The average consumer will spend $7041 on holiday related purchases. Debt consolidation loans represent 51% of all loans on Prosper, and have shown consistent growth over the past 5 months. Peer-to-peer (P2P) lending can replace high credit card interest rates and constantly changing monthly payments with lower rates and fixed, predictable payment terms. Data shows that even as consumers were preparing to spend money on gifts for this year, more than 14.1 million of them were still paying off holiday-related spending from last year, up from 13.6 million in 20092. Interest rates on Prosper.com start at 6.59%4 APR for best borrowers. Fixed rates range from 6.59% to 35.84% APR.
Celebrating its 5-year anniversary, Prosper.com will run a special one-day promotion for borrowers, holding all for new loans submitted on February 17, 2011, the Company will cover the borrower’s second month’s payment up to $300. Intent on removing barriers for borrowers, the website offers social and financial benefits for individual investors. Prosper lenders and borrowers have more than 1 million members and approximately $220 million in funded loans. Prosper’s five years of experience and actual P2P lending data and risk management team lets borrowers get rates as low as 5.9% APR.
Twitpay social media payment technology now has money to grow thanks to TomorrowVentures and CompuCredit Holdings. Having secured its undisclosed growth funding, Twitpay can expand its existing service offerings and continue its focus on serving nonprofit organizations looking to raise funds directly over Twitter, social gaming developers offering virtual currency and retailers facilitating social commerce. This is in conjunction with its recently announced a partnership with Incomm to offer social gaming publishers access to a customized promotion and lead generation platform designed specifically around the social gaming model. The first social gaming campaign is due out in early 2011. Twitpay ultimately touts itself as a provider of payment systems solutions for social media networks.
Prosper.com peer-to-peer lending marketplace with over one million members and $214 million in funded loans announced that interest rates have been reduced on many loans. With this, rates on new loans for Prosper borrowers with better Prosper Ratings will be significantly lower by as much as 2.66%. Loans listed by borrowers on the site are funding at a rate of nearly 100%, allowing for the lower rates. Prosper Marketplace peer-to-peer lending marketplace has over one million members and more than $214 million in funded loans.
George Coutros has been appointed Chief Operating Officer (COO) with FSV Payment Systems prepaid debit card products and processing services. Bringing with him 20-years’ financial services experience, Coutros will manage FSVâs overall operation and will help shape the companyâs strategic direction. Throughout his experience, George has served in senior executive positions most recently with CompuCredit, NetBank, Bank of America and Equifax. He holds a BA in mathematical sciences from Johns Hopkins University and a MS in statistics from North Carolina State University.
Moody’s Investors Service has downgraded the ratings on three classes of asset-backed notes issued by the
CompuCredit Acquired Portfolio Business Trust (“APBT”). Placed under review for downgrade four classes
of notes issued by the APBT, and all five classes of rated notes issued from the CompuCredit Acquired
Portfolio Voltage Master Business Trust (“Voltage MBT”), these notes are all backed by revolving pools of
primarily sub-prime, unsecured, general purpose VISA credit card receivables. Collateral performance has
deteriorated since 1H/09 and the company’s ability to renew one of its key funding sources remains in
question. CompuCredit filed WARN notices with several state labor departments, indicating the company’s
intention to reduce headcount across its servicing and customer service call centers. CompuCredit
reductions in staffing or
disruptions in operations may further compromise the ability to collect outstanding
receivables and a subsequent increase in charge-off rates.
Debt collector Encore Capital Group posted a 29% increase in gross collections for the third quarter of $125.7 million. Net income was $9.0 million, compared to net income of $3.0 million in the same period of the prior year. Investment in receivable portfolios was $77.7 million, to purchase $2.2 billion in face value of debt, compared to $66.1 million, to purchase $1.8 billion in face value of debt in the same period of the prior year. Revenue from bankruptcy servicing was $3.9 million, a 3% increase over the same period of the prior year.
During the third quarter, ECG settled a pending legal dispute with Jefferson Capital Systems and its parent, CompuCredit. Under the terms of the settlement, all of the parties’ obligations relating to the purchase and delivery of accounts under a 2005 deal were satisfied through Encore’s purchase of a large portfolio of charged-off credit card accounts on commercially reasonable terms and the resumption of the balance transfer program with Jefferson Capital. For more details on Encore Capital’s third quarter performance visit CardData (www.carddata.com). (CF Library 9/9/09)
San Diego-based debt collector Encore Capital Group has settled a pending legal dispute with Jefferson Capital Systems and its
parent, CompuCredit. Under the terms of the settlement, all of the parties’ obligations relating to the purchase and delivery of accounts under a 2005 deal were satisfied through Encore’s purchase of a large
portfolio of charged-off credit card accounts on commercially reasonable terms and the resumption of the balance transfer program with Jefferson Capital. Encore last month reported $78.0 million in revenues and $6.6 million in net income for the second quarter, a year-on-year gain of 11.4% and 6.5%, respectively. Investment in receivable portfolios was $82.0 million, to purchase $1.9 billion in face value of debt, compared to $52.5 million, to purchase $1.8 billion in face value of debt in the same period of the prior year. For complete details on Encore Capital Group’s second quarter performance visit CardData (www.carddata.com). (CF Library 7/31/09)
GA-based branded card marketer CompuCredit and CompuCredit Holdings
Corporation have completed a reorganization establishing CompuCredit
Holdings Corporation. as a Georgia holding company. Under a plan of
reorganization approved by CompuCredit Corporation
shareholders on June 29, 2009, CompuCredit Corporation became a wholly
owned subsidiary of CompuCredit Holdings
Corporation and the former shareholders of
CompuCredit Corporation became shareholders of CompuCredit Holdings
Corporation, with the same number and percentage of shares of
CompuCredit Holdings Corporation as they held of CompuCredit Corporation.
