20 unchanged sentences
An economic downturn or catastrophic event that disproportionately affects certain geographic regions could materially and adversely affect our business, financial condition, and results of operations, including the performance of our finance receivables portfolio.
−Removed: See Note 4 of the Notes to the Consolidated Financial Statements included in this report for quantification of our largest concentrations of net finance receivables.
+Added: See Note 4 of the Notes to the Consolidated Financial Statements in Part II - Item 8 in this report for quantification of our largest concentrations of net finance receivables.
We cannot give assurance that our policies and procedures for underwriting, processing, and servicing personal loans or credit cards will adequately adapt to adverse economic or other changes.
2 unchanged sentences
We maintain an allowance for finance receivable losses, which is a critical accounting estimate and requires us to use significant estimates and assumptions to determine the appropriate level of allowance.
−Removed: To estimate the appropriate level of allowance for finance receivable losses, we consider known and relevant internal and external factors that affect finance receivable collectability, including the total amount of finance receivables outstanding, historical finance receivable charge-offs, our current collection patterns, and current and forecasted economic trends.
+Added: To estimate the appropriate level of allowance for finance receivable losses, we consider known and relevant internal and external factors that affect finance receivable collectability, including the total amount of finance receivables outstanding, historical finance receivable delinquency and charge-offs, our current collection patterns, and current and forecasted economic trends.
Our methodology for establishing our allowance for finance receivable losses is based on the guidance from Accounting Standards Codification (“ASC”) 326, Financial Instruments – Credit Losses , which requires us to measure expected credit losses for financial assets at each reporting date.
−Removed: The allowance is primarily based on historical experience, current conditions, and our reasonable and supportable forecast of economic conditions.
−Removed: If customer behavior changes as a result of economic conditions and if we are unable to accurately
−Removed: predict how the unemployment rates, and general economic conditions may affect our allowance for finance receivable losses, our allowance for finance receivable losses may be inadequate.
+Added: The allowance is primarily based on historical experience, current conditions, and our reasonable and
+Added: supportable forecast of economic conditions.
+Added: If customer behavior changes as a result of economic conditions and if we are unable to accurately predict how the unemployment rates, and general economic conditions may affect our allowance for finance receivable losses, our allowance for finance receivable losses may be inadequate.
Our allowance for finance receivable losses is an estimate, and if actual finance receivable losses are materially greater than our allowance for finance receivable losses, our results of operations could be adversely affected.
9 unchanged sentences
To the extent our models used to assess the creditworthiness of potential borrowers do not adequately identify potential risks, the valuations produced will not adequately represent the risk profile of the borrowers and could result in a riskier finance receivables profile than originally identified.
−Removed: Our risk management policies, procedures, and techniques, including our scoring technology, may not be sufficient to identify all of the risks we are exposed to, mitigate the risks we have identified, or identify concentrations of risk or additional risks to which we may become subject in the future.
−Removed: We also face evolving risks as a result of the significant increase in our remote workforce and digital operations.
+Added: Our risk management policies, procedures, and techniques, including our scoring technology, may not be sufficient to identify all the risks we are exposed to, mitigate the risks we have identified, or identify concentrations of risk or additional risks to which we may become subject in the future.
+Added: We also face risks due to our remote workforce and digital operations.
These risks may not be adequately captured by our existing risk management framework.
8 unchanged sentences
Accordingly, any increase in interest rates could negatively affect our financial condition, results of operations, and liquidity.
+Added: Changes in market conditions may also impact market interest rates which could increase the amount of interest expense that we pay on our borrowings, and in turn increase our cost of funds and adversely affect our business, results of operations, and financial condition.
We may be required to indemnify or repurchase finance receivables from purchasers of finance receivables that we have sold or securitized, or which we will sell or securitize in the future, if our finance receivables fail to meet certain criteria or characteristics or under other circumstances, which could adversely affect our financial condition, results of operations, and liquidity.
