Synchrony Financial (SYF) Earnings Call Transcript & Summary

All right. We're going to get started. Kicking off the conference for the third straight year. We're excited to once again have Synchrony joining us. Synchrony has managed the credit cycle better than most. And this has resulted in being the best performing large capstock across our coverage in 2024. Joining us to share their insights are CEO, Brian Doubles; and CFO, Brian Wenzel. Today's presentation is going to be a fireside chat.

So Brian, a lot has changed since the last time we heard from you, particularly around the election. Obviously, a lot of things can change. But maybe could you spend a minute, talking about what this can mean for your business? And just more broadly, how it positions you entering 2025?

Yes, I think, Ryan. Well, first, thanks for having us. We're excited to kick off the conference again. Look, I think we've operated this business for almost 80 years through different administrations, and we've successfully grown it. We've added new partners. We supported our customers. So we try to be somewhat agnostic when it comes to who's in control in D.C. With that said, there's obviously a lot of speculation about potentially a lighter regulatory environment as we head into 2025. At this point, that doesn't change how we're thinking about running the business. I think we have to see what actually materializes. But look, I think that would obviously be a positive for us, I think it would be a positive for the industry, but we have to see how it actually materializes in terms of what we would potentially do differently. But again, I think overall, it's a positive arc. It's nice to think about but we've got to see what actually comes into play as we get into '25.

Got you. And thinking about the whole regulatory environment, obviously, over the last year, late fees has been a big focus. There was a ruling out Friday in Texas. Maybe just update us where things are in the courts of those who may have missed it and maybe what we're watching for at this point?

Yes. So Friday was a positive development, I think, for the industry. Judge Pittman did 2 things. One, kept the case in Texas, which I think is positive. He also kept the preliminary injunction in place. And then if you read the actual opinion, he made some positive commentary around the likelihood of success on the merits of the case. But it's in no way done at this point. I mean, we still -- the litigation will likely continue or potentially will continue, and we'll obviously continue to watch that very closely as we move forward.

So you guys were ahead of this issue, putting mitigation in place. Maybe just talk about how the mitigation efforts are going? How are they progressing relative to expectations? Maybe what's been better or worse? And maybe just what has the client response been as you put these in place?

About the mitigation, they generally have been in line. We did a lot of -- from APR perspective, the balance building has been probably better than our expectation, which is positive. I think when you think about some of the fees that we implement, particularly the paper statement fee, I think there's a couple of things that happened there. One, we've actually seen probably greater-than-anticipated e-bill adoption, which I think is great, to get someone into digital servicing and all the aspects there. So the fee income is a little less but it's just manifesting itself on the operating expense line. I think when we take a step back, the fear that we had and the one positive thing about being in advance of this is we had test versus control. And so when you look at test versus control, the attrition rate that we anticipated did not really materialize to the same level. So I think we're positive about that. So there's a little bit of shift between what, I'd say, if you call it, mitigants, in our business as usual case. So I think when you look at it in totality, it's delivered what we thought. And again, we needed to get ahead of the issue because there was a cliff and the rule went in effect the day when it was going to. So again, I think we're positive. It's been very constructive, and we'll continue to monitor that test versus control as we move forward.

Maybe just one last question on the topic. Brian, you alluded to the fact that there could be broader changes coming in D.C., I think particularly at the CFPB. Well, obviously, the court case has a lot of -- has to work itself out. But can you maybe just talk about how you think about the different changes you've implemented? What you think could actually stay over time versus what you could potentially ease over the longer term?

Well, I think -- I mean, look, we're not planning on making any changes to the pricing actions at this point. We got to see how the litigation progresses. And we need some level of certainty. In the event it does go away, then we would go out and talk to our partners just like we did when the late fee proposal was announced. We do that very transparently. It's collaborative. These are true partnerships. We sit down with them. We go through the impact. We look at a lot of different considerations with their customers, how we underwrite the behavioral changes, if any, that we've seen up until this point. So we would do -- run a very similar play and go out and talk to all of them and then we would make a decision together.