The common stock of CompuCredit Holdings Corporation will commence
trading on the NASDAQ Global Select Market on July 1, 2009 under the
ticker symbol “CCRT”
Atlanta-based sub-prime card specialist CompuCredit reported a first quarter 2009 GAAP net loss from continuing operations attributable to controlling interests of $112.5 million and a first quarter 2009 managed loss from continuing operations attributable to controlling interests of $121.6 million, or $2.59 per fully diluted common share, which compares to first quarter 2008 managed losses from continuing operations attributable to controlling interests of $103.3 million, or $2.21 per fully diluted common share. On January 1, 2009, CompuCredit implemented FASB Staff Position APB 14-1 “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)” to account for CompuCredit’s outstanding convertible senior notes. As a result, prior periods’ consolidated financial statements have been retrospectively adjusted to present them as though APB 14-1 were effective in those prior periods. CompuCredit’s management, analysts, investors and others believe it is critical that they understand the credit performance of the entire portfolio of CompuCredit’s managed receivables because it reveals information concerning the quality of loan originations and the related credit risks inherent within the securitized portfolios and CompuCredit’s retained interests in its securitization facilities. For complete details on CompuCredit’s fourth quarter performance, visit CardData ([www.carddata.com](http://www.carddata.com)).
Atlanta-based sub-prime credit card specialist CompuCredit reported a
net GAAP loss for the fourth quarter of $26.8 million. Total managed
receivables dipped by 32% year-on-year for the fourth quarter ending at
$3,121,682,000. The issuer says it is focused on capital preservation,
account management, and expense reduction. CompuCredit’s net interest
margin was 13.8% in the fourth quarter, as compared to 17.8% for the
fourth quarter of 2007 and 15.1% in the previous quarter. The adjusted
charge-off rate was 14.2% in the fourth quarter, as compared to 13.2%
for the fourth quarter of 2007 and 14.2% in the previous quarter. As of
December 31, 2008, the 60-plus day delinquency rate was 16.3%, down from
18.4% as of December 31, 2007 and up from 13.1% as of September 30,
2008. At the end of the quarter, CompuCredit had 3,993,000 accounts,
compared to 5,306,000 in 4Q/07. For complete details on CompuCredit’s
fourth quarter performance, visit CardData ([www.carddata.com](http://www.carddata.com)).
COMPUCREDIT NET INCOME (GAAP)
4Q/06: $ 9.7 million
1Q/07: (-$ 2.5 million)
2Q/07: (-$11.0 million)
3Q/07: (-$53.2 million)
4Q/07: $15.8 million)
1Q/08: ( -$2.5 million)
2Q/08: (-$44.9 million)
3Q/08: (-$32.3 million)
4Q/08: (-$26.8 million)
Source: CardData (www.carddata.com)
While some top issuers have pulled back on the marketing of business
cards, the performance metrics of a business card specialist reveals the
rapid meltdown during the current 15-month old recession. Advanta, with
one million business credit card accounts and about $5 billion in
outstandings, has progressed in four quarters from an issuer with
charge-off ratios below industry averages to an issuer plagued with
charge-offs about twice the industry average. As a matter of fact
compared to the fourth quarter of 2007, Advanta’s charge-offs have
nearly tripled. According to CardData (www.carddata.com), Advanta’s
quarterly charge-offs for 2007 hovered between 3.3% and 4.1%. In 2008
charges-off exploded from 6% in Q1, to 8% in Q2, to 10% in Q3 and to 12%
in Q4. During the same period in 2008 average charge-offs for the
industry increased from 4.6% to 6.0%. In response, the issuer has
tightened underwriting, closed accounts more than 30 days past due and
is now charging interest rates as high as 37.18%, (the highest APR ever
charged by a non sub-prime issuer.) Among sub-prime issuers, CompuCredit
has charged rates above 40% for some of its card products, according to
CardTrak ([www.cardtrak.com](http://www.cardtrak.com)). For complete details on Advanta’s latest
performance visit CardData ([www.carddata.com](http://www.carddata.com)).
4Q/06: 3.4% 3.8%
1Q/07: 3.3% 3.9%
2Q/07: 3.5% 3.7%
3Q/07: 3.9% 4.1%
4Q/07: 4.1% 4.2%
1Q/08: 6.4% 4.6%
2Q/08: 8.4% 5.3%
3Q/08: 10.0% 5.5%
4Q/08: 12.0% 6.0%
Source: CardData (www.carddata.com)