Operator: Our next question comes from the line of Faiza Alwy with Deutsche Bank. Please proceed with your question.
Faiza Alwy: Yes. Hi. Thank you. So, first, I wanted to follow up on the point I think John made around premium increases to account for that ASC 606 or to offset some of those ASC 606 headwinds. So curious if you — if there have been any premium increases to-date and if that’s included within the adjustment this quarter, and if not, sort of how quickly do you think those premium increases can happen?
Chuck Jehl: Yeah. John, you want to
John Flynn: Hey, Chuck.
Chuck Jehl: Yeah. You want to start and then I will kind of jump in as well.
John Flynn: Yeah. At this point, we have never had a premium increase and all the years we have been doing business, we have had on reduction in premium of 15% and that was a significant time ago. If you remember in following us over the last few years, one of the things we have done, which effectuates almost what would look like a premium increase is, we have reduced the advance rate on the loan. If you remember how we price loans that you have got 95% LTV, 100%, 105% and so on. So if we were only doing an advance off of 90% of the value that would appear to be a higher premium to ensure that loan. So, we did that twice. I think it was a 5% impact when COVID happened and 2.5% not that long ago. To answer the second part of your question, how quickly could it happen?
If we feel the need to increase premiums, it’s a 30-day notice to be insured. So we could send one notice out to all of our insured credit unions, banks, funding sources and within 30 days to have that premium increase in place.
Faiza Alwy: Got it. Thank you. And then just a follow-up question broadly on the macro environment and I am curious in terms of what do you need for a recovery or really for normalization in your business, because obviously, there have been a number of headwinds over the last, call it, three years and it seems like the headwinds have been shifting and coming from different angles. And at this point, it seems like you are — there’s obviously supply chain headwinds that have been continuing. There seem to be seem to be multiple headwinds as it relates to whether it’s affordability and then some of the issues that you are talking about as it relates to defaults, things like that and then it seems like there’s an issue with the credit union funding, sort of what do you need to happen from a macro perspective for things to normalize?
Keith Jezek: Yeah. And Faiza, this is Keith. Yeah. I think you articulated it pretty well. I mean it is the conundrum of our wonderful automotive retail industry that supply chain was buffeted and supplied was hurt during COVID and right after COVID and once as an industry, we have started to figure that out a little bit, albeit manufacturer specific. Now we have this demand shortage. So, we kind of got supply figured out and now we have this demand dynamic. And it’s captured, I think, best in the Cox Moody’s Affordability Index, which as I am sure everyone on the call is aware, is now at 44 weeks on average to pay for the median used car. So that’s at an all-time high. So that’s the key factor. What do we need to make that affordable go away.
