Company: ATLCL
Filing Date: 2025-03-10
Form Type: CORRESP
Source: 0001437749-25-006744
Chunk: 4

Company: Atlanticus Holdings Corp
Filing Date: 2025-03-10
Form: CORRESP
Chunk 4
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, 2023. Results impacting the $2.3 million loss in Changes in fair value of loans at fair value, included in earnings for the three months ended September 30, 2024 are as follows: 1) net gains of $52.4 million associated with fair value assessments on increases in finance and fee billings (net of subsequent payments) in excess of the billed amounts, 2) net losses of $63.5 million on the acquisition of receivables, primarily related to private label credit receivables which have below market pricing and 3) improvements in the underlying performance of our fair value receivables in the form of improved delinquencies and improved net returns as well as the extension in assumed implementation dates recent CFPB rules limiting late fees charged to consumers. This extension allows more time for our product, policy and pricing changes to take effect, further offsetting the negative impact of the rule’s implementation and increasing the overall value of the receivables. These improvements in underlying performance and assumptions resulted in an increase in the fair value of consumer receivables of approximately $8.8 million.

Confidential Treatment Requested by Atlanticus Holdings Corporation
AHC - 003

| 2. | We note your response to prior comment 2 and your proposed disclosure included in your response to prior comment 1. Please revise your proposed MD&A disclosure in future filings to quantify the amount of “Changes in fair value of loans at fair value, included in earnings” recognized in each period presented. We also note you recognized total gains of $101 million in the nine months ended September 30, 2024. It appears that this $101 million gain included losses of $112 million related to merchant fees recognized in 2024 and some offsetting larger gains. Please revise your proposed MD&A disclosure in future filings to quantify and discuss the underlying causes of each material loss or gain item impacting fair value on a gross basis recognized within “Changes in fair value of loans at fair value, included in earnings.” Please include a draft of your proposed revised disclosure in your response using September 30, 2024 information. |

Company Response:

In many cases where we have a loss on acquisition of a private label receivable, we have a merchant fee to offset that loss and provide an adequate return on the investment. The merchant fee is not a 1:1 offset for recognized losses on acquisition and in many cases will more than offset the loss on acquisition. In future filings, we will modify our disclosure