Celebrating the 20th anniversary of his nonprofit credit counseling company, Steven Trumble enjoys comparing then versus now. In 1991: Just him, a plan and 200 square feet of office space in Waltham. In 2011: 2,300 square feet of humming cubicles in Newton, 150 employees, and about a thousand phone calls a month.
ACCC has now lived through a credit card boom, a period of serious negative publicity for its industry, and most recently, a major wake-up call for a country accustomed to living on credit. And while the past few years have taught some hard lessons to credit-happy Americans, Trumble said, the calls – and the debt – are still climbing.
Steven Trumble
Title: President and CEO, American Consumer Credit Counseling; Newton
Age: 57
Experience: 23 years
Q: So for your clients, is the financial picture looking any better than since the official end of the recession?
A: I put a couple things together for some numbers – in 2009, we took the salary [for our clients who made] between $37,000 and $45,000, and their average debt was $19,000. In 2010, with the same income, the debt is now $23,500.
In 2010, we took over 100,000 calls, and in 2011, we propose to take over 120,000 calls. From ’09 to ’10 the calls we took went up 20 percent. Foreclosures – in 2009, we had 900,000 [nationally]. In Massachusetts, there were 7,710. In 2010, they went from 900,000 to 1.2 million nationally, and in Massachusetts it went to almost 11, 500. That’s an increase of 47 percent.
Q: So is this mostly a result of high unemployment, and the debt just keeps piling up?
A: After 2008 came, people still had their credit cards, and they were able to take cash advances and they were using that, those cash advances and those credit cards, to pay their car payments, pay their mortgage when they get laid off – we see the fear in their face. They’re desperate. And some people are just so frightened, they’ll do anything they can to hang on and hope that job’s going to come next week, or something is going to change next month.
Q: When you started out, were people typically better savers?
A: People were pretty conservative, and they learned to pay themselves first. And that went by the wayside when the credit card explosion came [in the 1990s]. And people weren’t educated on credit cards, they weren’t educated on the interest they would have to pay at the end … And not to get myself in any trouble with the banks, but the banks were issuing credit cards to people, who, let’s put it this way, their credit lines were higher than their income.
Q: In the early 2000s, there were a couple huge scandals involving a few major credit counselors, and Congress got involved. Did you see any blowback from that?
A: It was a disaster for us as an industry… it was a huge black eye. The IRS got involved, and they audited the whole industry. We didn’t think they were going to, or they had the resources or the people to do it, but dammit they did. In 2000, [the industry] had more than 733 credit counseling offices in this country. And now we have less than 300. So in my opinion, they really weeded out a lot of the bad actors. And the IRS doesn’t fool around, they [were auditing] in our office here for almost three years.
Q: So what made you want to get in this business in the first place?
A: Honestly, I was working for a bank a long time ago, making probably $13,000 a year as a teller, and I loved banking, loved money, loved being around it. …And a gentlemen said to me – he was a very old, wise man – he looked at me [holding up a credit card], and he said, “See these? These are going to be the death of this country.” …You know what the first credit card ever issued in this country was? Diner’s Club. First credit card ever. And that was a big thing, to have a Diner’s Club. You go to a restaurant, and put something down without cash or charging on it, it made you feel important. And then from Diners Club, here we are today. And he said, “Figure it out – people are going to have a credit line with these Diner’s Club credit cards, of $1,000. How many people are going to max that out?” So to make a long story short, he said, there’s going to be a future in this, helping people.
Top Five Facts About ACCC:
- The company is licensed to provide counseling in all 50 states, and its call center is open from 8:30 a.m. to midnight.
- It puts on between 750 and 825 free financial education workshops a year, for schools, prisons and specialty group.
- ACCC has counselors dedicated to housing, foreclosure, bankruptcy and reverse mortgages, in addition to general financial counseling.
- Fewer than 20 percent of clients usually qualify for a debt consolidation and dispersal, but ACCC dispersed $145 million in client debt in 2010.
- ACCC has a client service department, a center specifically to help clients with questions or unexpected difficulties after they’ve received counseling.
