EDITORIAL
As talk of reopening the businesses and the economy is warming up and the possibility of the aforementioned congressional bills to halt all collections and repossession activity seems to be fading, the future of the repossession industry appears as though it will emerge from this crisis more or less intact, save for the financial damage done to the agencies and their employees. In a matter of a few short weeks, I believe that we will start to see an increasing number of states easing their business restrictions and a slow recommencement of involuntary repossession assignments begin to trickle in, in varying degrees in the lessor affected states. As the agencies in these areas begin to reopen and pick up speed, it will be interesting to see what changes occur.
For years, I have beat the drum that the industries agency owners need to take it upon themselves to refuse work for substandard wages and even as recent as a couple of weeks ago, I reminded you all what a proper repossession fee would look like if annual adjustments for inflation were applied to it. Unfortunately, I’ve been talking with a few agencies operating during their local lockdowns that are still spinning their wheels on voluntaries and impound recoveries during the shelter periods and not a single one I had spoken to has raised their fees despite the fact that every time they go out, they are exposing themselves and their loved ones to the virus. How dangerous this is, is as contentious a discussion as you will find over any political debate. But here are some facts.
- The Coronavirus (COVID-19) is real.
- The virus can be transmitted through exhaled droplets in the air that can spread as far as twelve feet
- It is a persistent virus that can adhere itself to surfaces for days at a time depending upon surface type and other variables.
- There is currently no vaccine or reliable treatment for it.
- People can transmit it without showing symptoms for as much as two weeks.
- It is especially dangerous to persons with compromised immune systems and the elderly.
Whether or not you agree with any or all of the bullet points above is secondary to the fact that these are based upon solid scientific fact. Facts that have no political party or nationality and are the circumstances under which we are all attempting to function under. Believe me, I think some of these shelter in place orders, which vary in degree from state to state, are excessive, especially in rural areas and in states with extremely low infection rates and deaths. With that said, I find it disappointing that even under the risk that these circumstances create, which will continue to exist for the foreseeable future, many agency owners have not even added a “Hazard Fee” contingent to every assignment at very least.
This reluctance to address enhanced risk and stagnant fees, I fear, is going to be the case as the industry slowly emerges to “The New Normal” as everyone is happy just to be back in operation. Regardless, this is none of my business except as a long-time observer, reporter and advocate for the industry. That said, once your agencies do recommence, you can expect there will be a growing landslide of new repossession volume in the following months as loan modifications expire and the massive unemployment rates take their financial toll and create volume that may exceed your capacity and the need for services should increases dramatically over the following months. Those of you understand the concept of supply and demand, are doing yourselves and your companies a disservice if you fail to capitalize on this critical period. This isn’t price gouging, it is addressing the financial impact that this crisis has place on your businesses, addressing additional risks and providing for the future sustainability of your companies and the industry as a whole.
There will be better days ahead once the case numbers become manageable and the gloves of governmental restraint are removed. There is opportunity to not only survive, but to thrive for those that take this time as an opportunity for growth and change instead of crawling back into the stale old business models and practices that have had the industry crawling into a financial hole for decades.
As your companies emerge from these lockdowns, I feel the urge to state the redundantly and obvious, you will need to make strategic and procedural changes to ensure the safety of yourself, your staff and their loved ones. I know that most people are divided by which strategies, if any, should be employed to combat and manage this.
This has nothing to do with whether or not you fear getting the virus. This has to do with common decency that we should all extend to others in order to shelter them from possible exposure to the virus. Exposure that any of us could unwittingly create simply by not following the reasonable preventive actions like wearing protective gloves, wearing a mask, social distancing and washing your damn hands with warm soap and water frequently, all important steps that I would hope every agency operating would implement into their future procedures to minimize these risks.
Better days are ahead for the repossession industry, but a return to the same old practices will only recreate the same slow death spiral as before and another round of state level lock-downs. Real change can only be accomplished through agency owners implementing intelligent changes to their operating models and this starts from changes as big as addressing your fee stagnation to washing your damn hands.
Be safe and stay Healthy,
Kevin
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