WASHINGTON—The Conference of State Bank Supervisors (CSBS) has released the newest chapter of its white paper titled "Reengineering Nonbank Supervision.”
The new chapter focuses on debt collection and offers an overview of the collections process, including the history of debt collection, the different types of debt collection entities, the types and volumes of different types of debts in collection, and federal and state supervision and enforcement efforts.
The white paper goes into detail about the different types of consumer debts that are at play, according to CSBS. Citing a 2014 study by the Urban Institute, CSBS states that "roughly 77 million Americans, or about one third of adults, have a debt in collection status." A frequent source of delinquency in debts is either a divorce, an unexpected job loss, or a medical issue.
The types of debts that most frequently find their way to collections are student loans, credit cards, auto finance, mortgage lending, and medical debts.
Student Loan Debt Highlighted
“Student loan debt takes up a whopping portion of the unsecured debt marketplace, followed by credit card debt. The white paper references that secured mortgages account for the largest amount of debt at $11 trillion, but mortgages have a relatively low default rate and don't go into collections as often as the others,” CSBS said.
CSBS noted the white paper specifically calls out—with an entire section dedicated to the issue—student loan debt due to its sheer volume, continued growth, and high rate of delinquency on its own as well as compared to other debts.