This document summarizes DBRS's outlook for the U.S. consumer ABS market in 2016. It expects moderate growth of 7% overall, led by stable performance in auto ABS, credit cards, student loans, and other sectors. While most ABS will maintain stable collateral performance, some sectors like subprime auto may see rising delinquencies from expanded underwriting. Regulatory scrutiny of auto lending has increased but is expected to strengthen the industry over the long run. Overall transaction performance is projected to be in line with expectations based on structural protections in ABS deals.

1. Structured Finance: CMBS Presale Report
WFMC 2015-LC20
F E B R U A R Y 2 0 1 6
C O M M E N TA R Y
U.S. Consumer
ABS Outlook

2. Jonathan Riber
Senior Vice President
US ABS
+1 212 806 3250
jriber@dbrs.com
Christopher O’Connell
Senior Vice President
US ABS
+1 212 806 3253
coconnell@dbrs.com
Maxim Berger
Assistant Vice President
US ABS & Surveillance
+1 212 806 3279
mberger@dbrs.com
Jayce Fox
Vice President
US ABS & Surveillance
+1 212 806 3261
jfox@dbrs.com
Chuck Weilamann
Managing Director
Head of US ABS
+1 212 806 3226
cweilamann@dbrs.com
Chris D’Onofrio
Senior Vice President
US ABS
+1 212 806 3284
cdonofrio@dbrs.com
Table of Contents
U.S. ABS Issuance Outlook 3
Collateral Performance Outlook 4
Transaction Performance 5
U.S. Asset Class Summaries 5
U.S. Auto-Related ABS 5
Credit Card ABS 7
Student Loan ABS 8
Consumer Loan ABS 10
Timeshare Loan ABS 11
Conclusion 12

3. Commentary 3
U.S. CONSUMER ABS OUTLOOK FEBRUARY 2016
3
U.S. ABS Issuance Outlook
For 2016, DBRS expects moderate year-over-year (YOY) growth in five consumer ABS asset classes: auto-related ABS,
credit card receivables, private and FFELP student loans, consumer loans and timeshare receivables. DBRS projects total
volume to reach $159 billion across these major sectors for 2016, which represents a 7% increase over 2015. Auto-related
ABS, the largest sector, comprising 66% of expected volume, has shown modest growth at 2% YOY, driven in part by low oil
and gas prices.
Graph 1 illustrates actual 2014 and 2015 issuance in each sector compared with the DBRS 2016 forecast.
GRAPH 1
U.S. ABS Issuance 2014/2015 Actual vs. 2016 Estimate ($BN)
Source: DBRS, Asset-Backed Alert
* Auto includes auto loans (prime and subprime), auto leases, wholesale, rental cars, fleet leases and motorcycles.
** Student loans include Federal Family Education Loan Program and private loans.
$97.1
$44.2
$15.4
$5.2
$2.7
$98.8
$27.2
$14.4 $5.9
$2.2
$105.0
$30.0
$15.0 $6.5
$2.5
$0
$20
$40
$60
$80
$100
$120
Auto* Credit Card Student Loan** Consumer Loan Timeshare Loan
2014 Actual 2015 Actual 2016 Estimate
Global oil prices and North American natural gas prices have declined in recent months, reaching lows that have not
been seen since the last decade. However, DBRS does not believe current price levels or even lower price boundaries are
sustainable in the long term, notwithstanding the fact that market rebalancing and a material recovery in prices is unlikely
to materialize in 2016 (see DBRS Outlook on Oil and Gas Industry). Low prices at the gas pump have, in part, translated into
marginal increases in disposable income for U.S. consumers, resulting in stable and/or lower levels of delinquencies and
losses from prior years in the major consumer ABS sectors.
Even with increased amounts of bank lending throughout 2015, U.S. ABS issuance began to taper off in Q4 2015 because of
wider spreads causing securitization to become a less attractive financing option for issuers, specifically among bank issuers
and larger captive finance companies. The widening of spreads was partially attributed to uncertainty around the Federal
Reserve’s plans for interest rates. The modest rate hike in December 2015 was widely expected. However, the Fed’s soft
guidance on interest rate policy going forward continues to permeate market sentiment along with uncertainty regarding
Chinese equity markets, the muted effectiveness of European central banks to stimulate their respective economies, and
the aggressive interest rate reductions by the Bank of Japan. As a result, market volatility continues. If, however, uncertainty
subsides and spreads shrink, DBRS expects YOY issuance in 2016 to be higher by mid to high single-digit levels (on a
percentage basis). Sectors that may experience continued growth are subprime auto ABS, auto lease ABS and marketplace
lending (specifically in the student loan refinance and consumer loan sectors).

