Perry Beberman: Yeah. No. The — thanks for the question. The RSA that’s already contractually there is already contemplated in there in that estimate, but because the rule is not final, there hasn’t been final negotiations with those partners. So I would be disingenuous for me to give you an estimate with assumptions of what each of those partners might be willing to do with a hypothetical situation. So that’s why we framed the estimate as we did.
Jeff Adelson: Okay. Got it. And then just the revenue guide, just to make sure it’s crystal clear, I know you are saying no assumed gain on sale. But does the revenue base for 2023 considered in the growth rate include or exclude BJs. I think you mean to include BJs in the base, correct?
Perry Beberman: Yes. In the base forecast that included BJs in the 2023 numbers with the base guidance and then in my comments I had mentioned that it would have reduced — it would have lessened that reduction, if it was excluded from the prior year.
Jeff Adelson: Okay. Great. Got it. Thanks for taking my question.
Perry Beberman: Thank you.
Operator: The next question comes from Reggie Smith with JPMorgan. Please go ahead, Reggie.
Reggie Smith: Good morning. Thanks for taking the question. You — like this year you guys talked about, I guess, efficiency and one of the things and it’s maybe a bad metric, but I looked at your employee headcount. When I compare it to, I guess, Synchrony and Affirm relative to credit sales or receivables, it attracted a lot higher. My question to you is, is there anything fundamental about your business that requires more headcount, maybe it’s the credit [ph] that you experience or whether and if you kind of reimagine this business from scratch using modern technology and automation, would you need fewer people, I know that’s a delicate subject with employees both, but anything you can share around that idea will be helpful? Thanks.
Perry Beberman: Yeah. Thanks for the question. I think when you think about the drivers of what you require people for, right? Think about the risk organization, technology, there is some fundamental things you have to have in place to serve our business and obviously scale helps when you are talking about businesses that are 5x to 10x our size, they get that leverage of scale. The second thing is you also have to look at the number of accounts that we serve. I mean we serve one in seven households in America. So the — we have a lot more accounts for the size of assets we have compared to some larger issuers. The other thing I’d say is what you are not picking up in those numbers is, the amount of offshore meeting with third parties vendors where they maybe they use third-party servicing versus your own servicing.
So there’s a lot of things that go into those numbers to try to come up with a reasonable, I will say, comparatives. But your point is a good one that and that’s what we talk about operational excellence over time, and I think you have seen this over decades, technology is our friend and the more proficient we can make the customer reps who serve our customers give them better tools to do so or give the customers the ability to self-serve through mobile or chat, things that they have become accustomed to using and they no longer need to speak to somebody. All of those things over time help those ratios and these are things that we have talked about and Ralph talked about it, the investments that we have been making in mobile and you will continue to see those advancements for us over the next couple of years, which also helped to improve our efficiency.
Reggie Smith: If I could sneak one more in just a point of clarification. I would imagine there’s some seasonality to kind of the late fees and I was curious if it’s 4Q is typically a heavier late fee quarter than maybe others. I am just trying to this think about like what that 2025, like how much of that is kind of seasonal and like where it kind of move? Thanks.
Perry Beberman: Yeah. It — that — so, you are referring to the 25% impact from the CFPB rule?
Reggie Smith: Correct.
Perry Beberman: Yeah. No it’s apples-to-apples…
Reggie Smith: Yeah. Yeah. Yeah.
Perry Beberman: Yeah. That’s why we picked the apples-to-apples comparison of the same…
Reggie Smith: No. No. So — yes, I guess, what I am asking is that, in general, do you tend to have higher late fees in the fourth quarter relative to the other three quarters on the seasonal perspective…
Perry Beberman: There’s no –no. There’s no material movement. I mean it’s more about tracking delinquency, right? So, it’s really, when you think about movement in late fee, delinquent accounts pay late fees and so we look at…
Reggie Smith: Right.
Perry Beberman: … delinquency movements, you are going to see movement in that end. Right now, you have been seeing some fluctuation, sometimes you have some more sloppy payers. I mean it’s an interesting dynamic. You have people who missed by a few days and that’s you call, I will say, a sloppy pay versus those that are actually going 30-day, 60-day delinquent. So its variation. Right now it’s more macro-driven then, I’d say, month-to-month seasonality.
Reggie Smith: Got it. Okay. Thank you.
Operator: Your next question comes from Bill Carcache with Wolfe Research. Please go ahead, Bill.
Bill Carcache: Thank you. Thanks, Ralph and Perry for all the proactive disclosures. I guess, maybe first question I had was whether providing so much detail suggests in any way that you view eventual implementation is likely, it just seems like there’s still this scenario where the rule gets immediately litigated and industry gets a win in the 5th Circuit which would likely push the legal process beyond the 2024 election and given Trump’s appointing is an opportunity to overturn the rule, if we assume a Trump win and a Biden versus Trump 2024 rematch. I was just hoping you could speak to that dynamic and your view of what this says about likelihood of implementation?
Ralph Andretta: Yeah. So, it’s hard for us to predict political climate, though, I like to your outcome to be. But for us, it — we view this as a high potential and because it’s a high potential, we wanted to understand what the impact is to our business and how we get on top of it to mitigate. So if it doesn’t happen and it gets pushed off, that’s terrific. But we — hope is not a strategy. So for us it’s out there, it’s highly likely and we are going to mitigate it with this seasoned team.
Perry Beberman: Yeah. And this is Perry. I will add. Bill, thanks for the question. And I also like your thesis and I am hoping you are right. But as you know from us being together in the past, we get a lot of questions on the potential impact and in the spirit of transparency and knowing that we are giving guidance for the year and that if you have a catalyst event, it gave us the opportunity to provide some more context to help investors understand what that potential impact would be. Even though with highly likelihood almost certain litigation and delays we felt it was appropriate to provide that transparency.
