Obama Impact on ARM Industry Debatable

Everyone in the United States, and perhaps the world, has asked themselves over the past few days, “What does this new President mean for me?” And while the majority of answers probably equate to something like, “not much,” an industry as politically-charged as the accounts receivable management business has cause to wonder.

Well before the presidential election, insideARM launched its Quarterly ARM Confidence Survey with a question asking executives about the effect the election will have on their businesses. At the time, Obama was leading in the polls.

Only 10.4 percent of collection agency respondents said that the outcome of the 2008 election would have “No effect whatsoever” on their business. In contrast, 33.6 percent said there would be a “Moderate-high effect” with another 3.7 percent claiming they would move to Canada.

(Editor’s note: the full results of the most recent Confidence Survey will be released this week.)

Whether execs will choose to weather the economic storm under president-elect Barack Obama or flee to Canada is still uncertain. But it is clear that the election galvanized attitudes that could cloud the business atmosphere.

But ACA International, the association for credit and collection professionals, came out on the side of level headedness with a pragmatic approach to a new administration.

“We have long known that issues that impact the credit and collection industry need to be supported by members of Congress from either or both parties,” Rozanne Andersen, executive vice president of ACA International, told insideARM. “It underscores a need for us to continue our efforts to build a coalition from both the Democratic side of the isle as well as the Republican side of the isle. I personally have never observed one party to be more or less receptive to our issues.”

Many responses to insideARM’s Confidence Survey did not share, echo Andersen’s sentiment. Emotional feelings collide with hope for a better America as execs shared their perspectives on the 2008 presidential election and its influence on their businesses.

One response passionately expressed, “I am a Republican that is just sick of Bush and his buddies… I will continue to stay a registered Republican but Bush, Cheney have hijacked this country and raped the landscape. The economic conditions are a result of the incompetence of Bush and Cheney.”

Others feel the Obama administration will spell doom for the industry and the economy as a whole:

“The economy will recover unless Obama is elected. If U.S. businesses have to face a tax happy, hostile democratic senate and White House there will be wide-spread negative ramifications.”

While others believe the next president-elect does not necessarily mean change:

“It’s not who wins the election. It’s how changes are implemented that will have an impact.”

With billions of dollars coming from government contracts and the sometimes-oppressive bad press the ARM industry gets, collection professionals can’t help but wonder if a new administration will blindly side with consumers on regulatory matters. Or maybe the industry will be ignored as larger issues – like health care, military action and the economy – take center stage.

At least one analyst thinks there is opportunity in changing of the guard. Kaulkin Ginsberg Analyst Michael Klozotsky told attendants at a recent ACA gathering, “The broad healthcare crisis is deepening and will increase the need for diverse healthcare receivables management solutions. Political change and economic uncertainty can be catalysts for growth and reinvention in the emerging healthcare collections market.”