4. Commentary 4
U.S. CONSUMER ABS OUTLOOK FEBRUARY 2016
4
Graph 2 details the 2014/2015 YOY growth or decline in the major consumer ABS sectors:
GRAPH 2
Year-Over-Year Growth by Asset Class
Auto
Loan-
Prime
Auto
Loan- Sub-
Prime
Auto
Lease
CC-
Private
CC- Bank FFELP Private SL Timeshare
Consumer
Loans
Growth Decline
-11% 25% 9% 48% -45% -41% 148% -18% 14%
-50%
0%
50%
100%
150%
200%
Issuance in 2015 was essentially flat for the overall U.S. auto ABS sector, with growth of less than 2%. However, specific
auto subsectors did exhibit both substantial growth and precipitous declines as described in the Auto ABS section. Credit
card ABS fell by approximately 38%, mainly because of a reduction of issuance in the bank card market. Consumer loan ABS
rose moderately by approximately 14%, while timeshare ABS decline moderately by 18%. The private and Federal Family
Education Loan Program (FFELP) student loan ABS asset classes were down over 6%; however, the volume of private
student loan ABS increased over 140%. This significant growth was partially driven by bigger volumes from a number of
student loan refinancing lenders. Conversely, student loan ABS backed by the FFELP was down by over 40%, primarily
driven by perceived extension risk.
The FFELP extension risk concern relates to securities (or “notes”) that are at risk of not paying off by their legal final
maturity dates. Such notes have experienced much lower-than-expected payment rates resulting from a combination
of slow, voluntary prepayments and high deferment and forbearance rates in addition to the growing popularity of the
Income-Based Repayment program. DBRS believes FFELP ABS issuance may rebound in 2016 if the extension risk issues
are addressed. This may entail reviewing each transaction’s legal documents and potentially amending transactions to
define new legal final maturity dates. In order to achieve the modifications, approval by the requisite majority of noteholders
would be needed, necessitating additional analysis to confirm credit quality and the sufficiency of enhancement.
COLLATERAL PERFORMANCE OUTLOOK
DBRSexpectsstablecollateralperformancetocontinueinto2016acrossmostoftheauto,creditcard,consumerloan,student
loan and timeshare ABS sectors, following a trend similar to that experienced in 2015. Slow but continued improvements in
both the macroeconomic landscape and financial health of consumers should help to maintain asset quality; however, some
ABS sectors may show some asset weakness for recent and future vintages, as underwriting trends continue to be relaxed.
This can be seen in auto ABS, where expanded underwriting standards and an expected decline in vehicle recovery values
contribute to the DBRS view that losses will continue reversion to pre-crisis levels. However, ABS structures continue to
incorporate structural features that DBRS believes are sufficiently likely to mitigate any minor to moderate deterioration
in collateral performance.

5. Commentary 5
U.S. CONSUMER ABS OUTLOOK FEBRUARY 2016
5
TRANSACTION PERFORMANCE
Anticipated stable collateral performance in conjunction with the aforementioned ABS structural features is expected to
translate into transaction performance within DBRS expectations for the asset class. In 2015, the upgrade to downgrade
ratio for all U.S. Consumer ABS transactions rated by DBRS was approximately 29 to 1. Chart 1 details the types of rating
actions taken by DBRS in 2015.
CHART 1
U.S. Consumer ABS Surveillance Rating Actions 2015
81.26%
12.45%
0.13%
0.27%
5.89%
6.29%
Confirmed Discontinued - Repaid Downgraded Under Review - Negative Upgraded
DBRS expects to see similar rating performance in 2016.
U.S. Asset Class Summaries
U.S. AUTO-RELATED ABS
DBRS anticipates growth in the auto-related ABS sector of approximately 6% in 2016, supported by a continuing trend
of strong new vehicle sales. New vehicle sales in the United States reached newfound heights in 2015, finishing at 17.38
million units up from 16.44 million units in 2014. This surpasses the previous high of 17.34 million units sold in 2000. DBRS
expects this trend to continue in 2016, with sales possibly reaching 18 million units. However, it is possible that much of the
pent-up demand in the auto market caused by the Great Recession has been satisfied, which may dampen 2016 sales figures.
