When Rufus "Bud" Reitzel started Troy Finance, a small finance company, in Detroit in 1962, he decided to open a debt-buying arm called Lee Acceptance. There was no debt-buying industry at the time. Nobody even knew of a debt-buying business.
That was 50 years ago. By the time Reitzel retired as Chairman of what had become Asset Acceptance Capital Corp. in 2006, he had helped build debt buying into a $75 billion industry. He long before had earned the nickname "Dean of Debt" after building his firm into an industry leader with several thousand employees in offices nationwide. He took the company public in 2004.
Late last week, Reitzel passed away in Florida at age 78.
Reitzel's start in the debt-buying business was humble. He had noticed something at his finance job while in college at Wayne State University. Every year, a few of the dealers - furniture, appliances and automobiles - would ask around about some old debts they had to sell. His bosses never took the dealers up on the idea, but Reitzel was intrigued.
Six years after starting his business, Reitzel sold Troy Finance to focus on Lee Acceptance, which was making more money. He bought unpaid bills from local grocery stores, appliance outlets and downtown Detroit department stores.
In the '60s, nobody was willing to provide him financing for bad debt. Banks were not involved at all, either in selling debt or financing the buying of debt.
“Banks wouldn’t think of loaning you the money to buy bad paper,” Reitzel told Collections & Credit Risk in 2006.
When he would offer to buy their bad debt, the bankers would deny they had any. He realized bankers were scared of being seen as doing a bad job, unable to collect debt that someone else might be able to collect.
Reitzel eventually started going directly to bank presidents and shareholders, who proved much more responsive than the vice presidents.
In 2004, when Reitzel took Warren, Mich.-based Asset Accpetance public, he told Collections & Credit Risk that he certainly never guessed his small business idea would balloon into a multibillion-dollar industry.
“I can remember when there was only me buying debt," he said.
When he got started, in the early '60s, Reitzel kept his accounts on two-by-four index cards. Collecting involved long Friday afternoons and going door-to-door in Detroit.
“Friday, everyone got paid,” Reitzel told Collections & Credit Risk. “So around 2 o’clock we’d go and knock on doors and say, ‘We’re from Lee Acceptance here to pick up your payment of 5 or 10 dollars.’ It wasn’t always the friendliest. It was kind of scary actually when I think about it now. I was young and brazen. Back then [the business] was called the wild, wild west. It wasn't uncommon at all for people to come into the office with a pistol looking for you.”
The money wasn’t the best, either. “The money we collected would last the weekend,” Reitzel said years later. “Couple packs of cigarettes and order a pizza and that was it.”
His collectors handled about 500 accounts. By the time Reitzel retired in 2006, the number was closer to 5,000.
As the debt-buying industry formed and evolved, Reitzel had earned the respect of his new peers. The following sentiments, told to Collections & Credit Risk at the time of his retirement, sum up how many felt about Reitzel.
“We were in a bar on the intercoastal waterway in Ft. Lauderdale,” recalled Tim Kirkpatrick, president of LoanTrade Inc., a broker based in Boca Raton, Fla. “We made a deal on a paper napkin from the bar, and everybody stuck to that deal. He’s the kind of guy I would have no qualms doing a deal on a paper napkin, and that’s a fact.”
The cocktail napkin sketched a million-and-a-half-dollar deal for a debt portfolio along with a quick close date, and both went smoothly.
“Being an unregulated industry that buys and sells paper, in the early years it attracted folks of all types,” said Walt Collins, founder of debt buyer Collins Financial Inc., now named Precision Recovery Analytics. “Bud was one of the good guys who helped the industry mature into what it is today.”
“Even though we refer to it as an industry, it’s really a niche business. We all know each other, and Bud’s character and his honesty have influenced quite a few of the players," added Tom Ferris, owner of San Diego-based The Sagres Company.
Visitation and services will be held this week at Blount & Curry Funeral Home, 605 S. MacDill Ave., Tampa, Fla.
Friday, October 19, 2012, 4 p.m. to 8 p.m.
Saturday, October 20, 2012, 9:30 a.m. to 11:30 a.m.
Saturday, October 20, 2012, 11:30 a.m.
The family requests that in lieu of flowers, contributions be made in Reitzel’s memory to Tampa General Hospital Foundation, Palliative Care Program, P.O. Box 1289, Tampa, FL 33601.