both inside and outside your company. You may need to notify consumers, law enforcement agencies, customers, credit bureaus, and other businesses that may be affected by the breach. In addition, about 40 states have laws addressing data breaches. Have that information on file before you need it.
For more information, read Protecting Personal Information: A Guide for Business.
Lesley Fair is an attorney in the FTC’s Bureau of Consumer Protection who specializes in business compliance.
Tebow Facebook Effort Explodes to More Than 200,000 Supporters
Posted by: | Comments“Support Tebow’s Super Bowl Ad,” the Facebook campaign launched by Americans United for Life Action in partnership with LifeNews.com, now boasts more than 200,000 people and is growing every second. This effort was started to demonstrate support for Focus on the Family’s Super Bowl commercial featuring college football superstar Tim Tebow and his family.
“The attempt by the National Organization for Women and NARAL Pro-Choice America to prevent Tebow’s commercial from airing tomorrow is out of step with mainstream Americans,” said Dr. Charmaine Yoest, President of Americans United for Life Action, “200,000 of whom took the time to join us on Facebook to show their support.”
Click here to interact with this Facebook campaign: http://www.facebook.com/TebowSuperBowlAd
Source: Americans United for Life Action is the activist arm of Americans United for Life, the first national pro-life organization.
Source: Americans United for Life Action
HONG KONG, Jan. 24 /PRNewswire/ — With the news that Chinese graft-busters have targeted officials in the Guangdong city of Maoming in their on-going anti-corruption drive, foreign businesses operating in China need to reassess their dealings with government officials to identify whether they have been involved in activities that could be perceived as bribery and put a stop to it, says The Red Flag Group.
In recent years, Chinese efforts to crackdown on corruption among government officials have mainly focused on the so-called first-tiered cities. This included the sentencing in 2008 of Chen Liangyu, Shanghai’s former communist party chief, and the dismissal of XuZhongheng, a former major of Shenzhen, both for bribery.
However, in a sign that the crackdown is turning towards emerging tier two cities, Chinese language media have reported that officials in the city of Maoming are being investigated for corruption. They include Yang Guangliang, Maoming’s vice-mayor, who was placed under detention by the Central Commission for Discipline Inspection last October. Also targeted was Cheng Bin, the police chief of Maoming Public Security Bureau, and Yang Qiang, director of Maoming’s Maogang district police bureau.
This followed other tier two city officials who have been recently netted by Chinese graft-busters, such as Chen Xizhao, deputy chief of police in the Guangdong city of Lianjiang, who was fired after it was reported that he invited 1,000 guests to a Christmas party at his residence. Also, Ye Shuyang, a former police chief in the city of Shaoguan, was arrested in 2008 and is set to stand trial for accepting more than 30 million yuan in bribes over a period of 20 years.
“Whereas previously, China’s anti-corruption drive have mainly been focused in the largest cities such as Guangzhou and Shenzhen, what we are seeing now is the effort moving towards normally less high profile places such as Maoming,” said Scott Lane, Principal and CEO of The Red Flag Group.
“What this means is that now more than ever, companies not only need to proactively assess business they have done with Chinese officials in the past, but also with any officials with whom they have established any sort of relationship, regardless of whether money has ever changed hands,” Lane said, adding that it was important to identify activities that may have supported bribery. Companies need to analyze the different transactions that have taken place, whether they are deals, the use of third parties, or giving gifts or lavish entertainment to officials.
“In a country where the provision of gifts and lavish meals is a routine part of the business dealings, companies more than ever need to make sure they can keep track of and maintain thorough records of all gifts, entertainment and travel it provides to business relationships. It is only then that managers can have the information they need to spot red flags early, and prevent activity from occurring that incurs the full wrath of Chinese fraud investigators,” Lane added.
“A company’s compliance personnel should be able to use software, such as our ComplianceDesktop Gift and Benefits Tool, to make queries. They should be able to type in the names of the officials, and see whether any gifts or entertainment had been provided to the said officials, along with details such as what they were, the cost, when it was given, and whether there were any special circumstances,” he said.
