The Next Normal: Uncertainty
“The New Normal”: A phrase regurgitated by media and corporation’s ad nauseum. While it’s important to understand and rationalize the now, the “Next Normal” is what your debt collection agency should be focusing on.
Debt collection is complex. Then Covid-19 arrived, setting in motion an ever-evolving patchwork of federal and state regulations.
The New Normal:
2020: The year of hygiene, face masks, and pajama Zoom calls with barking dogs and screaming children in the background. The American workforce has settled into new norms and routines. Legislators have done the same.
Many US states have responded by temporarily amending their collection regulations. (Guidelines are frequently updated and the details we discuss here are based on information available as of August 11th 2020 by the American Collectors Association.) These include:
- District of Columbia – Outbound collection efforts and certain legal actions are prohibited during and 60 days lifting of public health emergency. It has been extended to Oct. 9th 2020.
- Illinois – Chicago has lifted its temporary suspension regarding collections of debts owed to the city
- Maryland – Financial relief order prohibits mortgage lenders from initiating foreclosure.
- New York – collection of state-owned debt is suspended until September 4th ( this could be extended)
- North Carolina – debt owed to state agencies are suspended
The Next Normal:
At the time of writing this publication, the unemployment level is somewhere between 10%-12% (25-30 million people). The longest economic expansion in US history ended in March 2020. Second quarter GDP contracted by 32.9%, hopefully rebounding in the fall. Special unemployment payments have ended and a second stimulus plan is bogged down by politics. It is impossible to predict the future, but it is very possible to envision 2020 ending with a high unemployment rate and low consumer confidence. Looking back at previous recessions gives us insight into possible outcomes.
The next normal could manifest in many ways: broad or targeted legislation for specific industries or individuals, more fiscal stimulus policies, high unemployment, and a tightening of “purse strings”, the possibilities are endless.
Certain patterns develop after economic downturns. A compilation of studies by the University of Rhode Island on the 2008 “Great Recession” showed the following behaviors.
- 68% of respondents reduced their spending
- 40% withdrew from savings and retirement funds to pay bills
- 71% stated they purchased less expensive brands to help make ends meet.
- Almost half reported major difficulties paying monthly expenses and bills
- 63% of families experience wealth loss, a median loss about 18% compared with 2007 levels
- While the “Great Recession” officially ended in 2009, its effects were felt well into the 2010’s
As margins shrink, consumer spending slows, and financial future is uncertain, stability will be in high demand. 46 years of experience, 800+ clients nationwide, and unbeatable customer service. Having an agency with a firm understanding of compliance and regulation paired with the technology to pivot on a dime has never been more important.
Protect Your Bottom Line with CBHV
When the day comes, consider partnering with CBHV and enjoy the benefits of working with a trained, professional collection agency. Give us a call. We bring almost five-decades of experience to debt resolution and can effectively retrieve overdue payments without exposing you to risk.
Additionally, we understand clients will have their own, unique requests. Our experience shows that clients tend to want to be good neighbors. Naturally, this motivation is amplified during a crisis. We expect clients and creditors may ask us to stop collections or adjust how we collect, such as sending letters, but not placing outbound calls. Our over 45 years of experience has given us insights and confidence to handle any account.
While uncertainty will be the theme of the second half of 2020, Assurance will be CBHV’s theme. Assurance that our flexibility and innovation will thrive in this turbulent environment. Assurance that both clients and members alike will be treated with dignity and respect. Assurance that even in the face of adversity, we will use our old-fashioned work ethic coupled with our forward-thinking to excel. Assurance that our business practices and consistency provide our clients with confidence in “The Next Normal”.
Stay safe and remember to wash your hands…