Bill Carcache: Understood. That’s very helpful. Thanks. And like if I could follow up on the expense guidance. Is the hypothetical sort of, I guess, like, sort of nominal positive operating leverage, it’s like roughly 3% decrease in year-over-year OpEx growth sort of the right zipcode, given your revenue guidance?
Perry Beberman: It would decrease slightly more than revenue decreases, right? That would kind of…
Bill Carcache: Right.
Perry Beberman: …way to think about the math.
Bill Carcache: Understood. Great. Thank you for taking my questions.
Perry Beberman: Thanks, Bill.
Operator: Our next question comes from the line of Dominick Gabriele with Oppenheimer. Please go ahead.
Dominick Gabriele: Great. Excuse me. Thank you so much for taking my questions. If you think about the long-term loan growth expectation that you have had of roughly 10%-ish or so and the fact that you would be paring back from some of the lower FICO bands, most likely given this rule if it comes into effect. How does that affect your long-term loan growth rate and given if it slows it to maybe mid-single digits or whatever it may be, how do you think about that dynamic with your long-term net charge-off expectation? And I just have a follow-up. Thanks.
Ralph Andretta: Yeah. A couple of things. So we will provide more information at Investor Day as we move forward. But if you think about what we have been doing, we have really been diversifying our portfolio. So when that — when — if you think about potentially this will be going into effect and we may not be able to underwrite at the levels we have been underwriting. We have co-brands. We have direct-to-consumer now products — proprietary products. Those are products that will continue to grow over the long-haul and invest in and lean into those hard. So at this point, I think, to me, I would not want to change anything until we get to Investor Day where we can be more transparent in terms of how we are thinking about the future and how we are looking over the horizon.
Dominick Gabriele: Perfect. Thanks so much for that. And Perry you kind of answered this in another answer, but I was hoping to get some an example out there just to gauge the magnitude of some of this late fee impact on the efficiency ratio. If I even take the fourth quarter, right, and I kind of do what your guidance is telling me to do on the revenue and I take out 25% and I keep expenses roughly flat, because, ultimately, like you have said, you need to invest, you need your employee base, that could push the efficiency ratio, if I am not doing something wrong into the high ‘60s. I am just curious if that — if that’s even remotely in the ballpark and then, I guess, it would step down over time as you get some of this back to a level of recapture that that’s feasible. But does that magnitude sound correct? Thanks so much.
Perry Beberman: Yeah. Thanks for the question. I mean, look, everyone is going plug some numbers into the model with this downside scenario. What I share with you is, there — the math is going to be the math, right? And whatever that math turns out, I mean, the first quarter of impact is an impact to revenue and then over time that will get mitigated. So you will take a hit to all of your return metrics inclusive efficiency ratio in the first quarter of implementation, that should be the worst of it and then it gets better from there to get back to places where we are comfortable.
Dominick Gabriele: Yeah. That makes perfect sense. It just feels like to me that, you want to keep your expense base strong because you are looking towards the future and in order to do that, you would have to grow expenses or whatever it may be. I really appreciate it. Thank you so much.
Perry Beberman: Thank you.
Operator: Our next question comes from John Pancari with Evercore ISI. Please go ahead.
John Pancari: Good morning and thanks as well for the detail on the late fee. Sorry to go back to it again. But just — I just want to confirm a couple of things that, to see if you had provided it or not, sorry if I missed it. But did you know what the gross impact was from the late fee that you estimated versus the net that you provided? And then also, I believe this was asked earlier, but I am not sure you mentioned, ultimately, what do you view the net impact to be that 25%. Could that go down to something like 10% of an impact or how do you view that longer term at this point? Thanks.
Perry Beberman: Thank you for the question. We provided — the number we provided, we do not provide a grossed up number if the net of some, I call, partial in flight mitigation that we expect to be put in place in advance of the actual implementation once the final rule is in place. And how far it gets mitigated against the original amount is anybody’s guess, but it will certainly mitigate over time. But as well there will be offset in other line items, as you think about reducing some underwriting, improving loss rate, reduced provision, lower expenses. I mean there’s going to be a number of things remarks through the 36 months following the final rule that will ultimately determine where we land and once that rule comes into play, once the team completes its work with all the partners, we will certainly be able to provide more information.
John Pancari: Okay. I appreciate it that you are not providing. The — but one other way that, I guess, around the mitigation anyway to help us size up, like, what percentage of overall mitigation that you considered as this rule was put out there. Like, what percentage is in that number, about half of it, you think you got through all these other measures another half on its way. How can we think about that?
Perry Beberman: Yeah. So what I would do is, ask you to just take a peek back at the slide that I have prepared and shared with you guys at the last conferences and when you think about one of the largest levers is APR repricing. Due to the way cardiac work, it takes time for that to burn in and it will — that’s why we said we are going to take some early movement on some things and that will get a jumpstart on it. But it will take some time for the existing accounts for those balances to cycle through, as well as the new vintages come online at the higher APR. So that’s going to take some time. And then once we start working with the partners, we will understand who wants to use more promotional rates, who wants us to do some fees, it’s just a lot of that goes into it.
So I really don’t want to speculate on percentages of mitigation, but there’s a lot more mitigation to come after the rule goes into effect and the work is done with the partners. But again, we are very long-term focused on what we are trying to do here and we will — we are fully committed to making sure that we get back to strong returns for the capital that we deploy against this business.