Requiring installation of no new hardware or software, the tool, which is part of ComplianceDesktop’s anti-corruption suite, adapts and automates a company’s gifts and entertainment policy by allowing for automatic approval of certain expenses which meet pre-set criteria. If a situation arises in which employees need guidance on whether they can give a certain gift to a certain official, they can access the tool using a web-based interface or a web-enabled mobile phone. By answering a number of questions, the tool can calculate whether the gift can be given according to the company’s policies, as well as any further rules or additional procedures that must be followed.
In addition, the tool also allows employees to provide detailed records whenever they are giving gifts, including details of the recipient such as their name, affiliation, and contact information. It also allows for the generation of customized reports to suit each individual company’s needs.
“ComplianceDesktop’s Gift and Benefits Tool is an inexpensive and powerful way to allow companies to keep track of all out-going gifts. This is especially so considering the enormous lost opportunity and real cost that companies can experience if they get caught by Chinese graft-buster for giving an official an appropriate gift, even if it was given with the most innocent of intentions,” Lane said.
NSBA 2009 Year-End Economic Report: Small Businesses Still Struggling
Posted by: | CommentsWASHINGTON, Jan. 20 /PRNewswire-USNewswire/ — NSBA today released its 2009 Year-End Economic Report which shows small businesses continue to struggle under the lagging economy and the ongoing credit crunch. The number of small businesses citing decreases in revenue over the past 12 months rose to its highest point since 1993, and 39 percent report they are unable to get adequate financing for their business. Despite a very dismal latter-half of 2009, however, there is small silver lining: the majority of small businesses (52 percent) expect growth opportunities in the coming 12 months.
“Availability of capital has not eased whatsoever for small businesses,” stated Todd McCracken, president and CEO of NSBA. “With most small-business owners projecting some kind of growth in the coming year, it is critical that America’s job creators, small businesses, have access to affordable capital if we have any hope of economic recovery.”
For the first time in two years, there was a slight increase in the number of small businesses who are confident in the future of their own business — up from 58 percent in July 2009 to 61 percent in December 2009. Although a positive shift, the downside is that more than one-third (39 percent) of small business respondents have concerns about the ongoing viability of their business.
According to the report, 64 percent of small-business owners reported decreases in revenues, up from 62 percent in July 2009. Job growth also continued to suffer. Despite a three-point increase in the number of small-business owners who created new jobs in the last 12 months, there also was an increase in the number who cut jobs — up from 41 percent inJuly 2009 to 44 percent in December 2009.
Looking ahead to the coming year, growth projections appear to be on an upswing. In August 2008, 57 percent projected an increase in revenues, in July 2009, only 30 percent projected revenue increases. Today, 43 percent project revenue increases. Small business owners also are projecting a net increase in jobs for the first time in over a year with 24 percent projecting job growth while 18 percent expect job cuts.
“Small businesses continue to face significant hurdles — hurdles Congress has the power to address,” stated NSBA ChairKeith Ashmus, co-founding partner at Frantz Ward in Cleveland, Ohio. “Health care costs continue to weigh heavily on small businesses with 20 percent — one in five — being forced to lay off workers due to rising health care costs.”
The NSBA 2009 Year-End Economic Report survey was conducted the last two weeks in December 2009 among 450 small business owners from across the country in every industry. Please click here to access the full report.
Since 1937, NSBA has advocated on behalf of America’s entrepreneurs. A staunchly nonpartisan organization, NSBA reaches more than 150,000 small businesses nationwide with members as diverse as the economy they fuel. For more information, please visit www.nsba.biz.
