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See Note 5 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.
−Removed: 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.
+Added: We cannot give assurance that our policies and procedures for underwriting, processing, and servicing consumer loans or credit cards will adequately adapt to adverse economic or other changes.
If we fail to adapt to changing economic conditions or other factors, or if such changes adversely affect our borrowers’ willingness or capacity to repay their loans, our financial condition, results of operations, and liquidity would be materially adversely affected.
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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 in Part II - Item 8 in this report for further information on goodwill and intangible asset impairment.
+Added: See Note 8 of the Notes to the Consolidated Financial Statements in Part II - Item 8 in this report for further information on goodwill and intangible assets.
Damage to our reputation could adversely impact our business and financial results.
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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 the Company as a mortgage servicer,and as a “larger participant” in the auto financing market.
−Removed: 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.
−Removed: It is not known if or when the CFPB may consider reactivating the rulemaking process for the larger participant rule for consumer installment loans.
−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 over an entity.
+Added: The CFPB currently exercises supervisory authority over the Company’s entire consumer lending business as a result of the Company’s status as a “larger participant” in the auto financing market.
+Added: The CFPB 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.
+Added: In this regard, on May 31, 2023, we entered into a consent order with the CFPB to resolve a previously disclosed investigation focused on certain refunding practices for optional insurance and membership plan products that were subsequently canceled by the consumer after purchase.
+Added: In agreeing to this consent order, we did not admit to any of the CFPB’s factual findings or legal conclusions.
+Added: Any violation of the consent order during its effective period 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.
The CFPB and certain state regulators have acted against some lenders regarding, for instance, debt collection and the marketing of optional products offered by the lenders in connection with their loans.
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Any violations of these laws and regulations may require us to change our business practices or operational structure.
−Removed: 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.
−Removed: 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.
−Removed: 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.
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These risks include, but are not limited, to the following:
−Removed: • our inability to grow our personal loan portfolio with adequate profitability to fund operations, loan losses, and other expenses;
+Added: • our inability to grow our consumer loan and credit card portfolios with adequate profitability to fund operations, loan losses, and other expenses;
• our inability to monetize assets including, but not limited to, our access to debt and securitization markets;
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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 securitization trusts and related series of asset-backed securities.
−Removed: 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.
+Added: We currently act as the servicer with respect to the securitization trusts and related series of asset-backed securities.
+Added: If we default in our servicing obligations, an early amortization event could occur with respect to the relevant asset-backed securities and we could be replaced as servicer.
Servicer defaults include, for example, the failure of the servicer to make any payment, transfer or deposit in accordance with the securitization documents, a breach of representations, warran ties or agreements made by the servicer under the securitization documents and the occurrence of certain insolvency events with respect to the servicer.
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• a classified Board with staggered three-year terms;
−Removed: • certain rights with respect to the designation of directors for nomination and election to the Board, including the ability of Värde to appoint one director, for so long as Värde has beneficial ownership of less than 10% but at least 5% of the voting power of OMH;
+Added: • certain rights with respect to the designation of directors for nomination and election to the Board based on established levels of beneficial ownership of OMH;
• removal of directors only for cause and only with the affirmative vote of at least 80% of the voting interest of stockholders entitled to vote;
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GENERAL RISKS
−Removed: We are a party to various lawsuits and proceedings and may become a party to various lawsuits and proceedings in the future which, if resolved in a manner adverse to us, could have a material adverse effect our financial condition, results of operations, and liquidity.
+Added: We are a party to various lawsuits and proceedings and may become a party to various lawsuits and proceedings in the future which, if resolved in a manner adverse to us, could have a material adverse effect on our financial condition, results of operations, and liquidity.
In the normal course of business, we have been named, and may be named in the future, as a defendant in various legal actions, including governmental investigations, examinations or other proceedings, arising in connection with our business activities.
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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.