timelets | A Maria Antoinette moment

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Wilbur Ross, a billionaire and the current Commerce Secretary, doesn't understand why federal workers who don't get paid can't get a loan from a bank.

"Wilbur Ross 'Doesn't Understand' Why Furloughed Workers Need Food Banks | Hallie Jackson | MSNBC" (Watch on YouTube)

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From:

malobukov

Banks do not do employment verification for credit cards, only for mortgages. Credit cards acquisition is based on a combination FICO score and internal acquisition score (which is using credit bureau data and application data).

Even for mortgages, employment verification is often done throug databases like Talx, not by calling employers. Income verification is done by pulling last year's tax returns from the IRS.

Most likely my hypothetical worker does not have a credit card with an overdue payment. You can fact check me by looking up credit card delinquency rates, banks report that to ABA.

From:

timelets

have you checked delinquency rate stats lately?

From:

malobukov

You saw 50%?

From:

timelets

What 50%?

From:

malobukov

50%+ delinquency rate, to justify the "most likely" claim.

I see 2.74% instead.

From:

timelets

Check the date on your reference.

Here's a better source. Marginal delinquencies tend to go up in Q1 and they've been already trending up lately.

https://fred.stlouisfed.org/series/DRCCLOBS

From:

malobukov

It's for "Banks Not Among the 100 Largest in Size", and even that is still 5.85%, so nowhere close to 50%+. Major banks see lower delinquency rates.

This also includes delinquencies up to 180 days past due. Normally no transactions are authorized beyond 60 DPD, so only maybe a third of that is relevant to our discussion. The other two thirds have been rolling through the delinquency buckets towards the default way before government shutdown started.

Also this number includes all credit card customers, employed and unemployed. Unemployment is the most powerful predictor of credit risk, hence delinquency rate among employed government workers should be lower than average.