Consumer finance publications

PwC brings years of experience to provide in-depth discussion and insight to the critical issues of the consumer finance industry. Click on the following links to read our most recent newsletters and publications:

CFPB Mortgage Servicing Standards: Analysis for RESPA (Reg. X) and TILA (Reg, Z) final rules
In this joint Point of View from our Consumer Finance & Financial Services Regulatory Group, we provides our insights into key provisions of the new servicing rules both under RESPA and under TILA, including the relationships between the final rules and the rules as proposed. We also provide our perspectives on the operational impacts servicers face integrating compliance with each new provision into their servicing operations.

CFPB “Ability-to-Repay” standard
On January 10, 2013, the CFPB issued its much anticipated final “Ability-to-Repay” rule. Lenders have 12 months to implement the new requirements, which become effective January 10, 2014. To provide some insights as to the Ability-to-Repay rule, we summarize the key provisions of the rule, identify some possible impacts of those provisions; and describe some specific steps lenders can take to successfully adapt to the new rule.

Private Student Lending: The challenges and opportunities in the Consumer Financial Protection Bureau’s annual report
This point-of-view describes the 5 “forward-leaning” actions PSL industry participants should consider as part of their plan for future success.

Inside the Valuation Nexus: Strengthening your valuation program to help limit losses, reduce costs, and deliver a positive customer experience
This viewpoint helps clients to understand the best practices around managing your property valuation process.

Superstorm Sandy: Consumer finance industry perspectives
This viewpoint helps clients to understand the best practices in response to and potential ramifications of the damage caused by Superstorm Sandy.

California homeowner bill of rights: Are you ready?
This viewpoint helps clients to understand the details and potential ramifications of the California Homeowner's Bill of Rights.

A familiar foe: Combating a new wave of mortgage fraud
Mortgage fraud reports rose 31% in 2011, costing the industry $3 billion as fraudsters have changed their target from loan origination to default servicing, loan modifications, short sales, and property liquidations. This point-of-view describes the 10 steps each mortgage company should consider taking to combat mortgage fraud.

Successful integrations: Mergers and integrations in consumer finance companies
This point-of-view will help companies to assess their integration plans and can help to provide leading practices and a framework to help prevent common pitfalls.

CFPB national servicing standards proposal
The Consumer Financial Protection Bureau (CFPB) released proposed national servicing standards for comment for the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA).

Private Student Loans: An analysis of the Consumer Financial Protection Bureau and Department of Education report on the Private Student Lending Industry
This report highlights shortcomings in the practices of the Private Student Lending (PSL) industry leading up to the 2008 financial crisis and changes since then. The authors also suggest that PSL lenders focus on better underwriting, applying loss mitigation options, and on increasing transparency.

Student lending default management: A guide to improved portfolio performance
Forecasts predict the federal student loan default rate, reported by the Department of Education, will reach double digits in 2012, with no relief in sight. By understanding the causes of why student lending default continues to rise, default managers can work to insulate themselves against this trend.

The "Plan to Help Responsible Homeowners and Heal the Housing Market": A look at what it means to mortgage servicers
This document reviews President Obama's Plan to Help Responsible Homeowners and Heal the Housing Market released in February 2012 and assesses the components of the plan and its potential impact on mortgage servicers.

Enhancing origination revenue through price optimization modeling
This paper discusses the core concepts and potential profit enhancement opportunities with creating a dynamic loan pricing strategy based on customer demand by using quantitative Pricing Optimization. Several market factors, such as the current interest rate environment, population demographics, and competition, should be considered when modeling mortgage demand and the impact on price changes to consumer's price elasticity in order to realize potential improvements.

Prepare now to manage REO (real estate-owned) inventory growth
Now is the time to start strengthening your REO (real estate-owned) infrastructure to control costs and optimize returns. The predicted surge of REO properties will likely place financial institutions at risk for increased losses. These challenges not only can - but must - be overcome as the costs of maintaining and liquidating REOs will only increase as they continue to saturate the market.

Enhancing the customer experience in consumer lending
By enhancing the customer experience, lenders can open the door for increased customer loyalty and retention, more opportunities for cross-selling, and new customers - all of which can contribute to greater profitability and a better brand in the marketplace.

How to achieve tomorrow’s winning mortgage servicing model: place a ruthless focus on risk and quality
Servicers should adapt their operating model so quality and risk management permeate all aspects of their business. Risk management will become increasingly important not only for servicers to survive, but to thrive.

