A call to arms – CALR | CURepossession

A call to arms - CALR

Since its founding over 50 years ago, CALR has vigorously represented the California Repossessor community. In this time, it has helped pass 30+ revisions to the law that have helped both repossessors and clients alike. It has simultaneously beaten back numerous proposed law changes that would have adversely impacted our community of small businesses. The repossessor community now faces a challenge and CALR needs it’s members to fight.

Over the past decade, we have seen a dramatic decrease in fees across the board: repo fees are down, redemption and property fees down or outright eliminated, close fees are practically extinct, flatbed fees, delivery fees, etc., etc. In a low inflation environment, while distasteful, this trend was still manageable. However, given the dramatic rise in inflation over the past several years – labor, fuel, rent, insurance and equipment pricing have all shot through the roof – profits have evaporated and we no longer have a sustainable business model. Something has to give.

The only option at this point is to insist on increasing repossession and ancillary fees to help offset the costs increases we are all experiencing. The time has come to educate our clients on the squeeze we have been facing and have serious discussions about raising prices across the industry.

While the country is experiencing inflation rates not seen in 40+ years, California remains one of, if not the worst and most expensive places to do business. And the forwarders know this. To wit: in 2021, a major national forwarder moved out of the state leaving only a small contingency of remote workforce here. Forwarders have that luxury. We do not.

With this background and a sense of partnership top of mind, the attached letter was sent to the nation’s forwarders over two months ago by seven of California’s largest recovery agencies. Seven of the largest agencies in the state reached out a few months ago to request, in good faith, a modest price increase. However, given the continued rise in inflation, this modest ask is not enough.

Thus far there has been little more than lip service paid to the request: a few nice letters in return, a few conversations, a few candid executives complaining at how unreasonable the lender community’s demands have become, and yet – no actual movement.

So this is where CALR’s members come in. The more voices the clients hear re demand for higher fees, the better our chances of getting real movement. Some of you may have read about agencies in Florida that have turned off their LPR cameras systems and refused work from the forwarders until their fee demands are met. We don’t believe we need to go that far, at least not as an opening salvo, and that such a “nuclear option” will only foster resentment and bad relationships with our client community – no one likes to be forced to do something at the proverbial point of a gun.

We do believe we can negotiate reasonable fee increases in good faith. But that will require a united front from all members. If we are all asking for increases and pushing back, it’s a lot harder for them to say no. We are the boots on the ground in the collateral recovery industry – without what we do, loan losses and interest rates would skyrocket and credit would become unavailable to a huge portion of the consumer population.

The working men and women of the recovery industry and the small business owners who are trying their damndest to provide a good career deserve better than to be squeezed on revenues and costs. The value we provide is far beyond what we are compensated. We call on all our members to make their voices heard to the forwarding and lending community to reset expectations and deliver fair compensation for the work delivered.