The Allied Finance Adjusters, Then, Now and Always

A Message from the AFA President

GUEST EDITORIAL

Not since 1942, when World War II brought auto production and repossessions to a halt for three years has the repossession industry faced a crisis like the one we are in the progress of recovering from. Allied Finance Adjusters was there long before the war, and when the war ended, Allied Finance Adjusters has been there to help our members re-establish themselves in the postwar world. And now, as we crawl from the shadows of the COVID-19 Pandemic, Allied Finance Adjusters still stands strong and is steadfast in their support of the industry, their members as well as their employees. Allied is poised to take on today’s challenges.

Over the past year and a half, we’ve seen a never-ending stream of legislation aimed at stopping self-help repossession, and all have fizzled into empty threats. In April 2021, California Congresswoman Maxine Waters introduced H.R. 2547, the “Comprehensive Debt Collection Improvement Act” which threatens to redefine repossessors as debt collectors. Not surprising, this bill breezed through the Democrat controlled House in May of this year. While it has advanced to the Senate, as of this date it has not been brought to vote.

And of course, this is not the only such repossession industry focused legislation being proposed. “Squad” members Ayanna Pressley’s “Stop Debt Collection Abuse Act” threatens the same. But like earlier efforts from last year, it’s gone nowhere since its introduction. As frightening as these bills are, their probability of passing the almost split Senate, are slim to none.

Let me explain why, because the American Bankers Association, the NAFCU, CUNA and numerous other lobbyists have already warned the more reasonable elements of Congress of the dire ramifications of such actions. These bills are liberal minded eye candy designed to excite the leftist base and introduced with full knowledge that they will not find a receptive audience in the Senate. Two more reasons these pose little threat, is that they are focused on a $3T infrastructure package with lots of candy to hand out to supporters, and don’t forget their summer recess is just a couple of weeks away. It is not to say that dangers do not exist, but as time goes by and the pandemic’s impact is reduced, the probability of these bills advancing diminishes.

Rest assured Allied has taken an active role in lobbying against this onslaught of legislation. We have paid attention to the key players and have taken steps to inform them of the ramifications and dangers to the industry if such bills pass.

Conventional wisdom would tell us that the pandemic and its’ shutdowns, layoffs and high unemployment, would have resulted in likewise record high delinquency levels and eventual repossession volume. But as the result of unprecedented loan extensions and modifications, the precursor delinquencies never transpired. Likewise, repossession assignment volume never emerged. As the result, we have seen an unfortunate growing trend in repossession agencies closing or retooling themselves for other endeavors.

Exasperating this issue are other factors that squeeze on already thin profit margins. Inflation is rearing its ugly head in the form of rising fuel prices, the largest expense of every repossession company. Federal and state subsidies to unemployment benefits are also creating hiring deficiencies that weigh on operational efficiency and production. And of course, the ever-rising costs of insurance that contribute to profit margins that were unreasonably low even before the pandemic struck.

Let’s not forget, these fees are almost completely in control by the nation’s largest lenders who have for many years now, been partnering with the repossession forwarding industry. Forwarding of itself is not inherently wrong and has always been a negative part of the industry, either formally or informally between companies. However, the combined downward pressure on both repossession and ancillary fees by the lenders they partner with, are often unfair pay or no-pay policies of the forwarding industry who control somewhere between 70-80% of the nation’s repossession volume and have pushed our struggling industry to the breaking point.

The forwarders and the lenders have their own needs. The repossession industry has its own as well. There will never come a time when forwarders or lenders say “Hey, I really care a lot about the repossession agencies survival, so I’m going to pay more.” It’s just not going to happen.

Sitting in a room with groups of lenders and forwarders strategizing how to help the repossession industry thrive will always look like a “what’s in it for me?” proposition to them. The repossession agency is nothing more than paid muscle for them. So, what is to be gained by these interactions? Not much. We have allowed the forwarding companies to infiltrate our industry by selling the lenders their own bill of goods. The forwarders walk in and offer a substantial benefit package to our lenders all designed to line the pockets of the owners, board of directors or anyone willing to invest in these predators. As we have all discovered most of the time these profits are based on how much the forwarding companies can steal from the hard-working professional agents doing the dirty work while the forwarding companies reap the rewards.

Allied Finance Adjusters is the only repossession agency owner association in the nation, period. Just as in the beginning, Allied has focused on the repossession agency owners and their staff with no conflicting motives. Membership in the Allied Finance Adjusters is an investment in your business and an investment in your industry. Unlike other trade associations that are owned and designed for someone to profit from membership, Allied Finance Adjusters is member owned.

Since 1936, The Allied Finance Adjusters then known as the “The National Association of Allied Finance Adjusters” have been there for the then fledgling industry. Early on, the primary benefit of the Allied Finance Adjusters was part of “The Book”, the only marketing material available to the lending industry at its time. But as competing associations developed, so did other “Books.” The primary difference between the associations then became, aside from name of course, the value of membership.

Membership has always been more than a word or recognition of paid dues for Allied. While there are some outstanding state associations, Allied Finance Adjusters is the only national repossession industry association representing the agency owners and agency employees. Other books are riddled with forwarding companies advertising their services in areas once serviced by you the private company owner. Those listings designed to line the pockets of the association owners they are not designed to aid in your survival.

My questions, as well as yours as a company owner, should be “why did we let the fox in the hen house,” and “why am I paying the price while I pay my dues to support my association who has increased their profits on my back.”. I bet no one has ever looked at it that way. Allied Finance Adjusters Book is designed to highlight our members by not including outside forwarding companies that are killing your futures in the industry. Allied does not profit on the backs of our members.

Through our working relationship with the Eagle XX Group, and their best in industry compliance training, and our $1,000,000 Fidelity Bond, along with our on staff legal counsel, we remain steadfast and dedicated in our investment to our members.

Allied Finance Adjusters members, their companies and employees combined with their dedication to professionalism within the industry are the most valuable tool any lender can possess to safely and professionally recover their delinquent collateral.

As President of Allied Finance Adjusters, I am proud to lead this group of individuals during these trying times. I look forward to working through todays ever increasing challenges with this amazing team. With your help and dedication, combined with Allied lobbying efforts, we can weather the storm and remain on top of the industry as an association.

We’ve Got This!