What changed in this filing

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Item 1. Business

2023-02-10 compared with 2022-02-11 · 71 added, 49 removed, 225 unchanged (35% of the section changed)

17 unchanged sentences

At December 31, 2022, we had $20.0 billion of finance receivables due from approximately 2.47 million customer accounts.

We also service personal loans for our whole loan sale partners, which we commenced during the first quarter of 2021.

We also service personal loans for our whole loan sale partners.

At December 31, 2022, we managed a combined total of 2.56 million customer accounts and $20.8 billion of managed receivables.

Our branch network of approximately 1,400 locations in 44 states is staffed with expert personnel and is complemented by our online personal loan origination capabilities and centralized operations staff, which allow us to reach customers in person, digitally, and over the phone.

Our branch network of approximately 1,400 locations in 44 states is staffed with expert personnel and is complemented by our online lending and servicing capabilities and centralized operations staff, which allow us to serve customers in person, digitally, and over the phone.

Our digital platform provides our current and prospective customers with the option of applying for our products via our website, www.omf.com .

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Personal loan origination and servicing, credit cards, and insurance products form the core of our operations.

Our branch network included approximately 1,400 locations in 44 states as of December 31, 2021.

In addition, our centralized support operations provide underwriting and servicing support to branch operations.

Our insurance business is conducted through our wholly owned insurance subsidiaries, American Health and Life Insurance Company (“AHL”) and Triton Insurance Company (“Triton”).

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Our personal loan business comprises products and services that have performed well through various market conditions.

Our personal loans are non-revolving, with a fixed-rate, fixed terms generally between three to six years, and are secured by automobiles, other titled collateral, or are unsecured.

Our secured personal loans include direct auto loans, which are typically larger in size and based on the collateral of newer autos with higher values.

Our personal loans are non-revolving, with a fixed rate, have fixed terms generally between three to six years, and are secured by automobiles, other titled collateral, or are unsecured.

Our loans have no pre-payment penalties.

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We have no direct risk of loss on these membership plans, and these plans are not considered insurance products.

We recognize income from this product in other revenues — other.

We recognize income from this product in Other revenues — other in our consolidated statements of operations.

The unaffiliated company providing these membership plans is responsible for any required reimbursement to the customer.

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We staff each of our branch locations with local well-trained personnel, including professionals who have significant experience in the industry.

Our business benefits from an origination, underwriting, and servicing process that leverages our local community presence.

Our customers often develop a relationship with their local office representatives, which we believe not only improves the credit performance of our personal loans but also leads to additional lending opportunities.

We solicit customers through a variety of direct mail offers, targeted online advertising, search engines, e-mail, and internet loan aggregators.

Our business benefits from an origination and servicing process that leverages our local community presence.

Our customers often develop a relationship with their local office representatives, which we believe not only improves the credit performance of our personal loans but also improves customer loyalty and the longer term relationship.

We solicit customers through a variety of channels, including but not limited to direct mail offers, targeted online advertising, search engines, e-mail, and internet loan aggregators.

We use proprietary modeling, along with data purchased from credit bureaus, alternative data providers, and our existing data/experience to acquire and develop new and profitable customer relationships.

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These tools simplify and optimize the customer experience.

During 2021, we continued to increase the number of borrowers who closed remotely through our digital platform without coming into a branch location.

All of our applications, regardless of whether they are completed in person, over the phone, or online, go through our best-in-class underwriting processes, including an ability-to-pay assessment, monthly budgeting, income verification, and centralized automated credit decisioning.

During 2022, we continued to offer borrowers an option to close remotely through our digital platform without coming into a branch location.

Our applications, regardless of whether they are completed in person, over the phone, or online, go through our best-in-class underwriting processes, including an ability-to-pay assessment, monthly budgeting, income verification, and centralized automated credit decisioning.

Our goal is to continue to improve the way we serve our customers and extend responsible credit, so customers are able to repay their loans.

Credit quality is driven by our long-standing underwriting philosophy, which considers a prospective customer’s budget, to determine not only his or her willingness to pay but also the capacity to repay the personal loan.