SOURCE National Small Business Association
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An Online Support Team Is The Secret To Keeping Your New Year’s Resolution
Posted by: | CommentsMyMightyTeam.com is a new free site for getting support to keep your resolutions
NEW YORK, Dec. 16 /PRNewswire/ — In one corner, a piece of exercise equipment that soon became a clothes hanger. On a shelf, a pile of diet books. On a hard drive, the first few pages of a novel. Chances are your home or office contains these or other remnants from failed New Year’s resolutions. What will make the difference this year?
“The secret to sticking with a New Year’s Resolution is having the support of other people,” says Joan Greco, founder and CEO of My Mighty Team. “You’ve got to have a support team – people who know your plan, will cheer you on when you do it, and bug you when you don’t.”
MyMightyTeam.com is a new free online service for connecting you with a support team to help you make sure that this year you keep your New Year’s resolutions. On the site, you can easily and quickly invite friends, family or co-workers to join your team and help you make progress. If you prefer, you can use MIGHTY’s Teammate Finder to suggest like-minded people to work with.
Here's how My Mighty Team works:
-- First, declare your resolution and set a goal for the week or, even
better, for the day, such as getting to the gym; keeping a food diary;
starting a business plan; or writing the first chapter of your novel.
-- Second, do it!
-- Third, report back to your team before the deadline.
You can celebrate monthly milestones with your team, and rant about the challenges along the way. You can post evidence of your progress, whether it’s a photo of a slimmer self, or the first draft for a new business plan. The teams are private and invitation-only, so what’s shared with your team stays with your team. See more about how MIGHTY helps you Keep Your New Year’s Resolution.
My Mighty Team boasts communication tools that let you and your teammates blog, text, and get updates through email or cell phones. In addition to the private team pages, public pages on the most popular resolutions (such as “I Will Exercise More,” “I Will Quit Smoking,” “I Will Find a Job,” or “I Will Write”), rank top resources and let the larger MIGHTY community share tips and experiences.
My Mighty Team is the ultimate resource for helping people accomplish their goals and live their dreams. Use My Mighty Team’s free service to start a business, lose weight, quit smoking, write a novel – or achieve any other goal you can dream up. Founder Joan Greco dreamed up My Mighty Team after working on the most venerable small team in the nation: the United States Supreme Court. A graduate of Harvard Law School and an editor of the Harvard Law Review, Greco clerked for Justice Sandra Day O’Connor.
Over half of consumers in the U.S. hold a negative position on the economy as they continue to see a decrease in household assets and an increase in personal debt
NEW YORK, Jan. 15 /PRNewswire/ — The latest information from two of TNS’ banking research studies show consumer perceptions of the U.S. economy remain predominantly negative. According to the studies, consumer perception of the economy is virtually unchanged since September, with 64% holding a negative position. But while consumer perception remains low, business executives, with revenues between $3MM and $2B, are slightly more optimistic.
After feeling slightly more positive about the near term prospects for the economy in September, consumers’ outlook shifted in a more negative direction in December. According to the study, a vast majority of consumers (66%) strongly anticipate that they will be cutting their personal spending over the next six months. “Consumers have become anxious about the high rate of unemployment, rising interest rates, the possibility of price inflation, more foreclosures, and flat or even wage deflation,” said Glenn Staada, Vice President of TNS, “We’re seeing that consumers are more often negative, not positive, about their personal situation and components of the economy in the coming months.”
While executives are more likely than consumers to say the economy will improve in coming months, the credit situation has nearly all still in cost cutting mode. 95% of businesses will continue to aggressively seek ways to cut costs in the next six months, with 52% saying this includes labor costs.
Despite their optimism, executives are resigned to the opinion that the unemployment picture in the U.S. will get worse before it gets better.
The Credit Crunch and Small Business
Amid the widespread crisis of this past year, even healthy small businesses felt the squeeze and some are still feeling it. The demand for fresh credit is great, yet the current credit shortage continues to exacerbate cash shortfalls for businesses, causing nearly all to remain in cost cutting mode well into 2010. Thirty-four percent (34%) of small businesses are anticipating that they will have trouble accessing the credit they need. “With credit not flowing, businesses continue to struggle with a diminished cash position and have concerns about their ability to acquire the credit necessary to bridge the gap,” Staada added. “With consumers and businesses hunkering down, sensitivity to rates, fees, and other pricing issues will remain a top issue for bankers in 2010.”
