ARLINGTON, Va. - Amid the lobbying and political maneuvering on Capitol Hill in both houses on the pending bankruptcy legislation comes some good news: the 1999 delinquency rate of 1.16% on consumer loans is the lowest reported composite delinquency rate for the last seven years. The data was the highlight of the findings in the Consumer Bankers Association's "2000 Consumer Credit Collections Study." At press time, detailed findings of the CBA's study were scheduled to be presented by BenchMark Consulting International at the association's Collections Conference May 18 in Fort Myers, Fla. Last year's respondents reported an average consumer loan delinquency rate of 1.44%, 28 basis points higher than this year's average. The study of 30 lenders participating in both the 1998 and 1999 studies also showed an increase in portfolio size. Among these 30 respondents, delinquency rates dropped by an average of 30 basis points. At the same time that delinquencies have fallen off, dollar charge off rates have increased over the last three years. Composite results of the study also show a decreasing trend in the use of internal resources for recovery efforts - 1997 respondents collected nearly three-quarters of recovery dollars in-house. In comparison, the 1999 results represent a 14% decrease from the 1997 figure. The monthly recovery rates reported in 1997 and 1998 were 0.79% and 0.59% respectively. Another key finding of the CBA study concerned the use of outsourcing for collection activities. The practice was less prevalent among 1999 respondents than with the previous year's respondents. Legal support is the most commonly reported outsource activity - 58% of respondents reported using outside legal action. No other outsource activity was reported by more than 20% of the survey respondents. -
ekingoff@cutimes.com
