TransUnion Barclays 24th Annual Global Financial Services Conference
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Okay. All right. Good morning again. Thank you for being here. I am happy to have Chris Cartwright from TransUnion, who is the CEO of TransUnion. Chris, thank you for your time.
Always a pleasure. A lot to talk through.
Maybe I will start a little bit high level, just from a macro perspective. You guys have some unique insights into what is going on in the lending environment, the consumer. We have got oil above $100, filling up the car gas tank is not cheap. Rates above 7. Just your read of the consumer and how that impacts kind of your current guidance and assessment of your financials.
Yeah, for sure. It is a good place to start. It is a bumpier world than I think we all wish that it was. Look, over the course of the third quarter, we expect that we are well-positioned to achieve the guidance that we issued in Q2, even with the upgraded targets that we outlined for the market. As you will recall, all we really did in the upgrade was to flow through the goodness from over-performance in the second quarter. We are also very cautious about not changing our mortgage estimates for the full year because we just felt like the balance of risks was more toward rate increases and some diminished mortgage volume. Overall, mortgage is our most rate-sensitive product and higher rates are not helpful. But as you know, we are at historic volume lows in the mortgage industry currently.
We're kind of at a floor level of transaction with perhaps occasionally a little bump above that for some refi activity. That's likely to diminish in the third quarter. I don't really expect that volumes will be materially impacted in card, auto, consumer lending, fintechs. They are far more insensitive to rates. There's just more spread and more opportunity to either recalibrate the rates or shorter durations, right? Net-net, I feel like the guidance that we provided, which is to achieve at or above the high in the third quarter and for the full year, we still feel pretty good about that.
Okay. How about when you think about your medium-term, your longer-term guidance, how important is mortgage to those numbers? If things just stay flat for the next year, 2 years, does that pose a risk to those numbers?
Yeah. Well, as you know from our investor day earlier this year, any improvement in mortgage volumes beyond the current level of activity we've been experiencing like Q2 and previous, that was upside to the medium-term guidance that we provided. Now look, if we do get some increased stability and some rate improvements and the like, and refi volumes pick up or purchase volumes pick up, that is very additive to the top line and the flow-through is very good.
Yeah. Let's hope that happens at some point during this kind of 3-year period.
But we don't need rates to drop, and we don't need a big influx of volume to compound the top line high single digits.
Okay. Some of the other categories where you said you do not expect to see much impact today, at least maybe let us talk to the trends, starting with auto.
Sure. What have been the trends?
You have been outperforming the market growth. What are some of the reasons for that as well?
Well, running through the other ones, auto will probably continue to be about a mid-single digit grower. In the 2023, 2024 timeframe, there was some demand pull forward, fear of tariffs and the like. The volume shot up there. Since then, it has kind of been a mid-single digit grower. I would expect that to continue. On the card side, again, it is also kind of a low to mid-single digit grower during this period. I think it is steady there. In 2024 and 2025, there was a resurgence in consumer lending activity. In particular, the fintechs started to revitalize or reinvigorated. I expect that growth rate to continue, although perhaps to abate a little bit quarter by quarter, given the higher comps that they are growing over. Things look good in consumer lending. I think the appetite for consumer loans, unsecured consumer loans is steady to growing.
It is a mainstream product now. There is a lot of capital available to the space, and the fintech players have kind of diversified their product lines and diversified across the risk spectrum as well. I feel like they are much better positioned to weather changes in rates.
Okay. Before I touch on fintech real quickly, last week, Todd had talked about how the financial services ex-mortgage had been growing high single digits for many, many quarters now. I guess the volumes- Seven-plus Yeah, have been more low single digits-ish call it.
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