The impact of the credit crisis proves to be a significant pull on job creation during the economic recovery. This was reinforced last Friday when the U.S. government reported that U.S. employers unexpectedly cut 85,000 jobs in December, cooling optimism on the labor market’s recovery. Furthermore there doesn’t appear to be an end to labor cuts, especially among smaller businesses.
The Impact of TARP and What Lies Ahead
Consumer attitudes have not changed since June of 2009 when 59% felt negatively toward government bailout of large corporations, though most agree, the stress tests for Financial Services firms, credit card regulations, and limits on executive compensation have been favorable to long term stability.
While still not well-received, TARP is now less likely to create negative impressions of banks associated with the program than it was in Feb ‘09.
The percentage of businesses that feel TARP helped to stabilize the crisis increased from 5% in Feb ‘09 to 22% in Dec ‘09. However, only 6% say that TARP takers are providing easier access to credit and 55% feel that the banks have used TARP funds for purposes other than to provide credit to consumers and businesses. Staada went on to add, “The government programs helped keep the economy together and promoted the beginning of a recovery, so there isn’t this negative stigma to them now as when they first were introduced. However, the banks aren’t out of the woods yet. Most businesses feel that banks have used taxpayer money for purposes other than unfreezing credit. Given this finding, big bonuses at a time where credit is still not flowing to small businesses will continue to drive negative sentiment, especially towards the largest banks.”
Bank Image Issues
The media continues to fuel negative sentiment towards banks, with 43% of consumers and 50% of business executives saying a recent news story has left them with a negative impression of a bank or banking, in general. And, business clients of the Top 5 largest banks in the country are most likely to be left with a negative impression, at 58% “Multi-regionals and smaller banks have a PR advantage currently.” concluded Staada. “These banks should be looking to exploit this advantage. The top 5 banks need to demonstrate the ability to provide the levels of stability, credit, and service currently associated with smaller banks, but powered by the breadth of solutions, ability to customize, and scale of resources that only a large bank can maintain.”
About the Studies
The consumer findings are based on TNS Market Effectiveness in U.S. Consumer Banking research program, which is a multi-client research offering that is based on over 4,000 interviews among a nationally representative sample of American banking consumers. The research diagnoses performance across the customer experience, brand health and reputation, and marketing communications. Findings cited in this release are based on interviews conducted in June, September, and December 2009. Each field period returned over 1,000 completed interviews.
The business executive findings are based on the Commercial Banking Momentum Monitor (CBMM). This program is an ongoing, dynamic research study of mid-sized companies (U.S. based Middle Market companies with revenues $3MM-$2B) across a variety of sectors. TNS is undertaking this program on behalf of major US financial institutions. The program explores a wide range of topics of concern to company financial decision-makers.
The Bank Advisory Board is a select online community of company financial decision makers managed and operated by TNS as part of the CBMM program. Membership is by invitation only. The two surveys used for this release were fielded in February and December 2009. Interview counts were 486 and 190, respectively.
About TNS
TNS, who recently merged with Research International, is the world’s largest custom research agency delivering actionable insights and research-based business advice to its clients so they can make more effective business decisions. TNS offers comprehensive industry knowledge within the Consumer, Technology, Finance, Automotive and Political & Social sectors, supported by a unique product offering that stretches across the entire range of marketing and business issues, specializing in product development & innovation, brand & communication, stakeholder management, retail & shopper, and qualitative research. Delivering best-in-class service across more than 75 countries, TNS is part of Kantar, the world’s largest research, insight and consultancy network. Please visit www.tns-global.com for more information.
