[JST]

What would the impact be on our business if the FED raised rates ?

I understand that if/when the FED raises rates it would likely only be by a 1/4 point. However, I do think it will affect the cost of funds for certain lenders.

Just wanted to get the thoughts among the wealth of knowledge on this forum.

[channin19]

It wouldn't make much of difference. Institutional funds will still be chasing yield.

[Funder Mark]

In my own opinion, the only thing that can really cause problems for the industry is when banks start lending money again. Either because they have more confidence in the economy, or because they can charge more, meaning they can fund a riskier range of clients then they are currently able to. Curious what the people here think.

[fundgorilla]

I don't know if the rates will go up anytime soon - we've gotten a lot of chatter from Yellen already to that effect, and when you think of the risks to the credit rating of the USA is seems like the rates will stay low to minimize any possible embarrassment factor.

[mcaguru]

it may in fact help brokers with a pitch that will result in closing more deals!

[Chambo]

I don't know if the rates will go up anytime soon - we've gotten a lot of chatter from Yellen already to that effect, and when you think of the risks to the credit rating of the USA is seems like the rates will stay low to minimize any possible embarrassment factor.

If the economy keeps performing as it did last Quarter (and most expect it to this quarter), there will definitely be a rate increase in 1Q to push off inflation. Raising rates doesn't & won't have anything to do with our credit rating.

[MCAVeteran]

Funder Mark- you bring up a good point on banks lending again. Deregulation of banks is a real possibility in the near future and if this industry hits the forecast of volume in the next 2 years, banks will want a piece of it. Either through licensing current underwriting models in place (already happening) or other methods to obtain that market.

[fundgorilla]

Oh. Well, it still sounds good...

[Chambo]

Funder Mark- you bring up a good point on banks lending again. Deregulation of banks is a real possibility in the near future and if this industry hits the forecast of volume in the next 2 years, banks will want a piece of it. Either through licensing current underwriting models in place (already happening) or other methods to obtain that market.

Deregulation of banks is a real possibility? Ed, are you smoking crack?!?!

[ERS]

Say what? Deregulation of Banks is a real possibility? What reality are you residing in? lol

Our economy is dependent upon regulation of the Banking Industry... Without it, our economy would crumble and insanity would prevail!

[MCAVeteran]

Don't be too sure of reality yet- let's see what shapes up in the next few years-

http://www.forbes.com/sites/steveden...anks-are-back/

[Chambo]

“Yet Citi may regret its big victory on Capitol Hill,” writes by Rob Blackwell in the industry-friendly American Banker. That’s because “in finally getting what they wanted, big banks also thrust themselves back into the limelight in the worst possible way, simultaneously reminding the public of their role in causing the financial crisis and in their continuing influence over the various levers of the U.S government. In one fell swoop, they undid whatever recovery to their battered reputation they’d made in the past four years and once again cast themselves as the prototypical supervillain in a comic book movie.”

[Funder Mark]

I was not talking about banks lending to higher risk people, at the rates they are currently working at. If a bank is allowed to charge 20% interest, AS A ROUGH NUMBER, what happens then to us? Their underwriting would allow them to do longer deals, to people with credit that they now will not do, and be able to lend more, because their profit margin is now larger. That is the only real way I see the cash advance industry slowing down. I am NOT saying that there will be deregulation, just suggesting a scenario where they could take business from our sector.