CENTENNIAL, Colo. -- Centrix successor Peak5 is hoping one of two potential merger deals go through, so it can avoid raising rates or going out of business by year-end, said CEO Kevn Barry.
Barry said his auto loan volume has dropped drastically, causing run offs to outpace new business, resulting in a steady drain in his servicing portfolio. The dreary marketplace has resulted in three choices for Peak5: find a buyer, raise rates and ride the market out another year, or close its doors by the end of the quarter.
"The majority of our credit union clients have diminishing auto loan portfolios, to the extent that in excess of 90% of them would be at or near run off by next year," Barry said.
If a merger deal can't be reached and clients don't approve rate increases, Peak5 will "work toward an orderly wind down with all parties through the end of the year," he said.Barry has sent a couple of letters to clients already updating them on the situation, and said Centrix's failure to communicate influenced his proactive policy today.