Recent changes in the character of the finance company industry.

The structure of the finance industry has changed markedly in recent years. As in the case of credit union, savings and loans, and savings banks, the number f finance companies have been trending downward, although the average size of such companies has grown considerably. A survey by the Federal Reserve board revealed that in 1960 there were more than 6,400 finance companies operating in the United States, but by 1980 only about 2,000 independent companies could be found. A modest rise in the number of new firms occurred during the 1970s, however, as bank holding companies centered around some of the nation‘s largest banks organized new finance company subsidiaries.
this long-term downtrend in the industry‘s population reflects a number of powerful economic forces at work. Rising cost pressures, the broadening of markets, the need to innovate, and intensified competition from other financial institutions have encouraged finance companies to strive for lager size and greater efficiency. Many smaller companies have sold out to larger conglomerates as high interest rates squeezed earnings. Despite their declining numbers, however, finance companies rank among the fastest-growing financial intermediaries in the United States and continue to be a potent force in the markets for business and consumer credit.