Magazine article American Banker

Fairbanks Using 'External' Advocate for Borrowers

Magazine article American Banker

Fairbanks Using 'External' Advocate for Borrowers

Article excerpt

A little over a year ago Fairbanks Capital Corp., the troubled subprime servicer accused of predatory practices, appointed a consumer ombudsman to investigate customer complaints.

But it soon became to clear to James Ozanne, who became the chief executive in May 2003 after the ouster of top management, that Fairbanks needed an additional check for particularly contentious disputes and hardship cases.

So late last year the Salt Lake City company (which settled a federal investigation of its practices for $40 million in November) started using the National Community Reinvestment Coalition as an external, independent ombudsman.

"It gives us another view onto a troubled consumer's situation," Mr. Ozanne said. "I've always felt it's helpful to have a view that comes from outside the environment we operate in. It's a positive way to make sure we've looked at the issue from every angle."

The nonprofit was an early critic of Fairbanks' old practices. The two organizations have been working on a remedy for about a year. On Thursday, Fairbanks issued a press release touting the results of that relationship: The number of written disputes has fallen "nearly 80% from its peak," and delinquency-related losses have dropped more than 30%.

"We're slowly but surely making progress along the recovery route," Mr. Ozanne said in an interview.

Fairbanks refers customers to the NCRC for counseling when the servicer cannot resolve a complaint, in hardship situations such as a job loss, or when a predatory loan is discovered, he said. …

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