There’s approximately 30% of all consumers, which is 67 million adults that are credit score below 670, which is credit impaired. There’s millions more that are credit visible. Now if the allegations of the lawsuit are credited, there would be a significant impact on the finance industry and all these consumers across the country. So we’ll be addressing them with the court during the course of litigation. But again, we disagree with the allegations and we intend to vigorously defend ourselves.
Moshe Orenbuch: Okay. Thanks very much.
Operator: Thank you. One moment while we prepare for the next question. And our next question will be coming from John Rowan of Janney. Your line is open.
John Rowan: Good afternoon guys.
Doug Busk: Hey, John.
John Rowan: Well, since you’re willing to speak about the lawsuit a little bit. I figured I would just ask — or just to make sure that everyone understands and maybe just get your take on it. Obviously, you can read the complaint, we can see what the maintenance of it are. When you settled with Massachusetts, I just want to make sure there was nothing in that settlement that had anything to do with user laws, right? The settlement isn’t totally clear, but it looked like it was two technical issues that one was a Massachusetts specific requirement. And another one is about posting some resale value on our repossession. There was nothing that you settled in Massachusetts from the main charge of user that you settled for, if I’m not mistaken.
Doug Busk: Yeah. The settlement agreement revolved around the two issues that you mentioned principally.
John Rowan: Okay. So just moving past that. Obviously, there was a little bit of a jump up in G&A expense. Was that there anything to do with legal expenses?
Doug Busk: G&A expense increased due to increased expenses in the technology area and in legal.
John Rowan: Okay. The provision expense, is it safe to assume that excluding forecast changes that it’s in the $90 million run rate based on the growth that you’re putting on?
Doug Busk: It was less than that in the — it was less than that in the fourth quarter. The new loan provision was $60 million, but again, keep in mind that unit volumes in the fourth quarter are typically in a kind of a seasonal low.
John Rowan: Okay. And then just again, to go back to the competitive environment, obviously, fourth quarter — the funding markets for most subprime ABS were higher in disarray or at least the spreads are really, really wide, but we’ve seen a little bit of a retrenchment here in January. There are a lot of subprime ABS deals that have come out. Spreads are quite a bit lower than they were late last year. I mean, is there anything that we can read through to the competitive environment? And how do you help us think of how this fits with you guys in a cycle that brings some spread back to you guys if this would be any indication of more competition there with more — less risk adverse funding markets? Thank you.
Doug Busk: Yeah. I mean, potentially, that causes the market to be a little bit more competitive. I mean, you’re right, the market tone this year has been more constructive. You still have a situation where base rates are elevated and credit spreads, though not as high as they were in Q4 are certainly higher than they were for a number of years. So, we’ll have to see what happens, but it’s conceivable that the competitive environment could become a little bit more intense if the funding markets continue to be constructive. We’ll just have to see how it plays out.
John Rowan: All right. Thank you.
Operator: Thank you. One moment while we prepare for the next question. Next question will be coming from Rob Wildhack of Autonomous Research. Your line is open.