The documents governing our finance receivable sales and securitizations contain provisions that require us to indemnify the purchasers of securitized finance receivables, or to repurchase the affected finance receivables, under certain circumstances.
−Removed: While our sale and securitization documents vary, they generally contain customary provisions that may require us to repurchase finance receivables if our representations and warranties concerning the quality and characteristics, including but not limited to regulatory requirements in connection with origination and servicing, of the finance receivable are inaccurate and there is borrower fraud.
−Removed: At its maximum, our exposure to repurchases or our indemnification obligations under our representations and warranties could include the current unpaid balance of all finance receivables that we have sold or securitized, and which are not subject to settlement agreements with purchasers.
+Added: While our sale and securitization documents vary, they generally contain customary provisions that may require us to repurchase finance receivables if there is a breach of representations and warranties concerning the quality and characteristics of the finance receivables and such breach is material and adverse to the purchasers.
+Added: Our maximum exposure to repurchases or our indemnification obligations under our representations and warranties could include the current unpaid balance of all finance receivables that we have sold or securitized, and which are not subject to settlement agreements with purchasers.
The risk of loss on the finance receivables that we have securitized is recognized in our allowance for finance receivable losses since all of our loan securitizations are recorded on our balance sheet.
2 unchanged sentences
Our business relies heavily on information systems to deliver products and services to our customers and to manage our operations.
−Removed: These systems may encounter service disruptions due to system, network or software failure, security breaches, cyber-attacks, ransomware, computer viruses, accidents, power disruptions, telecommunications failures, acts of terrorism or war, physical or electronic break-ins, or other events, disruptions, or intrusions.
−Removed: In addition, denial-of-service attacks could overwhelm our internet sites and prevent us from adequately serving customers.
−Removed: Cyber-attacks, including ransomware, are constantly evolving, increasing the difficulty of detecting and successfully defending against them.
−Removed: We also may face new or heightened risk due to the increase in our remote workforce and digital operations.
−Removed: We may have no current capability to detect certain vulnerabilities, which may allow them to persist in our system environment over long periods of time.
−Removed: Cyber-attacks can have cascading impacts that unfold with increasing speed across our computer systems and networks and those of our third-party vendors.
−Removed: System redundancy and other continuity measures may be ineffective or inadequate, and our business continuity and disaster recovery planning may not be sufficient to adequately address the disruption.
−Removed: A disruption could impair our ability to offer and process our loans, provide customer service, perform collections or other necessary business activities, which could result in a loss of customer business, subject us to additional regulatory scrutiny, or expose us to civil litigation and possible financial liability, or otherwise materially adversely affect our financial condition and results of operations.
+Added: These systems have encountered, and may in the future encounter, service disruptions due to system, network or software vulnerabilities or failures, security breaches, cyber-attacks, social engineering, ransomware, viruses, accidents, power disruptions, telecommunications failures, acts of terrorism or war, physical or electronic break-ins, or other events, disruptions, or intrusions.
+Added: In addition, denial-of-service attacks could overwhelm our internet sites, applications, and services and prevent us from adequately serving customers and maintaining our operations.
+Added: Cyber-attacks, including ransomware, are constantly evolving, increasing the difficulty of detecting, responding to, and successfully defending against them.
+Added: We also may face heightened risk due to our remote workforce, use of third-party services, and digital operations.
+Added: Our security measures vary in maturity across the business, and some of our peers may have more mature cybersecurity programs, which could impact our ability to market and sell our products and services.
+Added: We may fail or be unable to timely detect and patch certain vulnerabilities, including those classified as zero-day vulnerabilities, which may allow unauthorized actors to gain access to and persist in our system environment over long periods of time.
+Added: Our logs and other forensic evidence also may not provide a complete picture of a cyber-attack.
+Added: Cyber-attacks can have cascading impacts that unfold with increasing speed across our systems and networks and those of our third-party vendors.
+Added: System redundancy and other continuity measures may not be effective or adequate, and our business continuity and disaster recovery planning may not be sufficient to adequately address the disruption.
