Issue No. 16 | July 21, 2026

Intelligence for direct marketers in insurance, home services, warranty, and protection.

This Week: The Reserve Renegotiation Case

THE NUMBER: $687.7 billion

Federal Reserve G.19 data puts finance company nonrevolving consumer credit outstanding at $687.7 billion in May 2026, down from a 2024 peak of $721.1 billion. Against that backdrop, finance companies are reviewing portfolio performance more closely, and reserve models built on older aggregate cancellation data may no longer reflect current book performance.

For DTC marketers, that creates an opportunity, not just macro noise. When reserve assumptions come under review, marketers who bring segmented cohort data to the table have stronger evidence to support a reserve rate discussion instead of treating the reserve holdback as a fixed cost.

THE OPERATIONAL ANGLE

Most programs treat the reserve holdback as a cost of doing business. It doesn’t have to be.

Reserve holdbacks on DTC VSC and home warranty financing can run past half of funded contract value. This week’s blog uses a real-world example: a finance company holding back 53% of a $100,000 campaign as a cancellation reserve, working capital sitting in someone else’s hands, priced on a risk model that may not reflect your book’s current performance. A strong reserve review typically begins the same way: segment your cancellation curves by origination vintage, down payment tier, and term structure, then compare recent cohort performance with the vintages the reserve rate was originally priced against.

In a market where finance companies are reviewing reserve assumptions more closely, the programs that show up with that data are better positioned to have the conversation. The ones that don’t may continue funding holdbacks based on assumptions that no longer reflect their current performance.

FROM THE BLOG

How to Get Your Finance Company to Lower Your Reserve Rate

Segmenting cancellation curves by vintage, term, and down payment turns a reserve rate discussion from a guess into a documented case. The post walks through the specific proof points, including recent cohort performance and structural mix shifts, that can strengthen the case for revisiting the current reserve rate.

QUICK HIT

Finance company non-revolving credit remains below its 2024 peak, at $687.7 billion in May 2026, per Fed G.19. If your last reserve discussion happened before this year’s changes in the credit environment, it may be worth revisiting whether the assumptions behind your current reserve rate still reflect your book’s performance.

Until next Tuesday —

If you’d like to see what a vintage-segmented cancel curve would show for your book, reply here and we’ll book 20 minutes.