New supervisory guidance on model risk management: Overview, analysis, and next steps
Insights on the new supervisory guidance on model risk management that, for many in the industry, will represent a significantly higher set of expectations to meet.

Getting to Know You: Building a Customer-Centric Business Model for Retail Banks
Insights into how leading banks are improving their competitiveness and profitability by shifting to a more customer-centric model.

Too Good to Fail: Defining the New Gold Standard for Risk Management in Financial Services
The rapid changes taking place in the financial services industry have significant implications for how financial services organizations govern and manage risk. There is a need and an opportunity to re-examine and enhance most organizations’ strategies, processes, and infrastructures for measuring performance and analyzing risk.

Risky Business: Why Managing the Risks of Evolving Business Models Is the Key to Avoiding the Next Financial Crisis
This FS Viewpoint examines the lessons learned from the crisis. The results of our reviews, combined with the insights of our professionals, clients, and regulators around the world, have helped us formulate a comprehensive response to today’s risk management challenges.

Breaking the Ice: Using Transparency to Thaw the Securitization Market
Market conditions and demand, legislative reform, and innovation allowed the securitization industry to evolve from its infancy into a mainstay of the financial markets in less than three decades.

Cure for the Common Culture: Building Effective Risk Cultures at Financial Institutions
An effective risk culture can be developed through a framework that integrates the following key focus areas: leadership, governance and organization, technology and infrastructure, talent management, communication, and global operating norms. Executing in each of these areas will help an organization move towards a rich culture of risk management.

Reining in foreclosure timelines: Avoiding the high costs of delays
While mortgage servicers are reeling from expenses related to foreclosure affidavit defects, a more costly threat is poised to batter the industry: extended foreclosure timelines. Millions of loans are currently stalled in loss mitigation and foreclosure. These delays could inflict a hefty price tag on the industry based on the expenses associated with a protracted foreclosure timeline.

The Dodd-Frank Wall Street Reform and Consumer Protection Act: Mortgage Industry Considerations
When President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 ("Dodd-Frank" or the "Act"), July 21, 2010. the largest set of financial regulatory reforms since the Great Depression became law. The sweeping legislation will significantly impact every aspect of the financial services sector — and the mortgage industry is no exception.

Ready, set, change: Upcoming transformations to financial instrument accounting
As the economy begins its slow recovery, consumer finance companies now face a new business landscape. Our latest paper "Ready, Set, Change: How to Prepare for the Upcoming Transformations to Financial Instrument Accounting," addresses accounting changes currently under consideration by the FASB and IASB.

How to avoid the high cost of consumer credit losses
Having a flexible and dynamic collections program based on four critical cornerstones: segmentation, strategy, infrastructure and people, is key to minimizing future credit losses and optimizing recoveries on losses incurred to date.

Homeowner Affordability and Stability Plan: Foreclosure alternatives
This paper discusses the addition of the Home Affordable Foreclosure Alternatives Program (HAFA) to HAMP giving servicers and borrowers more attractive alternatives to foreclosure.

Changes in GAAP for auto finance companies
This paper examines the recent modifications to Statement of Financial Accounting Standards 166 and 167, and how your organization can prepare to meet the challenges they bring.

HASP: Update on considerations for mortgage servicers
This document serves to build on our previous HASP publications by providing additional considerations as servicers are in the process of implementing the plan or evaluating whether or not to participate.

Transforming collections and loss mitigation: Tackling the new realities
It’s time for a new strategy — one that meets the challenges of today's economic climate with proactive, innovative solutions for collections and loss mitigation. In this whitepaper we discuss steps servicers can take to transform their approach to collections and loss mitigation.

Customer segmentation: How to harness its profit building power
By building long-term relationships with the most valuable customer segments, companies can win over a loyal - and profitable - customer base. While each company's approach will be unique to their particular business needs, we have identified five steps that will help companies achieve the characteristics of a successful segmentation strategy.

Homeowner Affordability and Stability Plan (HASP): Update on its impact to mortgage servicers
Our point-of-view document serves to build on our previous publication, Homeowner Affordability and Stability Plan: Preliminary observations of its impact to mortgage servicers, by providing an explanation of the plan's details so that mortgage servicers are prepared for the changes. It focuses on two key components of the plan: the Home Affordable Refinance Program (HARP) and the Homeowner Modification Program (HMP).

Successful integrations: How to integrate processes, systems, employees, and customers in consumer finance companies
This whitepaper expresses a point of view on what companies can do to ensure a successful integration.