Core Viewpoint - Faruqi & Faruqi, LLP is investigating potential claims against SLM Corporation due to allegations of violations of federal securities laws, particularly concerning misleading statements about the company's financial health and delinquency rates [2][4]. Group 1: Legal Investigation and Class Action - The firm is encouraging investors who suffered losses in SLM between July 25, 2025, and August 14, 2025, to discuss their legal options [1]. - A federal securities class action has been filed against SLM, with a deadline of February 17, 2026, for investors to seek the role of lead plaintiff [2][6]. - The lead plaintiff is defined as the investor with the largest financial interest in the relief sought, who will oversee the litigation on behalf of the class [6]. Group 2: Allegations Against SLM - The complaint alleges that SLM and its executives made false and misleading statements regarding the company's financial stability and the effectiveness of its loss mitigation programs [4]. - Specific allegations include a significant increase in early-stage delinquencies, which were not disclosed, leading to an overstated impression of the company's operations and prospects [4]. Group 3: Market Reaction - Following a report from TD Cowen indicating a 49 basis point month-over-month increase in delinquencies for July 2025, SLM's stock price fell by $2.67 per share, or 8.09%, closing at $30.32 on August 15, 2025 [5].

Core Insights - Total Canadian consumer debt increased by 4.1% year-over-year, reaching $2.6 trillion, driven by rising mortgage and non-mortgage balances [1][7] - Mortgage originations rose by 18% year-over-year, with borrowers favoring shorter-term fixed mortgages to navigate high interest rates [2][7] - Average new mortgage loan amounts increased by 4.1% year-over-year to $359,623, indicating ongoing affordability challenges [3][7] Consumer Debt Trends - Mortgage balances grew by 4.1% year-over-year to $1.89 trillion, while non-mortgage debt rose by 4.3% to $673 billion [1] - The number of credit-active consumers increased by 2.7% year-over-year, with total credit balances growing at a faster rate of 4.1% [1] - The average non-mortgage balance per consumer reached $27,100, up 2.6% year-over-year, reflecting a return to pre-pandemic growth rates [1] Mortgage Market Dynamics - Homeowners are prioritizing affordability by opting for shorter mortgage terms, which has led to increased turnover in the market [2] - The average new mortgage loan size varies significantly by city, with Quebec City seeing a 14.01% increase year-over-year [4] - Despite rising loan sizes, mortgage delinquency rates remain low, with serious delinquency rates at 0.26%, up 2 basis points year-over-year [6][10] Delinquency Trends - Early-stage delinquency rates have declined, while late-stage delinquency rates have risen, indicating a widening gap in financial health among consumers [9][10] - Ontario, Alberta, and Quebec have experienced the most significant increases in delinquency rates, with Alberta's rate rising to 2.31% [14][15] - Geographic disparities in delinquency rates reflect varying regional economic conditions, with Alberta facing the highest delinquency rate [11][14] Credit Card Market Insights - New credit card originations decreased by 8.6% year-over-year, although the pace of decline is slowing, suggesting early signs of stabilization [17] - Average new credit card limits increased by 4.8% to over $6,500, indicating a selective lending approach [17] - Average card balances per consumer rose by 1.9% year-over-year to $4,652, with below-prime consumers experiencing a sharper increase [18] Future Outlook - The Consumer Credit Industry Indicator fell by 6 points year-over-year, reflecting ongoing challenges in the Canadian credit market [24] - Lenders are expected to adopt cautious strategies, focusing on targeted acquisition and disciplined credit line management to navigate the evolving credit landscape [23]

Liquidity Issues - Regional/community banks' balance sheets have a significant portion (40%) related to liquidity [1] - Regional banks are facing liquidity issues due to high delinquency rates [1] - The repo market has been tapped for over $100 million in recent months, potentially due to regional banks' liquidity problems [1] Delinquency Rates - High delinquency rates are contributing to the liquidity issues of regional banks [1] - Delinquency rates are expected to worsen [1]

Market Trends - Car repossessions are increasing [1] - Delinquency rates on some auto loans have reached record levels [1] Industry Dynamics - Repo men are busier than ever [1]

Consumer Credit Concerns - Credit scores are falling at the fastest pace since the global financial crisis [2] - 90-day plus delinquency rates for credit cards are north of 12%, the highest in 14 years, with an average rate of about 215% and $12 trillion [2] - CarMax reported increased loan loss reserves due to subprime customers (FICO scores under 550) having the most trouble [9] - A significant portion of thericcolor bankruptcy borrowers had no credit scores or scores around 600, highlighting concerns about lower-quality consumers [10] Market and Bank Performance - Despite consumer credit concerns, the market (HYG) has remained resilient [3] - Banks experienced pressure, possibly due to rebalancing or concerns about access to credit [4] - American Express, expected to perform well due to its higher-end demographic, was surprisingly hard hit [13][14] - Mastercard and Visa held up relatively well [14] - JP Morgan and Capital One earnings will provide insights into different customer segments [12][15] Buy Now Pay Later (BNPL) - BNPL options are prevalent for online purchases, potentially unique to this cycle [5] - Affirm (a firm) experienced a post-IPO pop but quickly broke price, indicating potential investor concerns [5][6] - The lower-end consumer is particularly relevant to the BNPL sector [8][9] Economic Outlook - The push and pull between the Fed's dual mandate (full employment and stable prices) continues [7] - PCE data was "sticky," and the upcoming jobs number may shift focus to the lower-end consumer [7][8] - The economy is perceived as "doing okay," with a good employment picture, though a government shutdown could cause disruption [12]