Have you noticed a change recently in consumer credit quality, and if so, how has it affected your operations?
Published March 1, 2008 | March 2008 issue
Really, what we're seeing are people coming in with higher amounts of debt, and farther behind. [With] the availability of alternative credit, such as second mortgages and payday loans, they exhaust all of those options, but they're not taking care of the problem. ... January, February, March are our big months where we see the greatest number of people coming in, and it's all about the Christmas holidays. ... We're seeing an increase over December, for example, and we're seeing an increase over any other year in prior history, but then the last three to five years have been trending up in the number of appointments we've had for this period. So this continuing long-term trend in January-February will probably be our busiest months ever, but not unexpectedly.
Tom Jacobson, Chief Executive Officer
Consumer Credit Counseling Service of Montana—Great Falls, Mont.
I think so far this year I haven't filed a bankruptcy. I've had some people ask about them, but so far no one has really filed. I do understand that filings are going back up again around here. They were down after the new bankruptcy act went into effect; there was a big flood.
Greg Murphy, Attorney
In 2007 we had 1,160 cases filed, compared to 701 cases filed for the 2006 calendar year, and that represents a 65 percent increase in filings. In 2005, actually, we had 3,507 filings; it was [an exceptional year]. ... This year thus far we have had 88 cases filed, compared to 83 cases filed for the same period in 2007, so a slight increase.
Dianne Schmitz, Clerk
U.S. Bankruptcy Court, District of North Dakota—Fargo, N.D.
[Our customers are] primarily in the area. ...We do a lot of second [mortgages], personal loans, vehicle loans, boat loans, recreational, all that. ...[For] strictly consumer lending I do not see a lot of changes at this point in time.
Kerry Brandenburger, Loan Officer/Credit Card Manager
Dacotah Bank—Aberdeen, S.D.
I think we're kind of in an insulated market somewhat. Not that we're operating in a vacuum, but we really haven't seen credit quality being affected yet. I guess from my standpoint I'm more concerned about our members that may have gotten involved in a real estate mortgage at another financial institution that is having an interest rate change. That will increase their payments significantly and then affect their ability to pay either their consumer loans with us or other loans with other people when they come to apply for credit. ...
I would say it's a mild concern.
Brandon Riechers, Director of Consumer Lending
Royal Credit Union—Eau Claire, Wis.
I've been doing this for 15 years, and there's almost always a lull in my business in November through January—that's my quiet season. This year there was not a quiet season, which tells me that, now as the spring typically becomes my busy season, I have a feeling that there's going to be a real onslaught this spring. ... [T]he bankruptcies will probably peak six to 12 months after the foreclosure rate starts to recede.
Tim Theisen, Attorney