We use credit risk scoring models at the time of the credit application to assess the applicant’s expected willingness and capacity to repay.

Credit quality is driven by our long-standing underwriting philosophy, which considers a prospective customer’s willingness to pay and the capacity to repay the personal loan.

We use credit risk scoring models at the time of the credit application to assess the applicant’s likelihood of repaying the loan.

We develop these models using numerous factors, including past customer credit repayment experience and application data, and periodically revalidate these models based on recent portfolio performance.

Our underwriting process for our personal loans includes the development of a budget (net of taxes and monthly expenses) for the applicant.

Our underwriting process for our personal loans also includes an assessment of the applicant’s income and expenses to ensure he or she has the capacity to repay the loan.

We obtain a security interest in titled property for our secured personal loans.

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As a result, we generally charge these customers higher interest rates.

We may extend the opportunity of a deferment to customers when they are experiencing a temporary financial hardship.

The account is brought current after granting the deferment.

To assess whether a borrower’s financial difficulties are temporary, we review the terms of each deferment to evaluate the borrower’s financial ability to repay the loan.

Following this analysis, if we believe a borrower’s financial difficulties are not temporary, we will not grant deferment, and the loans may continue to age until they are charged off.

For borrowers that do not meet the qualifications of a deferment, we may also offer a re-age or a modification of loan terms.

A re-age is intended to assist delinquent customers who have experienced financial difficulties but have demonstrated both an ability and a willingness to repay their loan.

After the re-age, the customer’s account status is brought current.

Account Servicing.

Account servicing and collections for our finance receivables are handled at the branch location, in our centralized service centers, or through third-party servicers.

Account servicing and collections for our finance receivables are handled at the branch location, in our centralized service centers, through our digital platform, or third-party servicers.

Servicing and collection activity is conducted and documented on systems that log and maintain a permanent record of all transactions and may also be used to assess a customer’s application.

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Our centralized operational functions support the following:

• soliciting business through mail and telephone;

• soliciting business;

• processing payments;

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and Fort Worth, Texas.

We believe these facilities position us for additional portfolio purchases or fee-based servicing, as well as additional flexibility in the servicing of our lending products.

We believe these facilities position us for additional portfolio purchases and/or fee-based servicing, as well as additional flexibility in the servicing of our lending products.

OPERATIONAL CONTROLS

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• our operational policies and procedures that standardize various aspects of lending and collections;

• our branch finance receivable systems control amounts, rates, terms, and fees of our customers’ accounts;

• our branch finance receivable systems control loan size, interest rates, maturity dates, and fees of our customers’ accounts;

create loan documents specific to the state in which the branch location operates or to the customer’s location if the loan is made electronically through our centralized operations;

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• our executive information system is available to headquarters and field operations management to review the status of activity through the close of business of the prior day;

• our branch operations management structure, Regional Quality Coordinators, and Compliance Field Examination team are designed to oversee a large, decentralized organization with succeeding levels of supervision staffed with experienced personnel;

• our branch operations management structure, Regional Quality Coordinators, and Compliance Field Examination teams are designed to oversee a large, decentralized organization with succeeding levels of supervision and are staffed with experienced personnel;

• our branch and central operations compensation plans are based on credit quality and compliance, and are regularly reviewed for consistency with overall corporate goals and customer service;

• our compliance department assesses our compliance with federal and state laws and regulations and our internal policies and procedures, oversees training to ensure team members have a sufficient level of understanding of such laws, regulations, policies, and procedures that impact their job responsibilities;

• our compliance department assesses our compliance with federal and state laws and regulations and our internal policies and procedures;

oversees training to ensure team members have a sufficient level of understanding of such laws, regulations, policies, and procedures that impact their job responsibilities;

and manages our state regulatory examination process;

• our Executive Office of Customer Care maintains our consumer complaint resolution and reporting process;

• our internal audit department audits our business for adherence to operational policy and procedure and compliance with federal and state laws and regulations.

• our internal audit department audits our business for adherence to operational policies and procedures, and compliance with federal and state laws and regulations.

