According to financialbrand.com: “Consumer credit across the board is expected to rise in 2022, in some cases still behind pre-pandemic levels but in others exceeding it, according to projections from TransUnion. Some of the growth will result from credit-hungry lenders offering more credit to nonprime borrowers, notably in auto lending, credit cards and unsecured personal loans.”
Loan servicing takeaway: More and larger loans to a broader spectrum of borrowers equate to increased loan servicing challenges. Make sure both loan servicing capabilities and capacities are up to speed now.
Are your loan servicing systems ready to address rising interest rates, ongoing inflation, and continuing pandemic impacts?
Outlook for three key consumer credit categories
|Bank credit card||67.8||69.8||51.9||69.3|
*Forecast includes Q1, Q2, Q3 and Q4 of 2022
**Forecast includes Q3 and Q4 of 2021
Notes financialbrand.com: “Overall, TransUnion cites increasing normalization of the economy as a factor in growth anticipated for 2022. A potential influence will be increases in interest rates. The Federal Reserve has indicated there will likely be at least three quarter-point hikes in 2022. Wild cards include ongoing inflation as well as the impact the Omicron Covid variant (and others) will have on the economy. Meanwhile the last elements of pandemic debt forbearance measures will be running out.”
Loan servicing takeaway: Expect more…or less…or everything in between in 2022. Rising consumer credit predictions may run headlong into punishing economic realities. Loan servicers need to be prepared for anything and everything in the coming year.