Maybe, Brian, let's shift gears and spend a few minutes talking about the health of the consumer. We've seen spend volumes move negative year-over-year. And there's been obviously a slowing of larger ticket items and less spending on discretionary. However, I think on the last call, you guys talked about spend starting to stabilize. So maybe just talk about what you're seeing across different cohorts? And what do you think it's going to take to get spend to start to improve?

Yes. I think the consumer has been much more resilient, I think, than any of us thought a year ago. They've hung in there. I think if you look at the credit metrics that we put out this morning, we're seeing that stabilization largely performing in line with expectations. We made a couple of rounds of tightening on our underwriting policies. You're seeing the impact of that in purchase volume and new accounts. But with that said, when we look inside the consumer, obviously, lower income consumers are being impacted more significantly than higher income consumers. You know our business, we underwrite across the spectrum. So we certainly feel the effects of that. But from a credit perspective, dialing back the spend, particularly in the lower income cohorts, is actually a good thing. When we dig into the data and look at it, we don't see consumers that are overextending and that's a real positive, I think. And so we still feel very comfortable with this kind of backdrop of an operating environment. So we're still pretty bullish on the consumer. I think they've been more resilient than we thought. And I think -- look, you get a little more stability in the economy, I think you'll see spend come back to more historic levels.

Got you. And you referenced the 8-K that you put out this morning, showed stable month-over-month delinquencies and our metrics outperformed seasonality. Net charge-offs were down. Obviously, there's some days adjusted in there. But maybe just talk about what you're seeing in terms of credit trends, what does spending look like quarter-to-date and any noticeable differences from prior quarters?

Yes. So let's start with where you ended. When you think about the growth of the business, we reported this morning, end-of-period loans up 1.7%. So you did see a little bit of seasonal tick up October, November. In all honestly, a little bit lighter than our expectations as we entered into the quarter. And a lot of that was more in the October time frame where we thought it was going to -- we're going to see a little bit more of a ramp-up as we move towards the holiday season. It didn't necessarily happen but it's been relatively stable. We have seen some stabilization and then obviously, then you start getting into holiday, which we'll talk about in a second in November. When you think about holiday for a second, the changing calendar, it sounds like retailers, changing calendar has a later Thanksgiving here in the U.S. So one of the things we were watching was whether or not you see pull forward of spend pre-Thanksgiving week, pre-Cyber Monday. We didn't necessarily see that. But we did see some robust activity in Thanksgiving weekend and into Cyber Monday. When we pull apart the book, right, we have a large number that are holiday-centric that will have holiday ramp. Then we have a fair number that are not holiday oriented. When we look at the holiday business, that is outperforming the overall business. So we did see the lift. We saw in certain days, some real strength in the Thanksgiving week. Obviously, this is all impacted by the modest credit actions that we put in place, both on a volume side and a new account side. So it's a little bit unclear as you have less days and one less weekend day as we get towards actual Christmas. So we're constructive now, but again, a little bit lighter than expectations. When you think about credit, where you started with the 8-K this morning, you saw a couple of things, we look at seasonality. I want to say this is the fifth consecutive month as we look at seasonality month-on-month, it's slightly better than seasonality. Again, that low to mid-single basis -- single-digit basis points better, so we're encouraged by that. Delinquency rates flat month-on-month, and the loss rate is flat. Again, there's 2 less cycles that comes back in December, but you're going to get the recovery adjustment. So I think when we look at it, credit developing as we anticipated and as we talked about it, and again, I think we'll be back in January to kind of show that year-over-year performance and continue hopefully to see the bend, the growth of delinquencies both 30 plus and 90 plus. So from that standpoint, I think we're encouraged that the credit actions are taking place but it has impacted volume and it has impacted new accounts.

