What Will 2023 Bring for the ARM Industry? We Asked the Experts.

As 2022 neared its end, we sat down with ARM industry experts and asked them to share their predictions for 2023. Where do they see the industry going? In a climate that will undoubtedly be characterized by changes, how can ARM businesses prepare to best position themselves in this evolving market??

The economy: “When is that point of no-return?”

One of the main topics surfacing in our conversation with industry experts was the macro-economic environment and strong concerns about the implications of the rising level of household debt for the ARM industry in 2023. “Savings rates are at an all-time low, with credit debt at an all-time high. Something has to give here, but unemployment rates are at an all-time low,” commented?Tim Collins, Chief Compliance Officer at InDebted. “The consumer could continue to service their outstanding debt, assuming they do not take on too much debt that tips them past the point of no return for the foreseeable future. It is at some point this breaks, the real question is when?”

?Many of our conversation partners also voiced concern about how to cope with debt that is increasingly difficult to collect with restrained internal resources and low margins on inventories.?

Regulation: “Training and monitoring of consumer-facing employees will be critical”

Looking back on the policy statements made by the CFPB in 2022,?Joann Needleman, Partner and Leader of Clark Hill’s Consumer Financial Services Regulatory & Compliance Group, estimates that “the CFPB’s rulemaking work for debt collection is done. The ‘fun’ part begins with enforcement and supervision and that is where 2023 may be brutal. [...] For those in the ARM industry who collect and report medical debt, intense scrutiny will continue into 2023.” Her advice to collectors is the following: “Training and monitoring of consumer-facing employees will be critical to ensure that an organization is compliant and not engaging in any sort of discrimination or unfair treatment. Technology will support and help the credit and collections industry meet these new and demanding obligations with ease and efficiency, in order to produce the outcomes a regulator wants to see.” Read More