Barry referenced the statistics on loans, even subprime loans, showing that default spikes are usually less common in the latter stage of a loan's term. Also, the larger effect of the housing downturn will not be appreciable, as he said that Centrix's portfolio management program involved people with a very low homeownership profile. "Less than 15% in the portfolio are homeowners. The defaults we see now are individual occurrences. It is a very predictable portfolio at this point."

The CU portfolio management clients weren't given a lot of choice in the matter in what happened to their portfolios, admitted Barry. So much of that was driven by legal constraints and consequences. "That deal was structured to expedite a deal that the court would approve, and the sale was disclosed, and had the blessing of all interested parties," he added. Since then, Robert Sutton's stake, which was 5% at that time, has now been diluted to 1%.

Barry stressed that Flatiron has gone through several iterations and "the ownership structure is very different now." Sutton, former president of Centrix Financial, was involved in the transition to Peak5, but he retains "an extreme minority shareholder stake, that is nonoperational and nonvoting." Flatiron is the holding company for Peak5.

"In our operational objectives, we realized there had to be a distinction between the two entities, and we've worked very hard to explain our new brand," said Barry of the Centrix shadow. "But to see a new entity emerge from an old one is nothing new." As for his history at the old Centrix, Barry remarked that he'd also worked at Citigroup and other financials, "so my background isn't just tied to Centrix. I'm looking to establish new financial relationships. Only time will heal these wounds. Some of those credit union clients came kicking and screaming, but we've made believers of many of them."

In addition to its auto service solutions, Peak5 provides strategic billing, payment processing and collection services for the health care industry and customized service and reporting for credit card operations, including application processing, skip tracing, early-out programs and pre- and post-charge-off collections.

"In looking at the portfolio and other opportunities, Peak5 over the last year has grown our receivables management to service portfolios outside the credit union spectrum," Barry said. "We have a very strong servicing platform. As the dust settles, we still have very strong CU relationships."

One of the expansion efforts involves Access Capital Investment Group of Denver, which is headed by Jeff Huchison. Huchison is no stranger to Peak5 operations; he worked at Centrix for five years, leaving in early 2006. "I worked in the loan participation area, and I got an invaluable level of expertise from working on loan participations for credit unions," he said.

Huchison described Access Capital as a loan participation and liquidity solutions company. "The reporting requirements for loan participations are very complicated. It also requires expertise in the funding and structuring of the loan participations. Peak5 assists with ongoing reporting of participated loans," he said.

Many credit unions do not pursue loan participations because of these various complications. "If a credit union wants to start a loan participation program they need to structure a deal and that's what we do," Huchison said. Access Capital is working with 12 credit unions to structure loan participations of between $50 million and $75 million in the next several months.

"Of the new credit union relationships we have, many of them are with CUs that were not involved with Centrix," Huchison said. "Centrix had some fatal flaws, and the outcome didn't work out well for me, either. I lost my job. The bankruptcy ended my employment so I had to start over again myself."

But Huchison said he believed in what Centrix tried to do even if it wasn't perfect. "I learned a lot from that experience, and it's made me want to try harder and be better. Many of those executives didn't run for the hills, either. They stayed and faced it. One credit union president, a woman I know well actually told me she thought she'd never see me again. But now she's a client of ours. I worked to the best of my ability to resolve many of those problems."

Huchison feels there is still a "huge level of expertise at Flatiron. We have so many tools and are so removed from the past. Our purpose is still to empower credit unions to be better auto lenders by using the tools we have. We can still do that."

Barry said he was happy finally to clear the air a bit and remove any confusion over Peak5. "We are a new entity, and we're still out here plugging along. We still represent the best interests of the credit unions that were involved in the Centrix PMP and we want to reintroduce ourselves into the credit union marketplace. Karma and all other things cosmic will surely enter into it."

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