PRIVACY, DATA PROTECTION, AND CYBERSECURITY

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Our consumer businesses are subject to the privacy, disclosure, and safeguarding provisions of the Gramm-Leach-Bliley Act ("GLBA") and Regulation P, which implements the statute.

Among other things, the GLBA imposes certain limitations on our ability to share consumers’ nonpublic personal information with nonaffiliated third parties and, pursuant to the Federal Trade Commission’s Safeguards Rule, requires us to develop, implement, and maintain a written comprehensive cybersecurity program containing safeguards that are appropriate to the size and complexity of our business, the nature and scope of our activities, and the sensitivity of customer information that we process.

Among other things, the GLBA imposes certain limitations on our ability to share customers’ nonpublic personal information with nonaffiliated third parties and, pursuant to the Federal Trade Commission’s Safeguards Rule, requires us to develop, implement, and maintain a written comprehensive cybersecurity program containing safeguards that are appropriate to the size and complexity of our business, the nature and scope of our activities, and the sensitivity of customer information that we process.

In December 2021, the Federal Trade Commission published amendments to its Safeguards Rule that prescribe more specific administrative and technical requirements for a financial institution’s information security program.

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Certain of these requirements may apply to the personal information of our employees and contractors as well as to our customers.

federal regulators and U.S.

states and territories have also enacted data security breach notification requirements that are applicable to us.

federal, state, and territory regulators have also enacted data security breach notification requirements that are applicable to us.

OneMain has an enterprise risk framework which includes cybersecurity as a key potential risk area.

The information security program has policies and procedures to identify cybersecurity threats with corresponding practices undertaken to prevent, detect, and minimize effects of cybersecurity incidents.

The Chief Information Security Officer reports to the OMH Board of Directors (the “Board”) on the information security program at least annually and reports any material cyber incident when appropriate.

Various federal laws and regulations govern loan origination, servicing, and collections, including:

• the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") (which, among other things, created the CFPB);

• the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") (which, among other things, created the Consumer Finance Protection Bureau (“CFPB”));

• the Equal Credit Opportunity Act (which, among other things, prohibits discrimination against creditworthy applicants) and Regulation B, which implements this statute;

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With respect to each financing transaction that is subject to the risk retention requirements of the Dodd-Frank Act, we either retain at least 5% of the balance of each such class of debt obligations and at least 5% of the residual interest in each related VIE or retain at least 5% of the fair value of all ABS interests (as defined in the risk retention requirements), which is satisfied by retention of the residual interest in each related VIE, which, in each case, collectively, represents at least 5% of the economic interest in the credit risk of the securitized assets in satisfaction of the risk retention requirements.

Various state laws and regulations also govern personal loans and real estate secured loans.

Various state laws and regulations also govern loan originations, servicing, and collections.

Many states have laws and regulations that are similar to the federal laws referred to above, but the degree and nature of such laws and regulations vary from state to state.

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We focus on serving the nonprime customer through our national branch network, online, and over the phone.

We have a number of local, regional, national, and digital competitors in the consumer installment lending industry that seek to serve the same consumers that we serve.

These competitors are various types of financial institutions that operate within our geographic network and over the internet, including community banks and credit unions, that offer similar products and services.

We have a number of local, regional, national, and digital competitors in the consumer installment lending industry that seek to

serve the same consumers that we serve.

These competitors are various types of financial institutions that operate within our geographic network and over the internet that offer similar products and services.

We believe that competition between consumer installment lenders occurs primarily on the basis of customer experience, price, speed of service, flexibility of loan terms offered, and operational capability.

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We believe that we possess several competitive strengths that allow us to compete effectively with other lenders in our industry.

We utilize an omnichannel operating model, including a digital lending footprint and a branch network of approximately 1,400 locations rooted in local communities.

Almost 90% of Americans live within 25 miles of one of our branch locations.

We utilize an omnichannel operating model, including a digital lending footprint and a branch network rooted in local communities.

Our national branch network serves as a proven distribution channel.

We also have proven analytics that allow us to have strong loss performance through many cycles.

