Q: I read this morning in the G&M there’s a push by consumer advocates for government legislation to be broadened to include restricting highly profitable credit insurance charges by alternative lenders. To what extent is even the threat of this a headwind for Goeasy and Propel? As as second question, should this restriction find its way into legislation, to what extent would this impact Goeasy and Propel?
5i Research Answer:
Both companies offer this, but 'charges and fees' are a very tiny part of GSY's revenue. ($7M of $383M last quarter). Neither company specifically breaks out this product, but PRL did launch a new product targetting this area in April of this year. So, restrictions would impact the company, but not likely in a material way, or at least as far as can be determined by current disclosures.