Global Debt Registry, an independent debt repository for storing and tracking consumer debt, announced Wednesday it has secured $7 million in Series A funding.

The funding, according to the company, allows GDR to address the needs of collection agencies, large creditors and debt buyers that support and service the $3.4 trillion consumer debt market in the U.S., including credit cards, home equity, auto loans, student loans, medical, utility, telecom and government-related consumer debts.

GDR plans to use the investment to accelerate sales growth and expand operations - including boosting marketing to further penetrate the credit card market and move into new asset classes. The funds also will help strengthen service and support functions.

The funding comes on the heels of a landmark year for the company. GDR reports the year was marked by strong increases in customer traction, including increased demand in new asset classes beyond credit card debt. More media attention also came to the company, including reports in SourceMedia's Bank Technology News, Collections & Credit Risk, American Banker and an article in New York Times Magazine.

The article, first published in late December by Bank Technology News, stated:

Global Debt Registry thinks it can reform the consumer collection industry by replacing ... questionable spreadsheets with a centralized, online clearinghouse of all delinquent consumer debt. It aims to start with charged-off credit card balances and auto loans and eventually encompass all kinds of medical and other debt.

Similar ideas have been kicked around before, but experts interviewed for this story could not name any success stories. Global Debt Registry, under previous ownership, tried to create a database that tracked mortgage ownership but was stymied by the plethora of local land records tied to home loans.

The company says its latest venture, focused on the nonmortgage side of lending, can work. It has already begun building its online database, and it's hoping banks, collections agencies and consumers will contribute to it and use it. The public portion of the site, Debt Lookup, went live last week.

So far, four banks have signed up for the registry, and they use it to track loans they originated (whether they still own them or not) and to obtain "extinguishment reports" that prove a debt has been paid. Global Debt Registry declined to name the four banks or say how much it charges them in monthly fees.

The registry could help banks deal with the Office of the Comptroller of the Currency, the Consumer Financial Protection Bureau and other regulators, which have stiffened their debt-collection rules and put banks on notice that they still have some reputational risk tied to, and responsibility for, debts they no longer own. That responsibility includes being a place borrowers past or present can go to if they have a problem with an existing or closed loan.

Mark Parsells, chairman and CEO of GDR, said when announcing the new funding this week, "The consumer debt market is one of the last major financial asset classes to not utilize a digital registry, leading to inefficiencies, risk, consumer confusion and increasing regulatory scrutiny. This investment is a major milestone in support of our mission to digitally transform the way the financial services industry stores and manages information on charged-off consumer accounts. We are pleased to see growing market support from a variety of sources to take this business to the next level.”

GCA Savvian Advisors, LLC acted as the exclusive financial advisor to the funding round.

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