+Added: These kinds of cyber-attacks and the challenges described herein, or a series of smaller attacks in the aggregate, could impair our ability to offer and process our loans, provide customer service, perform collections or other necessary business activities, and maintain our operations, which could result in a loss of customer business, negative impact to our brand and reputation, subject us to regulatory scrutiny, or expose us to civil litigation and possible financial liability, or otherwise have a material adverse effect on our financial condition and results of operations.
There may be losses or unauthorized access to or releases of confidential information, including personally identifiable information (PII), that could subject us to significant reputational, financial, legal, and operational consequences.
−Removed: Our operations rely heavily on the secure processing, storage, and transmission of confidential customer and other information including, among other things, PII, in our computer systems and networks, as well as those of third parties.
−Removed: Our branch locations and centralized servicing centers, as well as our administrative and executive offices, are part of an electronic information network that is designed to permit us to originate and track finance receivables and collections and perform other tasks that are part of our everyday operations.
−Removed: Additionally, as a result of the COVID-19 pandemic and the significant increase in our remote workforce and digital operations, our vulnerability to unauthorized access to confidential information may increase.
−Removed: We devote significant resources to network and data security, including using encryption, access controls, authentication, and other security measures intended to protect our computer systems and data.
−Removed: These security measures may not be sufficient and may be vulnerable to hacking, employee error, malfeasance, system error, faulty password management, or other irregularities.
−Removed: Any failure, interruption, or breach in our cybersecurity could result in reputational harm, disruption of our customer relationships, or our inability to originate, process and service our finance receivable products, any of which could have a materially adverse effect on our financial condition, results of operations, and liquidity.
−Removed: Further, any of these cybersecurity and operational risks could expose us to lawsuits by customers for identity theft or other damages resulting from data breach involving PII or misuse of their PII and possible financial liability, any of which could have a material adverse effect on our financial condition, results of operations, and liquidity.
−Removed: In addition, regulators may impose penalties and/or require remedial action if they identify weaknesses in our security systems, and we may be required to incur significant costs to increase our cybersecurity to address any vulnerabilities that may be discovered or to remediate the harm caused by any security breaches.
−Removed: As part of our business, we may share confidential customer information and proprietary information with customers, vendors, service providers, and business partners.
−Removed: The information systems of these third parties may be vulnerable to security breaches and, despite our best efforts, we may not be able to ensure that these third parties have appropriate security controls in place to protect the information we share with them.
−Removed: If our confidential information is intercepted, stolen, misused, or mishandled while in possession of a third-party, it could result in reputational harm to us, loss of customer business, and additional regulatory scrutiny, and it could expose us to civil litigation and possible financial liability, any of which could have a material adverse effect on our financial condition, results of operations, and liquidity.
−Removed: Although we have insurance that is intended to cover certain losses from such events, there can be no assurance that such insurance will be adequate or available.
+Added: Our operations rely heavily on the secure collection, processing, storage, and transmission of tens of millions of records with confidential customer and other information including, among other things, PII, in our systems and networks, as well as those of third parties.
+Added: Our branch locations and central servicing centers, as well as our administrative and executive offices, are part of an electronic information network that is designed to permit us to originate and track finance receivables and collections and perform other tasks that are part of our everyday operations.
+Added: Additionally, due to our remote workforce and digital operations, including our use of third parties and third-party services, our vulnerability to unauthorized access to confidential information may increase.
+Added: Network and data security measures, such as encryption, access controls, authentication mechanisms, and other security measures intended to protect our systems and data may not be sufficient and data may be vulnerable to hacking, unauthorized
+Added: access, employee error (including phishing and social engineering), malfeasance, system error, faulty password management, or other weaknesses that could be exploited.