Nevertheless, low gas prices are expected to continue to benefit the financial situation of U.S. households, which should
continue to strengthen vehicle sales. Used car prices continue to be high, and residual value realizations remain strong,
which should help sustain lease availability among finance companies in 2016. Alternatively, increasing lease penetration,
which toward the end of 2015 made up over a quarter of new vehicle sales, may be an indicator that prices are too high in
the new car market.
Between 2014 and 2015, overall auto ABS increased by approximately 2%. However, certain segments of the auto ABS
market saw strong growth in issuance while others saw issuance decline.
• Prime auto loan ABS was down 11% YOY, with total issuance volumes of approximately $38 billion.
• Subprime auto loan issuance was up nearly 25%, reaching over $27 billion.
• Auto lease ABS issuance continued climbing, going from $15.8 billion in 2014 to $17.1 billion in 2015, a moderate increase of
over 8%.
• Wholesale auto ABS was down over 20% from 2014, declining to $8 billion from $10.5 billion.
• Both fleet lease and rental car transactions increased in 2015, although by significantly different margins:

6. Commentary 6
U.S. CONSUMER ABS OUTLOOK FEBRUARY 2016
6
• Fleet lease ABS went up less than 1%, hovering slightly below $4 billion.
• Rental car transactions increased over 125%, reaching $2.6 billion in issuance.
The significant increase in rental car issuance can be largely attributed to the return of Hertz Corp. into the markets after
a hiatus that lasted through 2014.
GRAPH 3
U.S. Auto ABS 2015 Issuance and YOY Growth
$38.0
$27.0
$17.0
$8.0
$4.0 $2.6
-11%
25%
8%
-20%
1%
125%
-40%
-20%
0%
20%
40%
60%
80%
100%
120%
140%
$0
$5
$10
$15
$20
$25
$30
$35
$40
Prime Auto ABS Subprime Auto
ABS
Auto Lease WholeSale Fleet Lease Rental Car
$Billions
Year-Over-YearGrowth
Issuance Volume YOY Growth
Even with higher sales volumes, prime auto loan ABS issuance declined, which is believed to be attributable to the increased
funding costs in the ABS market that occurred toward the end of 2015. Banks and captive finance companies had other
sources of funding available to them and chose not to access the ABS market as frequently as before. DBRS believes this
trend may continue into 2016 if market spreads remain wide versus alternative funding options. For example, both BBVA1
Compass and Bank of the West, two regional banks that regularly issue ABS, withdrew auto loan deals from the market in
late 2015. Similarly, Porsche decided against issuing its second auto lease deal of 2015, citing increased funding costs.
Some of the non-captive and/or smaller auto loan ABS sponsors that rely on the ABS markets for continued operations
increased issuance volumes. California Republic Bank, a regional bank focused on the prime consumer, increased issuance
from $1.05 billion in 2014 to $1.55 billion in 2015. Issuance volume in subprime auto ABS increased, in some cases in
conjunction with expansion of underwriting standards. DBRS observed a number of issuers extending contract terms for
borrowers exceeding 72 months, with some as long as 84 months. There has also been a greater focus on deep subprime
borrowers (FICO scores below 550).
Santander Consumer USA revived its Drive Auto Receivables Trust (DRIVE) ABS platform in 2015 after shuttering the
program in 2006. DRIVE focuses on borrowers with FICO scores that are on average 50 points lower than Santander’s
SDART program, which has FICO scores that average around 600. Three new subprime lenders issued their first rated
securitizations in 2015. These were GFC Lending, LLC (d/b/a GO Financial), Skopos Financial LLC (Skopos) and Global
Lending Services LLC (GLS). GO Financial, an indirect affiliate of DriveTime Car Sales Company, LLC (Drivetime), focuses
on a deeper subprime customer (versus Drivetime), using a loan-pooling/revenue sharing model with dealers. GO Financial
accessed the market with two rated transactions in 2015 totaling $345 million. Skopos issued twice in 2015, with the second
transaction carrying a DBRS rating. Finally GLS issued its first rated transaction in 2015, previously issuing an unrated
transaction in 2014. All three issuers—GO Financial, Skopos and GLS—issued transactions with a majority of borrowers
with FICO scores below 550.