The Kantar Group
The Kantar Group is one of the world’s largest research, insight and consultancy networks. By uniting the diverse talents of more than 20 specialist companies – including the recently-acquired TNS – the group aims to become the pre-eminent provider of compelling and actionable insights for the global business community. Its 26,500 employees work across 80 countries and across the whole spectrum of research and consultancy disciplines, enabling the group to offer clients business insights at each and every point of the consumer cycle. The group’s services are employed by over half of the Fortune Top 500 companies. The Kantar Group is a wholly-owned subsidiary of WPP Group plc. For further information, please visit www.kantargrouptns.com
Commercial Mortgage Defaults in 2010: Hard Times for Some Banks
Posted by: | CommentsHACKETTSTOWN, N.J., Jan. 12 /PRNewswire/ — Commercial mortgage defaults will be highly elevated in 2010 and could wipe out profits at a number of U.S. banks.
But it does not appear that this problem will morph into a true crisis that would endanger U.S. or global financial systems.
These are the key conclusions of a research study published today by SMR Research Corp. It is entitled The Commercial Mortgage Dilemma: Banking’s Next Credit Challenge.
“The saving grace for the financial system is that most really large U.S. banks are modestly exposed,” said SMR President Stuart A. Feldstein.
For example, highly delinquent commercial mortgages recently were only 0.1% of Citigroup’s assets. JP Morgan Chase also appears “walled off” from the dilemma. Exposure at Bank of America is just slightly higher. None of the nation’s largest banks risk failure due to commercial mortgage defaults, SMR noted.
The same cannot be said for some medium-sized and smaller banks. At small banks with less than $1 billion of assets, commercial mortgages recently were 32.5% of total assets – a level of dependence six-fold higher than at big banks with $50 billion or more of assets.
As of September 30, 2009, 154 banks had highly delinquent commercial mortgages equal to 3% or more of their total assets. In a reasonably good year, banks earn profits of only about 1% of assets. Many of these institutions will be hard-pressed to make any money in 2010, SMR said. Some could become insolvent.
The study includes specific 2010 risk rankings for each of the nation’s 477 largest bank holding companies.
As of late 2009, the 90-day-plus delinquency rate on all commercial mortgages (including multi-family apartment building loans and commercial construction loans) was rising fast. It reached 5.59% on September 30, up from 3.51% just six months earlier.
Meanwhile, the vacancy rate on apartment buildings had reached its highest level since at least 1965. Vacancy rates were high as well at shopping centers and office buildings. The total commercial mortgage loan market was $3.4 trillion as of the third quarter of 2009.
Despite the gloom, SMR found reasons for cautious optimism.
Among them: The early-stage delinquency rate on commercial mortgages appears to have peaked in the first quarter of 2009.
In addition, overall delinquency and write-offs on commercial mortgages were still below levels seen in the last commercial lending crisis in 1991.
“If the economic recovery continues apace, the new commercial mortgage crisis may peak in 2010 and improve in 2011,” Feldstein said.
SMR utilized more than 150,000 regulatory financial reports from banks and thrifts to present an 18-year history of commercial mortgage credit figures, from 1991 to 2009.
The firm also tapped its property records database to calculate recent foreclosure rates on commercial properties by type, by state, and by metro area.
Multi-family apartment buildings had the highest foreclosure rate. Properties dependent on consumer discretionary spending – including greenhouses and car washes – also showed high foreclosure rates.
Foreclosure rates were low at churches, medical buildings, funeral homes, and private schools.
Some local markets with high home foreclosures also had high commercial foreclosures, including Arizona and Florida. But the correlation wasn’t perfect. Hawaii, for example, showed a high commercial foreclosure rate as the falloff in tourism clobbered hotels and restaurants.
The SMR study spans 130 pages and is available to clients in print and electronic versions. Free copies are not available, but SMR personnel are available for interviews.
Founded in 1984, SMR Research Corp. is the nation’s largest provider of industry research studies on lending subjects. More details about the new study’s content can be found by following this link: Commercial Mortgage Dilemma.
