AFSA is excited to launch the Consumer Credit Conditions Index (C3 Index). This initiative fills a need among lenders, policymakers, consumer-facing businesses, the financial media, and the public for a set of focused indicators that track the state of the industry. It provides crucial insights beyond what is available in other industry sentiment surveys or government statistical reports.

The index is based on a first-of-its-kind quarterly survey of AFSA’s membership of mortgage, vehicle financing, personal installment loans, credit cards, and other consumer credit products. Nearly 60 AFSA members representing the full spectrum of consumer credit responded to the initial survey, which was conducted in late March and early April.

Participants provided their views on several key indicators of business conditions. They were asked whether and to what extent conditions faced by their business improved, worsened, or stayed the same in the current quarter compared to the previous quarter, as well as their expectations for the coming six months. Questions covered overall business conditions, customer demand for loans, funding costs, and the performance of outstanding loans.

The initial set of results points to a broad-based deterioration in consumer lending business conditions to start the year. At the same time, though, survey participants anticipate an improvement in conditions over the next several months. More detailed results are available here and here .

For each question asked of survey panelists, results are used to calculate a single summary measure, the Net Improving Index (NII). The NII for current conditions questions is calculated as the percentage of participants reporting conditions “improved considerably” or “improved somewhat” minus the percentage reporting conditions “worsened somewhat” or “worsened considerably.” The NII for future conditions questions is calculated as the percentage of participants reporting they expect conditions to “improve considerably” or “improve somewhat” minus the percentage reporting they expect conditions to “worsen somewhat” or “worsen considerably.

As the survey is conducted each quarter, the NII measures derived from the results will be the key metric to track industry conditions and expectations over time. More detail on the methodology is available here.