A TSUNAMI OF DEBT IS ON THE HORIZON. IF HISTORY IS ABOUT TO REPEAT ITSELF - HOW CAN CONSUMER LENDERS PREPARE FOR THE INCREASE IN DEFAULTS?
MONITOR | RECOVER | SELL
ARE YOU TAKING UNNECESSARY RISKS WITH YOUR CUSTOMERS' PII?
As a lender, you are entrusted with large amounts of Personally Identifiable Information (PII) about your consumers and, according to several federal statutes protecting PII,** you are responsible for the security of that data. As the originating creditor, you likely have security and access protocols in place to protect this data while it remains inside your organization. But what happens when you sell or place your nonperforming accounts on the secondary market? Is your consumer’s PII still protected?
If you are like most consumer lenders, you know a portion of your loan portfolio will default. As a creditor, there are three things you can do when a customer fails to pay their debt:
1. Collect: Attempt to collect internally or Assign to a law firm or third-party collection agency
2. Sell: Sell the defaulted account and add revenue to your financial bottom-line
3. Nothing: Consider it a cost of doing business and write off the loss.
By Matt Grossman and Matt Wirz
Originally Posted on April 11, 2022 in the WSJ, download the PDF or view the full article here.
Demand softens for bonds backed by loans from riskier borrowers, along with shares of fintech consumer-lending companies. Investors are growing more skittish about bonds backed by consumer debt, worried that inflation and slowing growth will increase the number of low-income borrowers falling behind on car payments or credit card. Buyers of bonds backed by subprime car loans or credit cards are demanding the highest premiums over interest-rate benchmarks since mid-2020. Meanwhile, investors have punished shares of some financial technology companies that helped fuel a recent surge in consumer borrowing, such as Affirm Holdings and Upstart Holdings.
We sat down with EverChain's Chief Revenue Officer, Dan Green, to speak with him about why he joined EverChain. We wanted to understand the "Why" behind his passion, dedication and enthusiasm for EverChain.
Why I Join EverChain: "It’s rare to find a niche market with such a large unaddressed problem that had potentially catastrophic consequences to multiple parties. EverChain was not only the first company to identify it, but the only company that was actually solving this problem. If the problem was fascinating, EverChain’s solution was brilliant in it’s simplicity; focus on protecting the consumer during a debt sale. If you pour all your efforts into protecting the consumer before, during, and after a debt sale, you directly protect both the buyer and the seller. I knew then that this was a market moving concept and jumped in with both feet."
A major consumer lender who had historically sold nonperforming loans (NPLs) directly to an individual buyer was experiencing a high volume of consumer complaints on their sold accounts. The lender wanted to determine if selling their accounts via EverChain's Certified Network would decrease the volume of complaints, due to the extensive vetting and compliance oversight of its members.