From the Desk of Roger Douville

The economy continues to recover and the stock market continues to set new records. However, household incomes have not kept pace with the recovery and household debt has made a comeback fueled by consumer optimism. Debt continues to escalate and income remains flat to slightly increasing for most households. We expect wages to increase gradually in the coming year however the majority of households have elevated household debt, namely revolving debt, to maintain lifestyle. As a result, we see the gap between earnings and debt widen for consumers in all parts of the country.

According to the U.S. Census Bureau, Credit card debt continues to rise with the average household carrying over $16,000 in credit card debt on an average of approximately 3 cards (*TransUnion) per person. Consider also the rise of unsecured debt from Peer to Peer lenders adding to the overall credit burden of today’s consumers.   

So maybe lender focus needs to change? Surely, I’m not suggesting that we throw away prudent underwriting guidelines. But I am suggesting that we set new expectations by more accurately predicting the new reality we are faced with. Lenders must adapt to an environment where the consumer is being squeezed between escalating debt and stagnant wages and consider a fresh approach in managing their loan portfolios. The job of protecting from losses is too large to be managed solely on the front end at underwriting. We must build budgets with appropriate loan loss reserves that set clear and realistic profitability expectations.

Maybe it’s time to modify our thinking as to what are “acceptable” loss rates and build new yield projections in our business models to maintain the margins we need to grow our businesses. Finally, we must rethink the way we collect and liquidate the collateral we take in and spend the money needed to acquire talent in these areas. Use multiple repossession agents, auction houses, and consider hiring a liquidation specialist that creates a dedicated dealer network that can recondition and/or purchase your collateral. The addition of a recovery specialist to collect and recover past charge offs is also money well spent.  

Overall, consumer debt is increasing and times are changing. Though there is no simple solution or response to this new climate, it is important to re-evaluate current efforts to consider new avenues for both helping consumers and maintaining profitability.

All the best,

Roger Douville

Thanksgiving turkey transport tips

Thanksgiving is just around the corner, and for a lot of us, that means gathering with loved ones to appreciate life’s blessings, watch football, and chow on an immense amount of turkey, stuffing, mashed potatoes, green bean casserole, and pie. Often, when extended family and friends come together, different elements of the Thanksgiving meal are prepared at each household and brought to the meeting place. How does one safely and successfully transport the Thanksgiving Day necessities to and from its destination?

Even on Thanksgiving, safety is first. Loose items in vehicles can be both a cause and effect of auto accidents, causing injury in both scenarios. Just as it is important for passengers to buckle up, securing all delicious food is important, too. Here are a few ways to keep food fastened:

Use a laundry basket. This common household item will help to both carry multiple dishes at once and keep them from rolling or tipping during transport.

Secure with bungee cords. If you’ll be going on winding or rough roads, or are simply still worried about spillage with the laundry basket, bungee cords can provide an extra level of security to keep the basket from sliding or tipping.

Have beach towels handy. Beach towels can be placed between dishes to buffer any movement and protect against broken glass. But,beach towels serve more purposes than just safety. Dishes can be wrapped in beach towels for insulation and for easier carrying. Additionally, lining the trunk or seats with towels can protect your vehicle’s interior in case a spill does occur.

Hold dishes in your lap. If there are passengers on your trip and the dishes aren’t too hot, line their lap with a towel and have them hold the food themselves until arrival. Because they’re on a relatively flat surface and are being actively monitored, this is a good way to avoid spills. However, it seems to invite taste testers to sneak a sample before the meal begins.

For the turkey specifically, transportation can present a particular challenge – especially if you plan to cook it beforehand. Because the bird is so heavy and needs to be kept warm, it requires both stability and insulation. Here’s what we recommend for turkey travel:

Use a covered roasting oven with handles. These relatively inexpensive appliances will allow you to cook, transport, and serve the turkey in the same dish. Roasting ovens insulate heat well, so they will keep your bird warm for a decent amount of time before arriving at your destination.

Cook your turkey in a Reynolds oven bagThese bags store moisture , flavor, and mess, until opened. So, cook your turkey, grab the bag, and place it in any foil-lined, insulated, storage pan of your choice.

Transport in a cooler lined with foil. Though special hot/cold coolers exist and are pretty inexpensive, if you don’t already have one, a regular cooler lined with foil should do well for a short trip.

With these tips in mind, you are now more equipped to have a safe, spill-free, delicious Thanksgiving holiday with family and friends.