The blending of lending: Consumer loans are going the way of one-stop shopping, and as creditors cross into broader categories, this new finance title says convergence is a trend worth banking on

Folio: The Magazine for Magazine Management, March, 2002 by Susan Thea Posnock

While working the mortgage finance beat at American Banker, Jonathan Hornblass got an inkling that consumer lending was going generic. More and more, it didn't matter whether Joe Consumer was buying his first condo or financing a new Buick--his request was going under the heading of "consumer loan" rather than a home or auto loan. Technology was slowly breaking down the walls of categorical, specialized lending.

Nine years later Hornblass, who went on to found his own financial newsletter operation in 1995, was still stuck on the notion that lending markets were blending, but publications covering the market were becoming increasingly specialized.

Seeing an opportunity, Hornblass launched Lending Intelligence, a 20,000-controlled-circ magazine targeting senior professionals in the credit industry that takes an expanded look at the lending market.

But LI's approach to the banking masses may backfire, say competitors.

"The thing about trying to be an umbrella publication is that you are not perceived as strong in any one area," says Janet Reilley Hewitt, editor in chief of Mortgage Banking. "You dilute your presence by trying to be all things to all people. Even in our area, that seems narrow enough--advertisers are selling to a segment that is a slice of the market." Lending Intelligence's strategy runs counter to everything she's been seeing, at least within the mortgage arena, says Hewitt.

Hornblass, who is serving as executive editor and publisher of the bimonthly, counters that credit professionals are acutely aware of convergence--and he's confident that there's a place for this new bird's-eye view. "There's a real need to address this trans-product reality," he says.

At least one potential rival agrees. Tim Murphy, group publisher for the mortgage and credit union groups at Thomson Financial, says areas like mortgage lending have been "niched to death. If there was any opportunity at all, it would be in trying to put together an all-encompassing lending publication that reaches out to areas that are underserved at the moment," he says.

FUN WITH FINANCING

Not only is the title's approach unconventional, but its editorial tone aims to be a little offbeat, as well. "If Lending Intelligence has one mandate," Hornblass writes in his first editor's note, "it is to not be like other industry magazines. What I have always disliked about trade rags is that they are, by and large, one-dimensional."

Instead of rehashing interest rate stories, LI wants to unveil the personalities behind the business with features like "Keystone Crooks," the tale of a 77-year-old woman from West Virginia who caused one of the country's most damaging bank failures. Lighter fare includes "celebrity Closings," a look at the loans celebrities are getting to pay for their extravagant homes. But that's not to say that the title doesn't have a serious side. The cover story for the launch issue takes a look at how emergency planning has changed post-September 11.

INCREDIBLE SHRINKING VENDORS

The success or failure of the new title really hinges on a concern affecting every publication courting the financial markets, says Thomson Financial's Murphy. There's been widespread consolidation in the mortgage and banking sectors and, as a result, the number of vendors supporting the market has shrunk.

Mortgage Banking's Hewitt agrees: "There used to be thousands of institutions, now narrowed down to hundreds that are real players," she says.

Unshaken, Hornblass sees this consolidation as an opportunity: "It will force financial institutions to compress their consumer lending operations," he says. All the better for his broader editorial take. And while that might shrink LI's potential audience, Hornblass is confident that the vendor market has stabilized.

Although advertising will account for 70 to 90 percent of the magazine's revenue, Hornblass' confidence most likely comes from pre-established relationships. Although LI is his first foray into the magazine industry, he's been entrenched in the banking business with Royal Media--his newsletter operation that publishes "Home Equity News," "Auto Finance News" and "Loans Collections and Technology." According to Hornblass, most of the r 2 advertisers in the premier issue of LI are clients that were already connected to Royal Media.

Among those advertisers is National Creditors Connection Inc. (NCCI), a company that specializes in reducing loan losses for lenders. "The magazine appealed to me because of its fresh approach," says Richard Rodriguez, president and CEO of NCCI. "It gives me the exposure I need not only for future clients, but for my current clients," he says, adding that he's committed to a year-long contract.

Other advertisers appearing in the launch issue include Automotive Remarketing Services (ARS), a division of Ford; and Progressive, which provides insurance and services to financial institutions.

Despite the overall economic downturn, Hornblass says lending markets are in good shape, primarily because of low interest rates. But he does have his concerns. "The industry happens to be doing well, but that doesn't mask the fact that the broad economy infects the lending market just like every other market," he says.