Maybe just to close out on 4Q. You obviously highlighted loan growth being a little bit slower than expected. Anything else to highlight, NII or any other moving pieces on the fourth quarter guidance?

Yes. We're not going to really update fourth quarter guidance. I mean, obviously, if you see credit, you've got 2 months of credit data, you got 2 months of growth data, and that will flow through, I think, your model. But we're not going to go through all the pieces mostly, Ryan, at this point.

Okay. So Brian, I feel like much of the year has been spent talking about credit and late fees, much less time focusing on the business and driving growth for your partners. Maybe just talk about the investment that you've been doing and how you're helping drive growth across your partner base?

Yes. The big area for us over the last couple of years has been really investing in the product suite. And I think we have the most comprehensive product suite in the industry. It's really resonating with our partners who, I think, have realized now that they want to have a choice of what financing product they offer to which customer, for which type of purchase that they're making. And that's a big shift over the last 3 years. And so our partners as we're competing for whether it's renewals or new opportunities, that's really resonating with them. They love the idea of a menu of options, whether it's Revolving, PLCC, Co-Brand, Secured Card, buy now, pay later, SetPay, we've got the suite of products. So we can go in and say, okay, if you've got a customer that's maybe new to credit, this is the product that you want to offer them, algorithm in the background that kind of presents that depending on the type of customer and the purchase. And then you graduate them over time. And I think we've been able to demonstrate with our partners that, that's really powerful, both economically for them but it's also the right decision for the consumer. So that's one big area of investment for us. The other one is just around the customer experience. It's never been more important than it is right now. Consumers out there, they have a ton of choices. They have a lot of choices on how they pay, how they finance those purchases. And so we've been investing a lot, not only in how we integrate into our partners' ecosystem, whether it's wallets, in-store, online, their own proprietary app but also integrating with aggregators with e-carts, with digital wallets, like that's a big area. There's a lot of disruption at the point of sale. And at the end of the day, we have to be everywhere our partners are and everywhere their customers are. They want to have us as an option everywhere that they're transacting. And that landscape has gotten a lot more complicated. And so that's another big area. And then the last one I would say is really around PRISM, our underwriting engine. And that's a big competitive advantage for us. We leverage a lot of different data sources in order to be able to make really good credit decisions across the income spectrum without taking on additional risk. And if I go back 5 years, we had very sophisticated underwriting at that point, but we didn't really use it as a competitive advantage. It's surprising now as we're out there competing for new business. That's almost the first thing we're talking about. Prospective partners are very focused on what does your approval rate look like across the income and credit spectrum. We can go in there and we can borrow their customer base, and we can show them exactly what it would look like. And what we hear back from prospective partners is that's a real differentiator for us. These are just a few of the areas that we've been investing heavily in.

Got you. Maybe to dig into some of the businesses. So there's obviously been a lot of fintechs coming after your Health & Wellness business, but that hasn't stopped it from being a strongest growth platform. I think accounts were up 7%, and loans, 10%. Maybe just talk about what's driving the success in this business? And maybe what are some of the keys to sustaining this growth?

Look, it's a great franchise. We've been in that business for 37 years. We've got tremendous scale. We're in over 70% of the dental offices, the veterinary offices, ophthalmology offices in the United States. And that's a very fragmented space. So it really is a ground game. I mean, you're out there signing up 1 or 2 dental offices at a time, 1 or 2 vets but we've got tremendous scale. It's certainly helped by some macro trends in terms of it's a $400 billion addressable market. We're still a tiny little fraction of that. So lots of room to grow. And so we feel like we've got the right to win. We've got the relationships. We've got the endorsements. It is -- from a customer perspective, it's our highest rated product across the board, highest NPS scores, when you're helping a parent get braces for their kids that they might not otherwise be able to afford or their dog gets sick and you save the dog's life with CareCredit, like those are -- I get more positive feedback on our CareCredit...

[ I am proud ] I tried this in my life.