We also have proven analytics that allow us to have strong loss performance through economic cycles.

We believe our deep understanding of local markets and customers, together with our proprietary underwriting process, sophisticated data analytics, and decisioning tools allow us to price, manage, and monitor risk effectively through changing economic conditions.

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HUMAN CAPITAL

OneMain is dedicated to providing lending solutions to help hardworking Americans improve their financial well-being by offering products that are designed to be the starting point to their financial stability and growth.

As of December 31, 2022, we had over 9,200 employees.

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We require diverse candidates (women or minorities) to be considered for all leadership roles.

This commitment to diversity begins with our OMH Board of Directors, whose membership includes 38% ethnic or racial minorities and 25% women.

This commitment to diversity begins with the Board, whose membership includes 50% ethnic or racial minorities and 25% women.

OneMain’s 2021 U.S.

Equal Employment Opportunity (“EEO-1”) Report is available on our Investor Relations website, further demonstrating our commitment to accountability and transparency.

All managers are accountable for attracting and retaining high-quality, diverse talent, and creating a respectful, inclusive work environment as part of their goals and our leadership attributes.

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We believe that motivated and engaged team members are more productive, innovative, and collaborative, which in turn helps consistently deliver an excellent customer experience.

OneMain equips each team member at all levels of our organization with the tools and personal and professional support to further their careers.

OneMain equips each team member at all levels of our organization with the tools and support, both personal and professional, to further their careers.

We empower our employees to learn new skills, meet personalized development goals, and grow their careers.

Team members are guided through their performance management with regular goal setting and coaching.

OneMain conducts regular employee trainings, including Continuing Professional Education and leadership development at each level.

We invest in our employees and believe training and professional development is critical to maintaining our talent competitiveness and providing best-in-class service for our customers.

OneMain maintains a Women’s Leadership Development program, a Diverse Talent Leadership program, a training program on mitigating unconscious bias for all team members, allyship training for managers, a Day of Inclusion virtual series, and partners with PFLAG, an organization dedicated to supporting, educating, and advocating for LGBTQ+ people and their families, to offer Straight for Equality development sessions.

We continue to invest in our employees and believe training and professional development is critical to maintaining our talent competitiveness and providing best-in-class service for our customers.

Compensation and Benefits

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Our compensation and benefits package includes competitive pay, healthcare, retirement benefits, as well as paid time off and holidays, parental leave, disability benefits, military leave, and paid development and volunteer time off, along with other benefits and employee resources.

Team members are guided through their performance management with regular goal setting and coaching.

We also offer performance pay to help enhance their career development.

OneMain recognizes our responsibility to help protect and promote human rights, and we strive to meet our responsibility to respect human rights with our team members, customers, and the communities we serve.

A copy of our Human Rights Statement is available on our Investor Relations website.

CORPORATE SOCIAL RESPONSIBILITY

Our approach to corporate social responsibility (“CSR”) is a natural extension of our mission to continue to support and improve the financial well-being of our customers, communities, and team members.

In early 2020 when COVID-19 resulted in widespread health and financial hurdles across the United States, OneMain committed to continue to help and support our communities more than ever.

OneMain implemented operational adjustments in response to the COVID-19 pandemic to help protect the health and financial well-being of our customers and team members.

We focused on our customers by offering to support them through our borrower assistance programs.

We are mindful of challenges faced by our customers and continue to prioritize offering them support through our borrower assistance programs.

We also contributed to support financial literacy, community and economic development, pandemic relief, and racial and social justice initiatives.

In 2022, we built on the important enhancements we have made to our environmental, social and governance (“ESG”) strategy.

Our ESG strategy is guided by three priorities:

building trust and strong relationships with our stakeholders, providing responsible lending solutions, and contributing to our communities through education, financial wellness, and volunteerism.

In 2021, with the support of our Chief Executive Officer (“CEO”), leadership, and investors, we created our ESG Executive Council.

This diverse group of five senior executives, appointed by the CEO, reports directly to the Nominating and Corporate Governance Committee of the Board on ESG issues.

