In his latest opinion piece, Bill Bartmann argues that nonprofit organizations could accept donations of consumer debt accounts and use the collections on those accounts to fund their operations. He says the move would help consumers, nonprofits, and banks while hurting the “traditional” collection industry and the attorneys it employs.

The article, “Why Nonprofits Should Be in the Debt Collection Business,” posted Monday on investor site, proposes a special tax credit that would incent banks to donate delinquent consumer credit accounts to nonprofits. The nonprofits would then gently collect on the outstanding balances to fund their other operations.

This new incarnation of Bill Bartmann seems to believe that there is a systemic risk with debt collection: it is almost impossible for a debt collector to not break all the consumer protection laws in pursuit of profit, leading to collection practices that he currently exaggerates and derides.

So wouldn’t the nonprofits then be under pressure to collect at any cost (they need to fund their other operations, after all)?

Hell no. You see, this plan is “genius” (his word).

Qualified nonprofits would be required to provide a range of financial literacy, social services, and job search programs to the consumer with the delinquent loan. They would also be forbidden to charge interest or to use any form of litigation against a consumer. Of course, Bartmann does not address the cost to collect or even how nonprofits would pay, you know, collectors to do the work. Maybe they can outsource all that to third party debt collection agencies!

That’s a silly little detail that would be addressed later on. This isn’t so much a plan as it is a statement piece. We have to do something about debt collectors, debt collector Bill Bartmann says.

“Money corrupts,” he writes unironically, as a one-time self-proclaimed billionaire who published a book in 2009 titled Bailout Riches! How Everyday Investors Can Make a Fortune Buying Bad Loans for Pennies on the Dollar.

So what do we think about all this? I’m interested in hearing some feedback.


Next Article: LiveVox Presents Part II of "A Fireside ...