1. Banco Bilbao Vizcaya Argentaria

7. Commentary 7
U.S. CONSUMER ABS OUTLOOK FEBRUARY 2016
7
Auto loan originations for borrowers with credit scores lower than 620 are now nearing their pre-recessionary highs on a
dollar-sales volume. They are still below the pre-recessionary peak percentage levels but are steadily rising (see graph below).
Nevertheless, DBRS does not currently believe that the recovery of lending volumes are prima facie evidence of a bubble.
GRAPH 4
U.S. Subprime Auto Loan Originations: 620 FICO Score
0%
5%
10%
15%
20%
25%
30%
35%
04:Q1
04:Q2
04:Q3
04:Q4
05:Q1
05:Q2
05:Q3
05:Q4
06:Q1
06:Q2
06:Q3
06:Q4
07:Q1
07:Q2
07:Q3
07:Q4
08:Q1
08:Q2
08:Q3
08:Q4
09:Q1
09:Q2
09:Q3
09:Q4
10:Q1
10:Q2
10:Q3
10:Q4
11:Q1
11:Q2
11:Q3
11:Q4
12:Q1
12:Q2
12:Q3
12:Q4
13:Q1
13:Q2
13:Q3
13:Q4
14:Q1
14:Q2
14:Q3
14:Q4
15:Q1
15:Q2
15:Q3
$-
$5
$10
$15
$20
$25
$30
$35
$40
$45
%ofTotalAutoLoanOriginations
$Billions
Auto Loan Origination Volume: 620 FICO 620 FICO Auto Loan Originations as a % of Total
The 2015 auto sector continued to be under intense regulatory investigation, which yielded several penalties in 2015 for auto
finance companies. Aside from the Volkswagen emissions investigation that made international headlines, many smaller
auto finance companies faced increased scrutiny from regulators such as the Consumer Financial Protection Bureau and
Federal Trade Commission, as well as from state regulators and the Department of Justice. In the short- to medium-term,
related investigations and fines may negatively affect a company’s focus as well as balance sheet strength. Further, credit
performance may suffer because of alteration that may be needed in the servicing and collections processes. Over the longer
term, the regulatory oversight and required related actions are expected to strengthen the overall auto lending industry by
increasing company diligence, omitting unethical lending and collection practices and improving consumers’ welfare.
Even with this increased focus on lower-credit borrowers, most subprime auto ABS continues to perform within
DBRS expectations. While delinquencies and losses have slowly risen, transaction credit enhancement levels together
with other structural protections (e.g., deleveraging) present in most transactions created the basis for a stable rating
environment in 2015. Rating actions (aside from discontinuations due to repayment) taken by DBRS on auto loan ABS
were upgrades (13%), downgrades (0.30%) or confirmations (86%). DBRS expects to see similar performance trends and
transaction structures in 2016.
CREDIT CARD ABS
DBRS expects credit card issuance to increase in 2016, with the potential for 10% growth over the growth seen in 2015. Bank
credit card issuers may be the biggest contributors to growth, with approximately $25 billion of credit card ABS scheduled
to mature in 2016. Furthermore, as the level of non-securitized card receivables continues to grow on banks’ balance sheets,
they may decide to move some of those assets into the ABS markets to diversify their funding.
In 2014, overall credit card term ABS issuance was $44.6 billion, whereas 2015 saw a steep decline of 38% to approximately
$27 billion. Bank issuers were the reason for this decline, as their volumes were down by 45% since 2014, issuing only
$23 billion in 2015. As a result, retail credit card ABS issuance saw significant growth as a relative portion of total credit
card ABS issuance, accounting for 16% in 2015 compared with 6% and 7% of total credit card ABS issuance in 2014 and

8. Commentary 8
U.S. CONSUMER ABS OUTLOOK FEBRUARY 2016
8
2013, respectively. The majority of retail card issuance growth came from the spinoff of Synchrony Financial from GE
Capital, which issued $2.2 billion. Other major retail issuers in 2015 were Comenity Bank (issuing under the World
Financial Network master trust) and World’s Foremost Bank (issuing under the Cabela’s master trust), issuing $1.1 billion
and $0.7 billion, respectively.