These senior executives each hold responsibility for different ESG workstreams.

The increased oversight by these leaders reflects the Company’s commitment to monitoring ESG matters and risks for potential impact on the Company and the consumer lending industry, as well as potential opportunities that we may gain through proactive identification of ESG issues.

In June 2021, OMFC issued its inaugural Social Bond, with the net proceeds committed to serving credit-disadvantaged communities around the country.

Furthermore, at least 75% of the loans funded by the Social Bond will be allocated to women or minority borrowers as outlined in OneMain’s Social Bond Framework.

The Social Bond reinforces our commitment to financial inclusion and providing underrepresented communities with access to safe, affordable credit.

It also provides a concrete and measurable funding vehicle to advance the Company’s social responsibility program.

Additional information regarding our Social Bond and Social Bond Framework is available on our Investor Relations website.

In December 2021, OneMain entered a $4 million service contract with EVERFI, a global social-impact technology provider, to develop and distribute free, digital financial education to 1,500 high schools nationwide over four academic school years.

The curriculum is designed to drive meaningful social impact in communities and on financial wellness by teaching high school students about credit as they embark on their personal financial lives.

OneMain and EVERFI will award up to $300,000 in scholarships over four years as part of the contract.

Furthermore, at least 75% of the loans funded by the Social Bond are allocated to women or minority borrowers as outlined in OneMain’s Social Bond Framework.

In April 2022, OMFC completed its first social securitization in which we issued $600 million principal amount of notes backed by personal loans made to individuals with mailing addresses containing zip codes in rural communities, with 75% of such loans made to borrowers with annual net income of $50,000 or less.

Our social debt issuances reinforce our commitment to financial inclusion and providing underrepresented communities with access to safe, affordable credit.

They also provide concrete and measurable funding vehicles to advance the Company’s social responsibility program.

Additional information regarding our Social Bonds and Social Bond Framework is available on our Investor Relations website.

We continue to advance our mission to improve the financial well-being of hardworking Americans, particularly those in underserved communities.

In 2022, we made a $50 million commitment to support minority depository institutions and a military veteran owned and operated investment bank supporting job placement and transition services for veterans.

As part of our commitment to financial wellness, Credit Worthy by OneMain Financial is a $4 million commitment with strategic partner EVERFI, a global social-impact technology provider, to develop and distribute free, digital financial education to high schools nationwide over four academic school years.

In 2022, we delivered the curriculum to more than 2,000 schools and 130,000 students.

The curriculum is designed to drive meaningful social impact in communities by teaching high school students about building credit and managing debt.

Through interactive virtual and in-person classroom sessions, Credit Worthy helps students start early on the path to financial wellness.

More than half of the schools using the digital curriculum during the academic year were low-to-moderate income.

As part of Credit Worthy by OneMain Financial, we will award up to $300,000 in scholarships over four years.

As part of our commitment to social responsibility, we are focused on sustainable growth and our carbon footprint.

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These reports are also available free of charge through our website, www.omf.com under “Investor Relations,” as soon as reasonably practicable after we file them with, or furnish them to, the SEC.

In addition, OMH's Code of Business Conduct and Ethics (the “Code of Ethics”), Code of Ethics for Principal Executive and Senior Financial Officers (the “Financial Officers’ Code of Ethics”), Corporate Governance Guidelines and the charters of the committees of the OMH Board of Directors are posted on our website at www.omf.com under “Investor Relations” and printed copies are available upon request .

In addition, OMH's Code of Business Conduct and Ethics (the “Code of Ethics”), Code of Ethics for Principal Executive and Senior Financial Officers (the “Financial Officers’ Code of Ethics”), Corporate Governance Guidelines and the charters of the committees of the Board are posted on our website at www.omf.com under “Investor Relations” and printed copies are available upon request .

We intend to disclose any material amendments to or waivers of OMH Code of Ethics and Financial Officers’ Code of Ethics requiring disclosure under applicable SEC or NYSE rules on our website within four business days of the date of any such amendment or waiver in lieu of filing a Form 8-K pursuant to Item 5.05 thereof.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business