Yes. Well, we can sign you up after this. But yes, no, that is probably -- if I look across our platforms, that's probably our biggest opportunity. And I think, again, we've got the right to win because we've got the franchise, we've got a big addressable market to go after.

Brian Wenzel, before we get into the organic pipeline, I wanted to just spend a minute just talking about loan growth before we get into the organic growth. We're expecting low single digits for this year. And obviously, you commented it's been a little bit slower. Can you maybe just talk about just broadly expectations. What do you see driving loan growth? And then you've obviously taken actions to tighten underwriting, and this has obviously helped on the delinquency formation. Maybe just talk about what you've done and what you need to see to loosen some of the tightening that you've put in.

Yes. So if you think about the broader-based actions, we obviously look at our partners' channels and products every day. And if we see something idiosyncratic, we deal with it. The broader-based actions came in '23 and the early part of '24. '23 was focused around score migration. So we saw a significant score migration, particularly into non-prime. We tightened those accounts because, again, you're still on the backside of the pandemic when scores were inflated. And we did some acquisition tightening during '23. In '24, the actions, just to recap those, they were around if someone took a debt consolidation loan to consolidate debt but still had a lot of open to buy out there. And then second, if we saw people, the bureau not paying down their student loans, we looked at both those combinations and said, this may not be a problem today but it shows potential ability to pay. So we obviously either monitor those accounts or took action on those accounts. And clearly, you've seen it, even though for the last 12 years, we've put up over 20 million new accounts, and we'll see where we end this year. You've seen it in new accounts, and you've seen a modest reduction in purchase volume. I think as we look at the book and we see what's happening with credit and we get more comfortable with credit, the question is going to be in the macro economy, even though delinquencies aren't necessarily as macro, it's really too much credit in the system. If we can see affordability for certain income cohorts come down, we see them kind of strengthened. That's one of our signs. And then we'll obviously watch our performance. So is there a scenario if you look in the back half of 2025, there's some easing of the restrictions that are in place. That is a scenario that you have. There's another scenario that's broader, that's probably less likely. And then I think as you move into '26, that's when you probably see more of the restrictions kind of -- when you take that, right, that kind of tailwind at some point and you look at the consumer, as Brian talked about, they've been resilient but the pullback that we've seen across all of our verticals and particularly the bigger ticket discretionary purchases, people get confidence in where they're going, that's when you're going to start to see a revival of that. And some things create tailwinds. When you think about Health & Wellness, if you delayed LASIK, you're probably going to get LASIK, the need hasn't gone away. So that creates other tailwinds on some of the discretionary purposes that are bent up. So our hope is that the economy gets on a strong foot. Partially when you started on the administration, did feel good about it and that discretionary will come back. I think those combinations of 2 things. Payment rate is going to continue to moderate even though the pace of moderation has slowed, which gives you a little bit of the tailwind. So we'll be back in January, I think, with a more thoughtful view on how we think about loan growth as we step through 2025.

Brian, earlier on, you referenced in the areas that you're investing. You talked about renewals and new business opportunities. Maybe if we could start on new business opportunities and new business wins. Whether it's a startup or portfolios that are with competitors, what does the pipeline look like? And how are you thinking about new portfolio additions into 2025?

Yes. Look, we have a strong pipeline. The BD team has been very active over the last 12 to 18 months, a combination of start-up opportunities, some larger programs. We like both. What we're really focused on is making sure that we can get an arrangement with the partner where our interests are aligned, like that is the most important thing. And these are 7-, 10-year relationships. And so you have to have good alignment of interest. We do that largely through the sharing of the RSA so that when we do have to make some, whether it's credit decisions or pricing decisions that we're both kind of benefiting in the same way and thinking about the program in the same way. And that's the most important thing we look for. We look for alignment. We look for strong risk-adjusted returns. I'd say, if I look at the market more broadly, because the environment has been a little bit uncertain, we're seeing pretty good discipline out there right now. And I think that's generally the case. It hasn't been really frothy in terms of how people are pricing out there. You'll always find maybe pockets of rationality. But I think generally, there's been pretty good discipline, which is good. We like that kind of environment. Prospective partners are very focused on the 3 things that I said; the product suite, how we underwrite and how we're differentiated there, the customer experience, our ability to integrate. And frankly, we've got a great set of references ready to go on any prospective new opportunity. Our partners are fantastic in terms of talking to others out there and talking about what we bring to the table, how we think about partnership and our capabilities.

