21 Equifax, Total System

Solution a welcome relief as delinquencies rise

With bank card delinquencies hitting 5.45 percent of total dollars outstanding, or $26.42 billion, and bankruptcies projected to hit 1.3 million this year after surpassing the one million mark for the first time in 1996, the announcement by Equifax and Total System Services of a joint solution to combat bankruptcy should be welcome. A cynic, however, might note that these companies are capitalizing on a situation they helped create by providing tools to saturate the market with pre-approved credit cards, says Walter Kichenman, senior analyst, Tower Group, Newton, MA.

The alliance integrates Atlanta-based Equifax's Bankruptcy Navigator, a total bankruptcy solution, with Columbus, GA-based TSS's General Cardholder and TS2 Systems card processing to allow automatic updating. This integration is expected to enhance users' decision strategies, queuing, account review and statement inserting capabilities. What's really needed, however, are bankruptcy models that address the trend toward declaring bankruptcy without the usual delinquency period, observes Meridien Research research director Barbara Smiley. By looking at more than credit bureau and borrower data, Equifax appears to be doing just that. For Equifax, the venture opens up sales opportunities; TSS can enhance its offerings with end-to-end credit portfolio management capabilities. Watch for more Equifax products to be added. A.Radding