Equifax Data Show U.S. Consumer Payment Trends Continue to Deteriorate
Posted by: | CommentsBank card, home equity, mortgage delinquencies all up
ATLANTA, Dec. 22 /PRNewswire-FirstCall/ — Consumer delinquency rates for bankcards, first mortgages and home equity lines of credit again rose month-to-month in November, according to Equifax Inc.’s (NYSE:EFX) monthly Credit Trend Report.
Home mortgages at least 30 days late reached another record of 7.91 percent in November (in total dollars), up from 7.76 percent in October and 7.65 percent the previous month. This record rate is a significant increase over the 5.83 percent rate of November 2008 and the 3.93 percent rate of November 2007.
In addition, home equity lines of credit (HELOC) available to consumers are now an estimated $68 billion lower and the number of accounts is an estimated 855,000 lower than the September 2008 peak of approximately 14.5 million accounts. This represents an improvement from October when outstandings were $77 billion lower and accounts were lower by approximately 934,000. Delinquency rates have crept up from 3.39 percent in October to 3.43 percent in November. These rates far exceed the 2.95 percent rate of November 2008 and the 1.92 percent rate of November 2007.
“The story of 2009 continues to be one of consumer retrenchment and credit tightness as people strive to pay down debt or are forced to abandon it, and lenders more aggressively manage risk in their portfolios,” said Dann Adams, president of Equifax’s U.S. Consumer Information Solutions.
U.S. consumers reduced their debt by more than five percent or $575 billion from a year ago. First mortgage debt dropped 5.4 percent; credit cards by 7.3 percent and auto loans by 9.5 percent. The declines put overall consumer debt at September 2007, pre-recession levels of about $11 trillion.
Bankcard issuers continued a year-long trend of closing accounts and reducing credit lines. Card risk management programs have accelerated since July of 2008, reducing card credit lines by $803 billion and the number of accounts by 93 million. Delinquency rates for bankcards picked up notably since the end of 2008 in tandem with rising unemployment. The November 2009 60-days-past-due rate of 4.62 percent is almost a full percent higher than the November 2008 rate of 3.76 percent. However, the rate still remains below the peak of 4.79 percent in May 2009.
In addition, the number of bankcard accounts opened in September — 2.4 million — was 45 percent lower than September 2008. Year-to-date, the number of new accounts is down 46 percent from the same period in 2008. Also, lenders are being more selective about who they give credit to as the percent of cards issued to those with credit scores greater than 740 grew from about 30 percent in 2007 to almost 51 percent so far this year.
With U.S. home prices declining, originations for home equity lines of credit are also declining. In September of this year (the most recent month that data is available) originations were 75,600, 36% below the September 2008 total of 117,800. Year-to-date 2009 new home equity lines opened — 761,000 — were 47 percent below 2008 year-to-date totals of 1.5 million. This continues a trend from 2008 when total originations were 1.7 million lines, 41% below the total for 2007 (2.9 million lines).
Furthermore, home equity lines have primarily been issued to lower-risk consumers. Eighty-one percent of the consumers who received HELOCs in September 2009 were considered low-risk (Equifax Risk Scores of 740 and above) an increase from 66% in September of 2007. In conjunction with declining home prices and home equity, average home equity lines are 25% lower over the past two years, declining from approximately $105,000 to $79,000 today.
“The contraction in home equity lines is a reflection of the credit crunch both consumers and small businesses are facing,” said Adams. “Restrictions in this traditional source of financing make finding credit harder than ever.”
Regionally, home equity line originations have diminished in states where home price values have been the most volatile, notably California and Florida. California comprised almost 20% of line originations two years ago with nearly 38,000 originations in September 2007 but dropped to second with about 7% or 5182 originations in September 2009. Florida, once the second top state by originations has dropped to ninth.
