The Power of Structured Settlements: Driving Recoveries & Managing Risk

We help you develop highly effective settlement programs that recover value from severely delinquent accounts. Our approach prioritizes compliance, avoids reputational risk, and directly aligns with your overarching collections strategy.

Key Components & Design Considerations
We build robust settlement frameworks that include:

• Eligibility Criteria: Define precise settlement thresholds based on charge-off status, balance size, loan type, and historical borrower behavior.
• Offer Logic: Develop tiered offer structures (e.g., percentage of principal) based on days past due or recovery likelihood for optimal results.
• Approval Hierarchy: Set clear approval limits based on agent authority, balance amount, and any deviation from established policy.
• Settlement Types: Structure lump-sum, short-term installment, or post-judgment settlements, adapting to your capacity and borrower context.
• Disclosure & Compliance: Ensure all agreements are meticulously documented, properly signed, and securely stored in strict accordance with FDCPA and Reg F.

Operational Levers & Tools
We operationalize your settlement programs for maximum efficiency and effectiveness:

• Settlement Calculators: Equip agents with intuitive tools to generate compliant offers and accurately document outcomes.
• Campaign Targeting: Build precise outreach lists leveraging settlement propensity models to maximize effectiveness.
• Tracking Systems: Configure systems to automatically flag eligible accounts and maintain a comprehensive history of all offers.
• Post-Settlement Servicing: Ensure credit bureau updates and internal accounting adjustments are accurately and promptly processed.

Why It Matters: Value to the Bank
Strategic settlement programs offer significant benefits:

• Recover Lost Revenue: Recoup otherwise lost funds at a low incremental cost, improving your bottom line.
• Reduce Operational Drag: Minimize the burden of managing low-probability recovery accounts.
• Improve Borrower Outcomes: Facilitate borrower resolution and support credit rehabilitation, fostering goodwill.
• Control Risk: Implement structured and consistent settlement logic to maintain tight program control.

Risks & Controls
We rigorously protect your program by mitigating key risks:

• Prevent Unauthorized Offers: Implement controls to prevent unauthorized or inconsistent settlement offers.
• Audit Compliance: Conduct regular audits to guard against discrimination or UDAAP exposure.
• Ensure Documentation: Maintain meticulous documentation for every agreement and implement post-settlement tracking to prevent re-aging or double collection.

How We Partner to Build It
We partner closely with your strategy, loss mitigation, legal, and compliance teams to build a comprehensive playbook that defines when and how to offer settlements. We co-develop agent tools, campaign strategies, training content, and monitoring reports. This ensures you retain full control and can easily adjust your program based on evolving market conditions.

Why Spinnaker?
We’re former operators, risk leaders, and strategists in the banking industry who’ve been in your shoes. Every consultant on our team has over 10 years of real-world experience leading credit risk, collections, compliance, and analytics functions at banks and fintechs. We have managed through the last recession and the pandemic. We know what works because we've done the work. That’s why our solutions are practical, actionable, and designed to perform in the real world.

Contact us today for an exploratory conversation: Shawn.Sweeney@SpinnakerConsultingGroup.com