And just one point of clarification. In your remarks, you said there's some startups and some larger programs. Was that in reference to newer programs? Is that inorganic opportunities?

Just regular program. Yes, both. I would say, regular programs that come to market occasionally. Now there's probably less of that right now. If you go back over the last 2 or 3 years, the larger programs that have existing portfolios, a lot of them have been renewed. And obviously, we've renewed a number of ours and still have a lot of our competitors.

So you mentioned renewals. I think the last 2 quarters, you renewed or launched 15 new partners each quarter. And as you said, many of your largest partners, I think, are signed up at least through '26. Maybe just talk about, and you referenced it a little bit in your last remarks, like what are some of the recent trends been in renewals and how are you factoring in things like late fees or the broader economy when signing up or renewing a partner?

Yes, I'll handle the last part first. The late fees thing has been a challenge. Whether we're pricing new opportunities or looking at renewals, we've had to build in protections, we've had to think about that, again, very transparently with the partners. And so some of the -- many of the program agreements, whether it's a renewal or a new opportunity, we have scenarios that are actually built into the contract. If this happens, then this is what we both agree to do because it's impactful enough that it has to be considered upfront, and we've been successful doing that. I think in terms of the renewals that we've done, we're very pleased with them, Verizon, JCPenney, we've done a bunch. And typically, there's something -- as you get into one of these long-term agreements, there's something that we want to change. It could be enhancing the value prop, it could be making a bigger investment in technology. And so we'll come to the table and say, hey, look, we want to make a bigger investment. We want to do this. We're going to add 5 or 6 years to the contract. And we're always having those dialogues with our partners, and we try to do it in a way, again, very transparently where there -- there's always some things that we might not love in the contract, some things that they don't love, and we try to get that sorted out and add some years to the back end.

Brian, maybe let's shift gears and spend a couple of minutes to talk about credit. We obviously talked about the monthly data earlier on. When you look, delinquencies have been outperforming expectations, I think you said, for the last 5 or 6 months. Losses have still been, I think, a little stubbornly high. Can you maybe just talk about what's driving this divergence? And do you expect that this is going to normalize over the medium-term time frame?

Sure. And I'd say it's -- I'll say, it's relatively simple. The number of accounts actually in delinquency are down. So unit delinquencies are down, which is obviously giving us a little bit less revenue. You're seeing just a higher balance of things that are in there, which, again, if you look at past trends, the balance growth from the pre-pandemic period is up, right? You expect that. So you see a little bit of higher balance kind of going through there. Well, certainly, I think what you're also seeing is for many consumers, they lack liquidity in various aspects. You go back 5, 6 years ago or even longer, you could more get a home equity line or you had other sources of income. So once you're in delinquency now, it's a little bit tougher. Entry for us is much better than 2019. And when you have someone that rolls into delinquency now, they are generally more challenged to solve. So I think between better roll into delinquency, less units rolling in and then just higher balances, that's giving you a little bit higher loss content than what we've seen in the past. But again, I think we're looking at the trends and the trends have been positive from a seasonality basis month-on-month as we close out 2024.

And you've made some upbeat comments on the -- I think it was the back half of the '23 vintage and what you've seen early in 2024. Can you maybe just update us on how those things progressing? And has the outperformance continued? And what does that mean for the overall loss content of the book?