The dramatic impact of these shifts is illustrated by new credit lines available in California declining from $6 billion in September 2007 to well under $1 billion today.
Data for the Credit Trends Monitor Report is sourced from Equifax’s nearly 200 million files of US consumers using credit.
About Equifax (www.equifax.com)
Equifax empowers businesses and consumers with information they can trust. A global leader in information solutions, we leverage one of the largest sources of consumer and commercial data, along with advanced analytics and proprietary technology, to create customized insights that enrich both the performance of businesses and the lives of consumers.
With a strong heritage of innovation and leadership, Equifax continuously delivers innovative solutions with the highest integrity and reliability. Businesses — large and small — rely on us for consumer and business credit intelligence, portfolio management, fraud detection, decisioning technology, marketing tools, and much more. We empower individual consumers to manage their personal credit information, protect their identity, and maximize their financial well-being.
Headquartered in Atlanta, Georgia, Equifax Inc. operates in the U.S. and 14 other countries throughout North America, Latin America and Europe. Equifax is a member of Standard & Poor’s (S&P) 500® Index. Our common stock is traded on the New York Stock Exchange under the symbol EFX.
Source: Equifax Inc.
LowerMyBills.com(R) survey data reveals that the recession has inspired 55 percent of consumers to proactively avoid credit card debt
LOS ANGELES, Dec. 14 /PRNewswire/ — LowerMyBills.com®, a part of Experian, today released the results of a survey of 2,852 online auto insurance shoppers who had just completed a rate-quote request form on LowerMyBills.com. This survey was conducted between Nov. 11 and Dec. 8, 2009. Survey data shows that the recession has had a significant impact on consumer behavior and attitudes surrounding holiday credit card debt.
Recession drives down the number of consumers planning to carry holiday debt When LowerMyBills.com consumers were asked if the recession has changed their feelings about carrying credit card debt, 55 percent revealed that the recession has inspired them to make a more proactive effort to avoid incurring any or more credit card debt. This proactive attitude has influenced changes in consumer behavior toward holiday credit card debt year over year. This year, 21 percent of consumers expect to have credit card debt after January 2010 from the 2009 holiday season. This number has decreased from last year, when 26 percent of consumers carried credit card debt after January 2009 from the 2008 holiday season.
Recession sparks plans for paying off holiday debt more quickly Not only has the number of consumers planning to carry credit card debt gone down this year, but those consumers who plan to carry holiday credit card debt after January 2010 are planning to pay it off faster. Of the consumers planning to carry holiday credit card debt after January 2010, 24 percent will pay it off in one to two months. Last year, of the consumers who carried credit card debt after January 2009 from the 2008 holiday season, 18 percent paid it off in one to two months.
Effects of the recession are the cause of consumer credit card debt concern Survey data also examined the reasons why the recession is influencing consumers to change their behavior. Of the consumers who stated that the recession has inspired them to proactively try to avoid incurring any or more credit card debt, 69 percent cited higher credit card interest rates as a reason for their proactivity. Thirty-eight percent of consumers included the proliferation of information about the impact of carrying credit card debt as a reason for their proactivity. Thirty-seven percent cited the potential damage to their credit score. Thirty-seven percent included the potential of losing their job and being unable to pay off their debt. Most of these reasons are directly tied into some of the key impacts of the recession, including higher credit card interest rates, increased unemployment rate and increased financial awareness.
Recession causes consumers to plan strategies for avoiding debt In order to avoid the potential problems associated with holiday credit card debt in the recession, consumers are implementing a variety of strategies. Of the consumers who are planning to stay holiday debt-free and are making a proactive effort to do so, 66 percent indicated they are sticking to a budget. Fifty-two percent included making a concerted effort to save money on all their holiday purchases as one of their strategies for staying debt-free. Forty-two percent included saving money prior to the holiday season for holiday spending. Twenty-six percent included cutting back in other areas as a strategy to stay holiday debt-free.
Source: LowerMyBills.com
