... the troubled credit card co disclosed that federal regulators will restrict the firm's growth as it tries to recover from lending mistakes. The restrictions, coupled with the dismantling of Providian's $32 billion loan portfolio, virtually ensures the San Francisco-based company will fall from the rans of the nation's biggest credit card issurers. What do you think?
What I think is that there have to be more than $3 billion in subprime receivables. By selling $3 billion in troubled accounts, Providian is really admitting that most of the borrowers whom they charge subprime rates are actually good risks. And now they want to raise the rates on the good accounts even more, since it doesn't do any good to raise the rates on delinquent accounts, which are unlikely to pay anything at all.
