Monthly Accounts Receivables Roundup for November 2021

“The Window to Lift the Debt Limit is Narrowing.”

The New York Times carries that headline on a story that notes: “The United States faces a default sometime between Dec. 21 and Jan. 28 if Congress does not act to raise or suspend the debt ceiling, a Washington think tank warned.”

The think tank, the Bipartisan Policy Center, has narrowed the default window than it provided last month, and the nonpartisan group suggested that the actual deadline, or X-date, could be toward the earlier end of that range.

“Those who believe the debt limit can safely be pushed to the back of the December legislative pileup are misinformed,” said Shai Akabas, the director of economic policy at the Bipartisan Policy Center, in the article. “Congress would be flirting with financial disaster if it leaves for the holiday recess without addressing the debt limit.” Let’s hope something gets done on this.

As I’ve noted before, it would be good if Congress paid more attention to the impact such a default could have on our nation’s credit rating, which now stands at AA+, down from AAA a decade ago. Treasury Secretary Janet Yellen seems to have similar concerns. The article quotes Yellen as saying: “I cannot overstate how critical it is that Congress address this issue. America must pay its bills on time and in full. If we do not, we will eviscerate our current recovery.”

“Collections Industry Increases Hiring and Technology Investments While Preparing for the ‘Next Normal.’”

InsideARM carries that headline in its coverage of a new report released by TransUnion and Aite-Novarica Group finding that technological advancements are key to the future of our industry. InsideARM writes: “While letters and phone calls continue to be nearly universal approaches for collectors communicating with consumers, the use of text messaging has become more common.”

More than three in 10 respondents (31%) reported that their company uses this channel today compared to 22% in 2020 and 16% in 2019. The report also found that use of technologies such as online payment portals has multiple benefits: 1) they may be preferable to certain customers who do not want to have a human interaction and want to deal with their debt at a time of their choosing; 2) this service is beneficial due to the limitation on outbound telephone calls that will take effect with the implementation of new regulatory requirements.”

U.S. Credit Card Use is Returning to Pre-Pandemic Patterns According to the New York Fed.

Reuters reports that U.S. consumers are spending more and ramping up credit card balances, reversing a shift during the COVID-19 crisis, when they scaled back spending and substantially paid down debt—according to a report on household debt and credit released by the Federal Reserve Bank of New York. Reuters writes:

“The report also found that total household debt increased by $286 billion in the third quarter to $15.24 trillion, driven mostly by a $230 billion increase in mortgage balances. Total debt balances are now $1.1 trillion above where they were at the end of 2019, the report showed.” The report also notes that auto debt increased by $28 billion in the third quarter and student loan balances grew by $14 billion.

“Student Loan Borrowers Beware: Government Collection Activities Resume Next Year.”

That’s the headline from a recent article in Forbes that reads in part: “The emergency deferment period, which was put in place to provide COVID-19 emergency relief in March of 2020, is currently set to expire on January 31, 2022. This means that wage garnishment and offset of income tax returns and Social Security will resume for defaulted borrowers at this time.”

The article also notes that Congress is considering proposals to reduce or eliminate some student loans, through a program referred to as “Operation Fresh Start”, though it is unclear whether such legislation will be enacted, and if so what it would cover. Meanwhile, the article reads: “The bottom line: Borrowers with federal student loans will need to pick up where they left off with their monthly payments come February 1, 2022.”

Inflation is Rising in China, Too.

That’s the essence of a recent piece in Bloomberg that begins: “When it comes to inflation accelerating around the world, don’t count on a swift response from the two most important economies. The U.S. and China are trapped by their own policy choices and domestic priorities.”

The piece also reads: “For anyone still wedded to the idea that elevated inflation is a short-term phenomenon, a welcome respite from years of too-low readings, the latest numbers are sobering. Producer prices in China jumped the most in 26 years and consumer inflation picked up, Beijing said. Hours later, the U.S. Department of Labor reported that consumer prices climbed at the fastest rate since 1990, outpacing economists’ expectations.

Germany’s council of economic advisers demanded that the European Central Bank explain how it will rein in monetary policy. Inflation in the continent’s pivotal nation will be above the ECB’s target this year and next, the group projected.”


Ray Peloso, Chief Customer Officer at Finvi, brings 25 years of diverse consumer lending experience, having held executive leadership roles at Royal Bank of Scotland, Capital One, Citibank, MBNA and Katabat. Ray’s prior expertise in consumer credit and lending underpins a clear vision and understanding of the challenges faced by our clients in today’s rapidly evolving digital economy.

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