+Added: Any failure, interruption, breakdown, noncompliance, or breach in our cybersecurity measures or controls, policies, or procedures could result in reputational harm, disruption of our customer relationships, litigation or regulatory enforcement, or in our inability to originate, process, and service our finance receivable products, any of which could have a material adverse effect on our financial condition, results of operations, and liquidity.
+Added: Further, if any of these cybersecurity and operational risks materialize, they could expose us to lawsuits by customers for identity theft or other damages (for example, in the case of a data breach involving PII or misuse of PII), and possible financial liability, any of which could have a material adverse effect on our financial condition, results of operations, and liquidity.
+Added: In addition, regulators may impose penalties and/or require remedial action if they identify areas of noncompliance or weaknesses in our security systems, controls, processes, procedures, and policies, and we may be required to incur significant costs to enhance our cybersecurity program, including to address any vulnerabilities that may be discovered or to remediate the harm caused by any security breaches.
+Added: In addition, we may share confidential customer information and proprietary information with customers, vendors, service providers, and business partners.
+Added: The information systems of these third parties may be vulnerable to security breaches and, despite our best efforts, we may not be able to ensure that these third parties have appropriate security controls in place to protect information we share with them.
+Added: If our confidential information is intercepted, accessed without authorization, destroyed, stolen, misused, or mishandled while in possession of a third-party, it could result in reputational harm to us, loss of customer business, regulatory scrutiny, civil litigation and possible financial liability, any of which could have a material adverse effect on our financial condition, results of operations, and liquidity.
+Added: Insurance may not be adequate or available to cover losses from such events.
We are also subject to the theft or misuse of physical customer and employee records at our facilities.
−Removed: Our branch locations and centralized servicing centers have physical customer records necessary for day-to-day operations that contain confidential information about our customers.
+Added: Our branch locations and central servicing centers have physical customer records necessary for day-to-day operations that contain confidential information about our customers.
We also retain physical records in various storage locations.
3 unchanged sentences
Insurance claims and policyholder liabilities are difficult to predict and may exceed the related reserves set aside for claims (losses) and associated expenses for claims adjudication (loss adjustment expenses).
−Removed: Additionally, events such as natural disasters, pandemic disease, cyber security breaches and other types of catastrophes, and prolonged economic downturns, could adversely affect our financial condition and results of operations.
+Added: Additionally, events such as natural disasters, pandemic disease, cybersecurity breaches and other types of catastrophes, and prolonged economic downturns, could adversely affect our financial condition and results of operations.
Other risks relating to our insurance operations include changes to laws and regulations applicable to us, as well as changes to the regulatory environment, such as:
23 unchanged sentences
There can be no assurance that our future evaluations of goodwill and other intangible assets will not result in findings of impairments and related write-downs, which may have a material adverse effect on our financial condition and results of operations.
−Removed: See Note 7 of the Notes to the Consolidated Financial Statements included in this report for further information on goodwill and intangible asset impairment.
+Added: See Note 7 of the Notes to the Consolidated Financial Statements in Part II - Item 8 in this report for further information on goodwill and intangible asset impairment.
Damage to our reputation could adversely impact our business and financial results.
19 unchanged sentences
Even if integration is successful, anticipated benefits and synergies may not be achieved.
−Removed: The COVID-19 pandemic may continue to adversely affect consumer finance businesses including OneMain.
−Removed: The virus causing COVID-19 was identified in late 2019 and was declared a global pandemic in March 2020.
−Removed: Governmental authorities took a number of steps to combat or slow the spread of COVID-19.
−Removed: Efforts to combat the virus continue to be complicated by viral variants and uneven global access to and acceptance of vaccines.
−Removed: These measures have and may continue to impact all or portions of the Company’s workforce and our current and prospective customers.
−Removed: While many of the restrictions related to the COVID-19 pandemic have largely been eased, uncertainty continues to exist regarding such measures and potential future measures.
−Removed: In response to COVID-19, we modified our business practices with a portion of our employees working remotely to minimize interruptions in our business.