Yes. I think when you look at those 2 vintages, those are clearly the vintages where we've taken the credit actions and they've manifested themselves. So we've talked about it quite a bit. I'd say, from the last time we updated you in October, there's been no real significant changes in those vintages. So again, that's really more reflective, I think, of the actions we've taken and what's going into those 2 vintages.

And maybe one last one on losses. You referenced earlier, I'm sure we're going to get guidance at 4Q earnings. Losses have been running north of your 5.5% to 6% where you underwrite to. Can you maybe just talk about what you think we need to see or when do you expect losses to get back to that targeted loss range?

Yes. I think what you're seeing now is the stability and delinquency. I think you're seeing that trend bend on the year-over-year growth. I think those are the positions, I would say, as you step in, put aside '25 for a second, first quarter is always a little bit higher on seasonality, right? You have the delinquency build in the fourth and then you have the seasonal run-off receivables. That's going to continue on. So you see that seasonal trend. But again, the actions we've taken and the performance in delinquency, we think, gives us that trend, and we continue to underwrite towards that 5.5% to 6%. We've never said every year is going to be in 5.5% to 6%. We're over now. A lot of this is because in '21 and '22, there's so much credit pushed out into the system that consumers in theory had a lot of access. And now the industry pulled back, well, you're digesting that. And so I think that creates a tailwind. I think you're seeing it in many issuers, delinquency formation. So I think those are the things that you'll see that gives us some overview of how the trajectory of loss rate moves in '25.

And maybe to just round up the discussion on the overall credit. So the allowance is right around 10.8. You talked about it being relatively flat year-over-year. Seems like the markets have gained confidence in soft landing or whatever you want to call the economic outlook. Maybe what does this mean for the allowance, where it's headed? And what do you need to see for this to come down further back towards the early CECL day-1 levels?

Yes, I think it's confidence, right? When you look at your reserving model, the first question is what's happening in your rules and delinquencies in the vintage curves, right? That's the quantitative piece of it. And then the qualitative piece is how do we think about the environment. I mean, we've continued to assess it, look at it. I think when you go back in the middle of the year, I think in fairness, everyone looked at it and everyone thought inflation was going to come down faster, interest rates are going to come down faster, they didn't. So we were a little bit more cautious, I think, in the middle part of the year. I think when we got into October, we said, hey, listen, we do think the reserve rate is going to come down, right, and generally be closer to what we thought was going to be the exit rate in '23. Now it's really about the denominator. So nothing's really changed, I think, with regard to that. So I think we are a little bit more confident when it comes to the economy and that piece of it. Again, remember, this was not -- the losses here are not unemployment driven. So I do think you're going to see the rate come down. I do think you'll continue to see it move back towards, and we don't really have a view that we can't get back to a day-1 CECL even though that was normal for about 4 days, it's all that happened, right? I remember sitting back in 2019, and were like, "COVID, I wouldn't worry about that." But anyway, so I do think the trajectory is going to move in that direction.

Maybe to switch gears and just talk about margin and deposit repricing dynamics. So you've talked about tailwinds that you have in the margin into next year. You've moved aggressively to cut deposit rates since September. Maybe just talk a little bit about what your strategy has been in terms of reducing deposit rates and how slower loan growth has factored into that?

Yes. So the one thing we did as we think about our deposits and liquidity, right now, having access to liquidity is not the worst thing. If I'm raising money at a high-yield savings at 4.10%, I'm getting high 4s from the Fed. A positive economic may hurt the net interest margin. I think we're willing to take that because growth will come. We've averaged high single digits. We're going to get back to there. So having excess liquidity before then, I think, reduces that funding need, number one. Two, I think what we try to do is line the book up to take advantage of the rate decline. So we have a significant amount of CDs that mature really in the first half of next year, mainly the second quarter. So I think hopefully, continued rate environment will help us on those renewals as we slide down. So I think that's how we think a little bit about the market. We obviously look at competitors. And there are, what I'd say, resistance points, there's resistance points of 5% when you thought about CDs in high-yield savings, there was a resistance point at 4%. Now we've seen a number of issuers, including one you're more familiar with, they would push below 4%. So that's obviously good. But we have to maintain a spread. In order for us to have positive flow or deposits, we have to make a little bit of spread because we don't put as much into marketing around that. So I think that's a positive trend. I think we'll see what happens here with the Fed. People have continued to move down here in recent weeks, and we'll continue to follow the market down and be aggressive. But we don't want to curb the growth because we know we're going to need the funding. And again, it's not negative to the P&L in the short term.

