1. Consumer Finance Companies By VIVIAN TRUONG

2. ECO 6226 Abstract To examine consumer dependency on credit and how this has led to the booming growth and continued success of consumer finance companies.

3. ECO 6226 Overview Brief History The Major & Types of Finance Companies Consumer Credit & Debt Credit History & Scoring Truth in Lending Act Outlook

4. ECO 6226 Brief History First documented use of credit occurred 3000 years ago. The first advertisement for credit in 1730. “Buy Now Pay Later” System developed in 1920’s. American Express & Diner’s Club issued the first charge cards in 1950. Credit cards become a part of the information age in 1970’s.

5. ECO 6226 Major & Types of FC’s 5,000 FC’s in US $40 billion industry Products and Services Include: - private label credit cards, bank cards, auto loans & leases mortgages & home equity loans, corporate travel & purchasing cards, debt consolidation & credit insurance Major Finance Companies in US - GE, Capital One, AmeriCredit, American Express, Citigroup, Ford Motor Credit, Chrysler Fin. Credit

6. ECO 6226 Consumer Credit & Debt Current consumer debt is $4.2 trillion. Averages $12,000 for each household. 60% of Americans spend more than actual income. U.S. consumer spending accounts for around 70% of U.S. GDP. 20% of World GDP.

7. ECO 6226 Credit History & Scoring How Scoring Works Payment History Balances Outstanding Financial Stability

8. ECO 6226 The Truth in Lending Act Two key regulations. Must meet the following conditions: 1. The credit is offered to consumers. 2. Credit is offered on a regular basis. 3. The credit is subject to a finance charge 4. The credit is primarily for personal or household purposes.

9. ECO 6226 Outlook Continued strong consumer spending. Consumer confidence is up. S&P outlook is positive. Top performers in stock market.

10. ECO 6226 Sources Consumer Finance Industry by Lowell Yoder Banking and Finance by Larry Schweikart Various articles from www.businessweek.com and www.moneycentral.msn.comwww.businessweek.com