I follow credit card companies because its the most comparable to the type of loans being serviced by LendingClub and Prosper as well as the fact that 75-80% of the loans are credit card refinancing or debt consolidation.
The biggest takeaway from the earnings linked above is the following:
Provision expense increased $239 million in the quarter as continued improvement in the outlook for credit performance was more than offset by growth in loan balances and seasonal effects. The charge-off rate increased 17 basis points to 2.69 percent, while the coverage ratio of allowance to loans fell by 16 basis points to 3.13 percent.”
What this means is that demand for credit card debt grew and credit scores got better but the number of defaults increased. I will probably look over the earnings for American Express but most likely, I would reduce my exposure to new F G HR rated loans as LendStats also has a confirmation of lower ROI for lower rated loans for 2010.