Would Wall Street be in this mess now if George Butler had been in charge? George Butler was the Credit Manager at AGC Liverpool in the mid eighties. He was a man as famous for his sharp wit as he was his almost unintelligible Scottish accent. When a loan proposal was put in front of him that did not “stack up” he would reject it by pushing it back across his desk and chortling in his thick Scottish brogue “I'll not be paying for that”.
George was my boss's boss when I started at AGC in the “motor collections” department. Everyone started in “collections” back then, because finance companies in those days had a simple philosophy that you could not be trusted to lend money out unless you could first prove that you had developed the skills to get it back again. And it was hoped that after a couple of years of struggling to get money back on the tougher files, you would learn what not to do when it was your turn to write the cheques.
It was a horrible experience trying to collect money from people who should never have been loaned it in the first place. I remember phoning one woman in particular who I was chasing for late car repayments. She told me “I have three potatoes to feed four children and I’m trying to work out who misses out, so f*** off". After phone calls like that, my colleagues and I would shake our heads and ask how anyone could have been stupid enough to sign off on the loan in the first place, and vow never to be that stupid ourselves.
But here is what happened next. As the eighties rolled into the nineties, the “new business” or “acceptance departments” of financial institutions started to fill up people far too clever to ever have to work in the collections departments. As “on the job learning” gave way to “graduate trainee programs”, a stint in collections was reduced from a couple of years to a couple of weeks.
There is next-to-no chance that any of the Wall Street bankers now boxing up their desks and parading past the world’s TV cameras have ever had to try to collect overdue home loan payments from desperate mothers. Perhaps if they had, they too would have pushed daft finance proposals back across their desks, and the financial markets might have avoided this diabolical mess.
This post first appeared in the Business Spectator.
The Cash Flow Ninjas
