Looks like Uncle Sam will not be paying off our credit card bills anytime soon. Big opportunities ahead for debt settlement companies to help consumers and banks.
Debt Forgiveness a No-Go with Regulators
An unlikely alliance of financial industry and consumer advocate groups went to Federal bank regulators asking for relief. Providing a bellwether of the type of debt settlement needs ahead for customers, these groups went asking for government assistance in a plan to forgive mountains of credit card debt that is snowballing in defaults.
The Office of the Comptroller of the Currency rejected this industry plan, which would have forgiven as much as 40 percent of outstanding consumer credit card debt. This proposal itself reflects the crisis bubbling up in the credit card market.
Credit Card Industry Proposed 40% Forgiveness
The proposal from the credit card industry would have allowed these financial institutions to defer losses on consumer credit accounts for several years on consumer debt they forgive. However, the bank regulators felt that “kicking the can down the street” was not a prudent way to manage the crisis.
Consumers, even those with good credit, are being pinched by the rapidly deteriorating economy. Meanwhile, banks are taking tens of billions of dollars in losses on these defaults.
The window of opportunity is wide open for the debt settlement industry
The environment is ideal for debt settlement providers to be the emissaries for both parties.
Knowing millions of consumer credit customers are in a pickle and banks are ready to negotiate should be a great opportunity. You can help both consumers and banks to make it through the upcoming hard times.
Credit card charge-offs on balances that are written off as unpaid have climbed to 6.8 percent, climbing 48 percent from last year.
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