−Removed: Although these changes have allowed us to continue operations safely, the technology in home environments may not be as robust as in our offices and could cause networks, information systems, applications, and other tools available to employees to be more limited or less reliable than in our offices.
−Removed: The continuation of these work-from-home measures also introduces additional operational risk, including increased cybersecurity risk from phishing, malware, and other cybersecurity attacks, all of which could expose us to risks of data or financial loss and could seriously disrupt our operations and the operations of any impacted customers.
−Removed: Legal and regulatory responses to concerns related to the COVID-19 pandemic could result in additional regulation or restrictions affecting the conduct of our business in the future.
−Removed: All of the foregoing may adversely affect our income and other results of operations, make collection of our finance receivables more difficult, or reduce income received from such receivables or our ability to obtain financing with respect to such receivables.
−Removed: The COVID-19 pandemic has caused significant volatility and disruption in global financial markets.
−Removed: Volatility stemming from the COVID-19 pandemic could negatively affect our net interest income, lending activities, and profitability.
−Removed: Likewise, market volatility, as well as general economic, market, or social conditions related to the COVID-19 pandemic, could reduce the market price of shares of our common stock regardless of our operating performance.
−Removed: Additionally, to the extent that the pandemic harms our business and results of operations, many of the other risks described in this “Risk Factors” section may be heightened.
RISKS RELATED TO OUR INDUSTRY AND REGULATION
8 unchanged sentences
We also must comply with extensive regulations in servicing our legacy real estate loans and loan portfolios for other parties and will have to comply with these servicing regulations if we acquire loan portfolios in the future for which we act as a servicer.
−Removed: Our operations are subject to regular examination by state regulators and, for certain aspects of our business, by U.S.
+Added: Our operations are subject to regular examination by state regulators and U.S.
federal and foreign regulators.
20 unchanged sentences
The industry investigation and enforcement provisions of Title X of the Dodd-Frank Act may adversely affect our business if the CFPB or one or more state attorneys general or state regulators believe that we have violated any federal consumer financial protection laws, including the prohibition in Title X against unfair, deceptive or abusive acts or practices.
−Removed: The CFPB currently has supervisory authority over our real estate servicing activities, and may in the future have supervisory authority over other parts of our consumer lending business.
−Removed: It also has the authority to bring enforcement actions for violations of laws over which it has jurisdiction regardless of whether it has supervisory authority for a given product or service.
−Removed: The Dodd-Frank Act also gives the CFPB supervisory authority over entities that are designated as “larger participants” in certain financial services markets.
−Removed: The CFPB has published regulations for “larger participants” in the market of auto finance, and we have been designated as a larger participant in this market.
+Added: The CFPB currently has supervisory authority over the Company as a mortgage servicer,and as a “larger participant” in the auto financing market.
The larger-participant rule for consumer installment loans was one of the rulemaking initiatives the CFPB designated as inactive in its Spring 2018 rulemaking agenda.
It is not known if or when the CFPB may consider reactivating the rulemaking process for the larger participant rule for consumer installment loans.
+Added: It also has the authority to bring enforcement actions for violations of laws over which it has jurisdiction regardless of whether it has supervisory authority over an entity.
The CFPB’s broad supervisory and enforcement powers could affect our business and operations significantly in terms of increased operating and regulatory compliance costs, and limits on the types of products we offer and the way they are offered, among other things.
8 unchanged sentences
For more information with respect to the regulatory framework affecting our businesses and the CFPB, see “Business—Regulation” included in this report.
−Removed: Current and proposed regulations relating to consumer privacy, data protection, and information security could increase our costs.
−Removed: We are subject to federal and state consumer privacy, data protection, and information security laws and regulations.
−Removed: For example, we are subject to the federal Gramm-Leach-Bliley Act and the New York Cybersecurity Regulation, which govern the use of PII by financial institutions and require certain safeguards for protecting PII.
+Added: Current and proposed regulations relating to consumer privacy, data protection, and cybersecurity could increase our costs.