GRAPH 5
U.S. Bank and Private Label Credit Card ABS Issuance
$41.70
$22.90
$2.90
$4.30
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
$50.00
2014 2015
$Millions
Credit Card - Bank Credit Card - Private
Although unsecured revolving credit balances have grown, a decline in bank credit card issuance is believed to be
attributed to several factors, including a lower relative balance of maturing credit card series, regulatory changes that
removed beneficial capital treatment, and substantial bank-deposit funding. In addition, and similar to auto-related ABS,
the widening of spreads in the ABS market in Q4 2015 made securitization a less attractive financing option for banks to
fund their credit card businesses.
Credit card ABS performance was strong in 2015, with delinquencies and charge-offs continuing the post-crisis trend
and bringing these metrics in line with historical lows. This continued improvement in performance can be attributed
to growth in master trust receivables, decreasing unemployment rates and improved consumer economic circumstances.
Furthermore, lenders had transitioned to higher-quality borrowers after the Great Recession, resulting in master trusts’
exhibiting higher percentages of more seasoned borrowers and consequently lower delinquency and charge-off rates.
Although underwriting standards have become more relaxed over the past year, the percentage of subprime borrowers
within these master trusts is still well below historical peak levels. All DBRS rating actions (aside from discontinuations
due to repayment) in credit card ABS consisted of rating confirmations. Barring any unforeseen dramatic economic shifts,
DBRS expects similar performance of credit card collateral into 2016.
STUDENT LOAN ABS
DBRS expects student loan ABS issuance to remain in the $15 billion range in 2016, similar to 2014 and 2015. However, it
is possible that aggregate 2016 issuance could exceed this range if FFELP issuance resumes. DBRS expects private student
loan ABS issuance volumes to increase substantially as the burgeoning student loan refinance market continues to grow,
with entrenched players continuing to issue more transactions with larger volumes, and new competitors potentially
entering the space.
In 2015, total student loan ABS new issuance totaled approximately $14.4 billion, down 6.8% from the $15.4 billion of
new issuance in 2014. While the majority of 2014 student loan ABS issuance comprised FFELP loans at approximately
$12.6 billion (accounting for 82% of the market), 2015 saw a more even split between FFELP and private student loan
securitizations, at 51% and 49%, respectively, of total student loan ABS issuance.

9. Commentary 9
U.S. CONSUMER ABS OUTLOOK FEBRUARY 2016
9
GRAPH 6
2014 Student Loan U.S. ABS Issuance 2015 Student Loan U.S. ABS Issuance
Private SL
18%
FFELP
82%
Private SL
49%
FFELP
51%
The more even distribution between FFELP and private student loan securitization issuance can be attributed to two
factors: (1) that the rise in private student loan issuance was greater than anticipated, and (2) that there was a decrease in
FFELP issuance as a result of the uncertainty regarding extension risk with existing securitizations.
DBRS expected private student loan issuance to increase in 2015 as the refinance industry matures (see newsletter: “Private
Student Loan Issuance Volume Expected to Increase in 2015”). Issuance in 2014 was $2.8 billion, while 2015 issuance more
than doubled to $7.4 billion. This is in large part due to a considerable rise in the student loan refinance securitization
market.In2015,SoFiLendingCorp.(SoFi),theinitialentrantinthestudentloanrefinancingmarket,surpasseditscombined
2013/2014 issuance on both a deal- and dollar-volume basis. In addition, two new issuers entered the market – Darien
Rowayton Bank and CommonBond, Inc. – issuing five deals in total. Furthermore, more established issuers, including
Navient Solutions, Inc. and Sallie Mae Bank, issued a total of $3.8 billion in private student loan ABS in 2015 compared with
$2.2 billion in 2014.
GRAPH 7
Student Loan Refinance U.S. ABS Issuance
$152
$554
$1,680
$96
$898
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
2013 2014 2015
$Millions
SoFi CommonBond DRB
The increased volume and related investor participation in 2015 suggests a growing comfort with the collateral quality and
default risk of private student securitizations. More specifically, discharging private student loans because of bankruptcy
is considered by some to be less of a consideration now than it may have been in the past (see newsletter: “Dischargeability
of Private Student Loans: Not as Bad as It Seems”). Furthermore, the performance of more seasoned student loan refinance
transactions has exceeded expectations as demonstrated by the experience of SoFi’s inaugural 2013 securitization (see
DBRS Performance Analytics Report).

