Chase Bank – Squeezing the Life out of Repossession Companies


After having received $25B from the US taxpayer in 2008, JPMorgan Chase Bank is clearly not satisfied with profits up 9%, or $19B in 2011 and have found a new target to squeeze the dollar out of. The repossession industry. Recently, Chase Bank has sent to all of its repossession agencies a new contract that requires their signature and adherence of terms that will require of them a “match price” of the lowest rate they charge anyone as well as an increase in guarantee of payoff for vehicle damage that the agencies insurance will not be sufficient to cover.

In an unprecedented show of unity, the ARA, NFA, TFA and RSIG have all penned letters to their members advising them of the their concerns about this agreement. The AFA is reportedly in agreement in spirit, but are awaiting formal approvals to publish their concerns as well. While valiant and important that the associations make these statements to advise their members of the risks associated with this new agreement by Chase Bank, there are an estimated 4,000 repossession agencies and companies that perform repossessions in the United States, the national associations only represent an estimated 25% of them. That being said, these warnings should not go deaf to those unaffiliated with the associations.

If you own a repossession agency, we urge you to carefully read the terms of this contract and ask yourself some very basic questions;
  1. Will the volume make up for the thin profit margins?
  2. Is it fair that a client should be able to audit your records and mandate you charge them the lowest price and require you refund them the difference?
  3. Are you willing to risk your entire company should losses occur to Chase Bank collateral that exceed your insurance coverage?

Remember, here is a bank that needed a $25B capital infusion from the Federal Government (in other words, YOU!) in 2008, has profits up 9% in 2011 for a $19B profit and they are demanding of their vendors to assume more risk at lower prices. Gas prices are high and maybe getting higher, inflation is constant and insurance costs never go down. Perhaps it’s just me, but isn’t this all just a little counterintuitive to believe that the vendor (repossession agency) can absorb or sustain these terms?

Perhaps the survival of the repossession industry is of little or no concern to JPMorgan Chase Bank. Why should it be? It’s not their problem and they can save millions of dollars if they can get agencies to work under these terms, and I assure you, someone there will be getting a hefty bonus for pulling this off. Don’t you wish that was you? Well it’s not, you’re the people they are asking to sign your businesses away to for the “honor” of working their accounts. Lucky you!

I am sure more than a few companies out there will drink the Kool Aid. Chase Bank is counting on it. If enough of you do, you can expect to see a lot more unreasonable contracts like this coming from the other big lenders.

I don’t run your shop and I’m not trying to tell any of you what to do, but can I ask you to put on your thinking caps for a minute here folks? This contract is audacious and wreaks of the arrogance of persons residing far from the collections and repossession process who will never have to face the companies whose livelihoods they threaten to diminish and endanger. The same kind of arrogance and shortsightedness that were major contributors to the real estate meltdown and causes for the Great Recession.

Before you sign this contract, think about it real hard. It’s your business and your livelihood you’re putting in their hands.


Kevin Armstrong


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