Interview: Walt Collins

Q. You’ve had quite an interesting career in finance and securitization. Why did the ARM industry side of debt attract you enough to start Collins Financial?

A. I spent more than 20 years in the securities and investment banking industries. I was very active in securitizing various kinds of receivables, and got involved in the RTC/FDIC disposition of assets in the late 1980s and early 90s. I began to develop an appreciation for the opportunities available in "debt at a discount." But it was clear that the RTC/FDIC play was finite, as the available poll of assets would, at some time, be exhausted.

As that was winding down, I was asked to take a look at the possibilities in charged-off consumer debt. At first, I was unimpressed. How could anyone make money on $2,000-$3,000 accounts? The more I dug in, however, the more the light bulb began to glow. This was an historic economic opportunity, and it was in its infancy. Unlike the commercial assets liquidated by the RTC/FDIC, the supply of consumer debt was effectively infinite, and the amount being sold was growing.

I attempted to get the firm I was then employed by to get into the distressed consumer debt industry, but their vision took them elsewhere. By that time, I was so impassioned with the opportunity, with the implicit risk-reward relationship, that I decided to hang my own shingle. I have never regretted it!

Q. How has the debt purchasing industry changed since you began the company?

A. It has grown! It has also grown up! When I got started, this industry was peopled, in part, by people who had very little in the way of ethics. This problem was compounded by the lack of standardization of term definitions (just what is a "Prime Account?"), and the myriad unresolved contract issues, and more. One of the smartest things I did was to become an early supporter of the Debt Buyers Association, and later the Asset Buyers Program of the ACA. Both of these organizations have done much to bring integrity and standardization to the industry. Another major change is the entry into the industry of major Wall Street players, and others with very deep pockets. Naturally, this has had an impact on pricing and on the level of sophistication of the competitors we all have to face.