10. Commentary 10
U.S. CONSUMER ABS OUTLOOK FEBRUARY 2016
10
The 2015 FFELP ABS issuance was nearly half that of 2014 because of the dislocation of the FFELP market, as mentioned
earlier, and the related uncertainty associated with issuing new transactions (see newsletter: “DBRS Reviews Extension
Risk in FFELP ABS Transactions” and “FFELP ABS Extension Risk: Implications of Event of Default”). While the legal final
maturity date extension issue does not have a material impact on credit risk per se, the concern for investors centers on the
potential for a technical event of default to be triggered, which in turn could affect cash flow mechanics in a transaction’s
priority of payments by shifting them from pro rata to sequential payments. Furthermore, outstanding ratings may be
reduced in anticipation of a transaction’s experiencing an event of default.
Generally, DBRS expects the credit quality of both FFELP and private student loan ABS to remain stable during 2016. Lower
unemployment rates should benefit student loan borrowers, who are typically younger and a group that has experienced
higher unemployment than the general U.S. populace since the Great Recession. In 2015, all rating actions (aside from
discontinuations due to repayment) taken by DBRS on student loan securitizations were confirmations (80 in total), as
performance was bolstered by macroeconomic factors in the United States (e.g., lower unemployment and commodity
prices). DBRS does not expect significant changes in the direction of credit trends for student loan ABS in 2016.
CONSUMER LOAN ABS
In 2016, DBRS expects a moderate 10% increase to $6.5 billion in total issuance volume for the consumer loan ABS sector.
This expectation may be moderated based on the ability of marketplace lenders to enter the securitization market.
Consumer loan ABS issuance continued to increase on a YOY basis but at a much slower pace than in the previous
year. While 2014 had $5.1 billion of issuance volume, an increase of over 400% YOY, 2015 only had a YOY increase of
approximately 14%, finishing off the year with $5.9 billion in issuance volume. However, this moderate increase compared
with the previous year was expected, as the sector had only re-emerged in 2013.
GRAPH 8
U.S. Unsecured Consumer Loan ABS Issuance
$968 $592
$1,477
$1,944
$2,772
$2,622
$1,647
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
2013 2014 2015
$Millions
Springleaf OneMain Other*
* Other includes issuance by Marketplace lenders, Oportun Financial Corp, Purchasing Power LLC, and the SpringCastle Funding Asset-Backed Notes 2014-A transaction.
OneMain Financial Inc. (OneMain) and Springleaf Finance Corp. (Springleaf) continued to be the dominant issuers in the
sector, having issued $2.77 billion and $1.47 billion in term ABS, respectively. In November 2015, OneMain and Springleaf
announced a merger, creating the nation’s largest personal loan lender to subprime borrowers, with nearly $15 billion
of finance receivables and 2.4 million customers. The merger will be conducted in stages, and the combined company is
expected to continue issuing securities into the term ABS market under the two platforms, with a merger of the platforms
expected sometime in the future. As part of the merger, the Department of Justice required Springleaf to divest branches in

11. Commentary 11
U.S. CONSUMER ABS OUTLOOK FEBRUARY 2016
11
overlapping territories, which resulted in the sale of 127 branches in 11 states to Lendmark Financial Services (Lendmark).
Lendmark, another personal loan lender to subprime borrowers, has a smaller geographical footprint than either OneMain
or Springleaf, but it may possess the critical mass needed to enter the ABS market.
Transactions collateralized by unsecured consumer loans originated under marketplace lending platforms entered the
rated term ABS markets in 2015. Four transactions totaling $1.36 billion closed in 2015 and were backed by unsecured
consumer installment loans originated and serviced through the online platform operated by Prosper Funding LLC. Prosper
Funding LLC, is a wholly owned subsidiary of Prosper Marketplace, Inc. Prosper Funding LLC is a marketplace lending
platform that has partnered with WebBank, a Utah state-chartered industrial bank, to originate consumer installment
loans. The inaugural securitization, Consumer Credit Origination Loan Trust 2015-1, was sponsored by BlackRock Financial
Management Inc. The other three securitizations, issued under the Citi Held for Asset Issuance platform, were sponsored
by Citigroup Inc.