+Added: We are subject to federal and state consumer privacy, data protection, and cybersecurity laws and regulations.
+Added: For example, we are subject to the federal GLBA and the NYDFS Cybersecurity Regulation, which govern the collection, processing, sharing, storage, use, and protection of PII and other confidential information by financial institutions and require certain safeguards, controls, policies, and processes for protecting PII and other confidential information.
Moreover, various state laws and regulations may require us to notify customers, employees, state attorneys general, regulators, and others in the event of a security breach.
−Removed: Federal and state legislators and regulators are pursuing new guidance, laws, and regulations relating to consumer privacy, data protection, and information security.
−Removed: Compliance with current or future consumer privacy, data protection, and information security laws and regulations could result in higher compliance, technology, or other operating costs.
+Added: Federal and state legislators and regulators are pursuing new guidance, laws, and regulations relating to consumer privacy, data protection, and cybersecurity.
+Added: Compliance with current or future consumer privacy, data protection, and cybersecurity laws and regulations could result in higher compliance, technology, or other operating costs.
Any violations of these laws and regulations may require us to change our business practices or operational structure.
−Removed: Violations could subject us to material legal claims, monetary penalties, sanctions, and obligations to compensate and/or notify customers, employees, state attorneys general, regulators, and others, or take other remedial actions.
+Added: In this regard, on May 24, 2023, we entered into a consent order with the NYDFS relating primarily to a past examination of our cybersecurity policies from 2017 to early 2020.
+Added: Pursuant to the consent order, we agreed to pay a $4.25 million civil penalty and represent that certain improvements to our cybersecurity controls and procedures had previously been completed.
+Added: Any future violations of these laws and regulations could adversely impact our reputation and subject us to material legal claims, monetary penalties, sanctions, and obligations to compensate and/or notify customers, employees, state attorneys general, regulators, and others, or take other remedial actions.
Our use of third-party vendors is subject to regulatory review.
92 unchanged sentences
In addition, the value of any subordinated securities that we may retain in our securitizations might be reduced or, in some cases, eliminated because of adverse changes in economic conditions or the financial markets.
−Removed: OMFC and OMFG currently act as the servicers with respect to the personal loan securitization trusts and related series of asset-backed securities.
+Added: OMFC and OMFG currently act as the servicers with respect to the securitization trusts and related series of asset-backed securities.
If OMFC or OMFG defaults in its servicing obligations, an early amortization event could occur with respect to the relevant asset-backed securities and OMFC or OMFG, as applicable, could be replaced as servicer.
2 unchanged sentences
Rating agencies may also affect our ability to execute a securitization transaction or increase the costs we expect to incur from executing securitization transactions.
−Removed: Rating agencies could alter their ratings processes or criteria after we have accumulated
−Removed: finance receivables for securitization in a manner that effectively reduces the value of those finance receivables by increasing our financing costs or otherwise requiring that we incur additional costs to comply with those processes and criteria.
+Added: Rating agencies could alter their ratings processes or criteria after we have accumulated finance receivables for securitization in a manner that effectively reduces the value of those finance receivables by increasing our financing costs or otherwise requiring that we incur additional costs to comply with those processes and criteria.
We cannot control or predict what actions the rating agencies may take in this regard.
61 unchanged sentences
A large judgment that is adverse to us could cause our reputation to suffer, encourage additional lawsuits against us and have a material adverse effect on our financial condition, results of operations, and liquidity.
−Removed: For additional information regarding pending legal proceedings and other contingencies, see Note 14 of the Notes to the Consolidated Financial Statements included in this report.
+Added: For additional information regarding pending legal proceedings and other contingencies, see Note 14 of the Notes to the Consolidated Financial Statements in Part II - Item 8 in this report.
Certain operations rely on external vendors.
14 unchanged sentences
Misconduct by our employees, or even unsubstantiated allegations of misconduct, could result in a material adverse effect on our reputation and our business.
−Removed: Unresolved Staff Comments.
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.