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Posted by observer ( on November 02, 2002 at 08:44:14:

In Reply to: Re: posted by Jude on November 01, 2002 at 22:48:31:

Be careful what you wish for Jude. I'm old enough to remember when interstate banking was in its infancy. All of these banks were much smaller and collection efforts were left to individual branches. You have no idea how rough collections could be. Loan officers and branch managers took this stuff very personally. Your chances of getting sued were just about 100%.
Then, came the mega bank holding company concept. The idea being lets streamline collections into a central unit and let our branches concentrate on making loans and taking in deposits. As a result there is a steady stream of fresh defaults to deal with. You push stale collection accounts to CA's.
If banks couldn't do this, you'd see a wave of litigation over defaulted accounts that would make CAMCO's efforts look tame in comparison. Ask anyone who survived the S&L crsis in the late 80's and early 90's. The OTS essentially shut down S&L's growth. You can only make so much money servicing existing loans. What do you do to keep the doors open? You start to agressively collect on defaulted accounts. Some of these guys were absolute tigers. The theory being, "if we don't make it, you won't either".
Look at some of the mesage boards. A lot of people are posting about being sued by Providian, Metris, and Capitol One. Why? These 3 are under orders to limit there growth until the bad loan situation is under control. They have no choice. They must aggressively collect. If you try and force just the OC to deal with you, look for some reallt heavy handed treatment.

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