Friday, October 19, 2007

Capital One Reports Delinquencies on the Rise For Credit Cards, Car Loans

by Bill McBride on 10/19/2007 02:08:00 AM

From the WaPo: Capital One Reports Loss From Closing Mortgage Unit

Capital One Financial of McLean posted its first quarterly loss ever, from the expense of shutting down its mortgage lender, and warned of additional challenges in the credit card and auto finance businesses.
Yesterday's announcement offered a glimpse into how the credit crunch might affect other areas of lending.

Capital One reported an increasing number of delinquencies and defaults in both the credit card and auto finance sectors. As a result, the company said its expenses associated with covering bad loans have increased.
There are signs that the collapse in the mortgage markets has taken a toll on consumer spending, said Scott Hoyt, director of consumer economics at Moody's
"If [credit card issuers] were to cut back significantly, that would have the potential to be a blow to spending," he said.