The Case: Business Principals vs. Retail Bank
The Issue: The downturn of the U.S. economy in 2008/2009 stressed the resources of many small business owners. But it’s a fact: when business owners miss payments on a small business loan, those late payments may generally be reported to the consumer credit agencies. As such, late payments will impact the credit scores of the credit principals. In this case, a controversial charge-off for a disputed high dollar amount was reported, and plaintiffs claimed damage to their credit reputations as a result.
Our Approach: The progression of delinquency levels that lead to a charge-off, and their impact on credit score and reputation, were central elements of the analysis. Credit reports and dispute resolution forms showing the progression from minor delinquency to charge-off were reviewed and interpreted, and credit scores and score factors before and after the reported charge-off were analyzed. Credit reports were also reviewed for evidence of other reflections of financial stress, such as late payments on auto loans and mortgages. Finally the role of charge-off amount in credit scoring was described and its impact evaluated. Expert testimony and opinions were provided both in deposition and at jury trial.