Dodd-Frank is now 4 years old and there are two questions that need to be asked by the professional repossession company. Where are we going, and what’s next? These are simple questions, yet the answers can be as complex as a quantum physics equation. When Dodd-Frank established the CFPB, a new lexicon of regulatory language began for the financial services industry. As for us out in the streets as a collateral recovery specialist, our new lexicon moved from being licensed, insured and bonded, to being “compliant”. Well, these years later and thousands of hours of later, where are we going? and what’s next?
As the professional repossession companies began the task of getting educated and making their companies “compliant” with the new regulatory requirements, we all began thinking that this may be the opportunity to finally make our stake and reclaim our industry that has been circling the drain for years now with the all time lowest repossession fees, the demand of overly burdening free services and more and more lenders going to a facilitator. We were thinking or as I like to say we were left with the impression that the CFPB would be the organization that the repossession industry needed to bring us back from the edge of disaster. In all honesty, I’m hoping for a positive beneficial change however the pragmatic side of me says that things will most likely stay the same for a lot longer than a lot of us may be able to bare.
This brings us to the first question of, where are we going? The professional repossession companies went out and got their education so that they may begin becoming “compliant” with the CFPB regulatory requirements. Based upon some of the education seminar information, there was an impression that the facilitator’s days may be numbered because of the CFPB’s regulatory language that could only leave an impression that the lender’s would have to re-establish a lender to vendor relationship, just as they did in the past. Well, that thought process was wishful at best. The facilitator’s again found a way to hang on. So, we have gone right back to square one
on this point. Then the Michigan Supreme Court decision was handed down and now we have the pending decision in Florida. We can only hope that these decisions can start the changes that are needed in our industry.
Professional repossession companies are under siege!!!! We professionals continued to get education and training only be undercut by the person that woke up one morning and decided to become a recovery agent. They go down to the print shop and had some business cards printed up while having a truck modified with a make shift tow rig under the shade tree in the back yard. These folks think “hey, I’m getting $200 to $275 for a car”, “wow, that’s good money”; are these folks to be blamed for their eagerness to start a business? Probably not, I actually admire them for having the drive and desire to try and better themselves thru entrepreneurship and hard work because that will be what it will take; this is no easy profession.
We all had to start somewhere. Then the problem may be the lenders or the facilitator hired by the lender with the ever increasing demands for the cheapest price; not the most qualified or capable. Anybody that has called on a lender has heard the lender get right to the point of price and maybe having the correct insurance; this has been in more conversations than can be recalled. Background checks, lot inspection, insurance verification, dishonesty bonding, licensure, compliance plan, etc. are hardly if ever mentioned; even more rarely performed. Lenders and their facilitators then lay these one-sided agreements, which are just horrible, on the repossession company.
It really makes any person question their own moral integrity when faced with decision of signing an agreement that they know is not in their best interest just to keep food on the table. Now that’s the crisis that our industry is currently in.
So, what’s next? Gosh, wish I had a crystal ball for that one. Might, the professional repossession company continue to eek out a living with ever shrinking profit margins with steady increases in the cost of doing business with an ever aging fleet of equipment.
Then there are the lenders and their facilitators’ that are always increasing their demands for the lowest repossession fees, more freebies and a longer time to pay invoices for rendered services. If you haven’t heard a lender or facilitator say to the repossession company, “you need to cut a few more corners” you haven’t been in this business long enough. Hate to say this to any lender or facilitator that makes that statement to a repossession company, hey there lender or facilitator, there is no more corners to be cut, no more meat on the bone, no more fat to be trimmed.
This cheapest cost mentality has devastated the repossession industry by beginning to deprive it of the true professionals that have integrity only to replace the professional with a pool of the less than qualified thrill seekers. The lack of accountability then creates the situation of allowing the facilitators to gain more and more share of the market then subcontracting repossession work to lowest cost contractors of various backgrounds that do drive the professional repossession out of business just because these repossession companies will do a very dangerous job cheaper.
Then there is the local lot of lender’s seeking the cheapest out there because they are willing to roll the dice playing Las Vegas house odds that nothing is going to happen to them. This is the vicious cycle the repossession industry is in. It’s no longer about providing good service at a good price; it’s about getting it done the cheapest way possible. In the end, you always get what you pay for. Professional repossession companies are getting to the “what’s next” question answer with two responses. Hang on and hope for a better tomorrow while singing with Little Orphan Annie “that the sun will come out tomorrow” or saying enough is enough and close the doors. What a freaking mess we are in!!!!
Special Services Transport, LLC
Allied Finance Adjusters and RISC member