Past due delinquencies and charged off debt reduce a bank or credit union’s net income, and increased delinquencies also increase Allocation for Loan and Lease Losses (ALLL).  ALLL increases take increasing amounts of net income away. Furthermore, bank and credit union collection systems often lack high-end capabilities to handle increasing volumes, forcing the institution to increase FTE’s to keep up. Additional FTE’s increase expenses, further hurting net income. Often, these same systems have no charged-off recovery capabilities, forcing institutions to forego the potential of increasing net income through recovery efforts.