The marketplace lending model did face challenges in 2015, specifically from the court case Madden vs. Midland Funding,
LLC. The court decision has raised questions about the ability of purchasers to “export rates” on bank loans allowing the
purchasers to collect the rate originally contracted in the loan agreement. For marketplace lenders, it raises concerns on
whether or not they or their investors purchasing the loans can rely on The National Bank Act (the Act). The Act preempts
state usury laws when the interest rates on national bank loans are in conflict with the state usury law. This has led some
lenders to seek lending licenses on a state-by-state basis, to consider modifying their origination practices or to adjust
compensation structures. The decision is still being appealed, and it is difficult to predict whether the decision will be
reversed (see DBRS newsletter entitled: Federal Court Decision Creates Uncertainty for Non-Bank Loan Assignees and
Certain Marketplace Lenders).
Two additional sponsors issued consumer loan transactions into the ABS markets in 2015. Purchasing Power, LLC and
Oportun Financial Corporation both issued securities in aggregate of $285 million into the ABS markets. Purchasing
Power, LLC is the leading provider of organization-sponsored, payroll deduction-based employee purchase programs. The
consumer installment contracts in its debut transaction, Purchasing Power Funding 2015-A, LLC, are designed to have all
of its customer payments made through employee payroll deduction or allotment programs with their employer. Oportun
Financial Corporation, formerly known as Progreso Financiero Holdings, Inc., is a specialty finance company that focuses
on providing small consumer loans to Hispanic consumers with limited or no credit history. Oportun had previously issued
three term deals into the ABS markets.
DBRS expects the credit quality of unsecured consumer loan ABS to be relatively stable during 2016. In 2015, all rating
actions taken by DBRS on unsecured consumer loan securitizations were confirmations (18 in total), with performance
supported by lower individual leverage and the broader economic recovery (e.g., lower unemployment). DBRS expects that
this trend will continue for unsecured consumer ABS in 2016.
TIMESHARE LOAN ABS
For 2016, DBRS expects an increase in timeshare ABS issuance of over 10%, growing issuance volume to $2.5 billion, which
is in line with recent historical issuance volumes seen in the sector. For the majority of sponsors of timeshare ABS, timeshare
sales have increased YOY. Higher sales can be attributed to the improving U.S. economy and the low unemployment rate,
which are expected to continue to drive the timeshare market this year. Continued origination volume should continue to
create supply for 2016 ABS issuance.
2015 was the fourth consecutive year in which timeshare ABS term issuance was above $2 billion. Total 2015 term ABS
issuance was approximately $2.2 billion, down from $2.7 billion the previous year. While no new issuers entered the market
in 2015, there were some notable names absent, specifically Silverleaf and Hilton, which have been consistent issuers in
previous years.

12. Commentary 12
U.S. CONSUMER ABS OUTLOOK FEBRUARY 2016
12
Starwood Hotels Resorts Worldwide, Inc., which last issued into the term ABS market in 2012, had announced in October
2015thatitwillbesellingitstimesharebusinesstoIntervalLeisureGroup.Subsequently,Starwoodannouncedanagreement
with Marriott International, Inc. to merge the two companies into what will be the world’s largest hotel company. Marriott,
which had previously spun off its timeshare business in 2011, has issued into the market once per year for the past three
years. The impact on term timeshare ABS issuance resulting from these developments is yet uncertain.
Timeshare loan ABS transactions continue exhibiting low levels of delinquencies and losses driven in part by positive
economic trends. Furthermore, structural enhancements such as optional repurchases or substitutions of poorly performing
loans have helped keep losses low. In 2015, rating actions taken by DBRS on timeshare loan securitizations were upgrades
(10%) or confirmations (90%). DBRS expects a similar rating performance in 2016, as it believes timeshare ABS sponsors
will continue to support transactions through optional repurchases and substitutions.
Conclusion
While2016stillpresentssomechallengestothetermconsumerABSmarketswiththeloomingpresidentialelection,interest
rate variability (both domestically and abroad), commodities volatility and Chinese equity uncertainty, DBRS expects
the ultimate 2016 issuance to increase. Further, stable performance evidenced in 2015 should continue, with consumers
demonstrating an ability to manage debt loads in the current economic environment. This is expected to also result in stable
transaction performance.
Note:
All figures are in U.S. dollars unless otherwise noted.
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