Brian, maybe let's spend a minute just talking about capital. Your capital ratio is over 13%, continue to return to shareholders by the dividend buyback. And there's still some uncertainty regarding where rules will go but things appear to be moving in the right direction. What are you waiting to see to be able to leverage the capital back to that 11% level and how do you think about leveraging the capital versus maintaining some dry powder for the eventual return of loan growth that Brian articulated?

Yes, it will come back. And I think, obviously, organic growth is still our top priority for use of capital. I think dividend is second, share repurchases and then a trade-off between that and more inorganic growth. We're very disciplined around inorganic growth and M&A. You haven't seen us. You haven't seen that be a big use of capital for the company over the years. We like smaller acquisitions that we can scale. I think Ally Lending is a great example, Allegro, Pets Best, those are all modest capital outlays. But there are companies where we look at. What we're doing, we say, okay, leveraging our scale, we can grow that. So I think the priorities haven't changed. We do believe we should be back down closer to something in the 11% range, and we think we can get there. I think we've demonstrated propensity to buy back shares. I think there's no question about that. I think we've retired half the shares for the company in the last 10 years. So that's certainly a very attractive use of capital as well.

We've got about a minute or two to go here. So the stock has done incredibly well this year. Maybe you could argue that it was in the wrong place last year...

Yes, I would argue that.

I do think that you made that point when you were here in the same seat last year. Obviously, we've seen a really nice re-rating. Do you think the market is missing anything anymore? Or -- and what do you think is the next leg for the story for Synchrony?

No, I think like we talked about last year, I did feel all the negative was priced into the stock, whether it was late fees, more regulation, just everything, it felt like maybe uncertainty in the economy and credit and uncertainty in election. And now a lot of that has unwound and I feel like, okay, now we're getting credit for all the great work that the team is doing. We've got a fantastic set of partners. We've got over 70 million customers. We've made big investments in all the areas that we talked about. And I feel like if we just -- there's still a little bit -- probably a little bit of an overhang on the regulatory stuff and a little bit of uncertainty there. I think in the next, hopefully, 3 to 6 months, that abates. I think you get a little more -- a few more data points on the credit trajectory, which we think will demonstrate that the changes we made are having an impact. And then I think it's back to the growth mode. It's investing in Health & Wellness and our digital partners, the products that the customer experience, I feel great about how we're positioned on all of that stuff.

Well, I was going to end there but you did make 2 references to regulations. So I did want to throw one last one to...

Oh, you're going to end on regulation.

Any last -- any things, Brian, that you're just most focused on that you think will be impactful in terms of regulations that we're waiting on to impact Synchrony?

Yes. Listen, I think from a capital standpoint, we feel good. There's positive vibes, more certainly on Category 4 banks being scoped out on the tailoring. I think there's a push to have more tailoring back. Hopefully, that goes through. We were clearly monitoring the long-term debt rule and with the applicability there. And then it's back to every day, dealing with our regulators, engaging on their supervision of us and trying to be as proactive and responsive as we can. So again, the biggest thing externally on rulemaking is probably long-term debt. Basel III is probably backburner. Obviously, Brian talked at length about late fees. Now it's really just about how do we partner with our regulators to see how we run the business.

Great. Well, please join me in thanking Synchrony.

Thanks, Ryan.