Not A Great Idea! – Michael Dennis, CBF

Not a Great Idea

Last month, I was invited to attend an industry credit group meeting as a guest / prospective member.  FYI, this group was not part of CMA.  I was also invited to the group’s reception the night before, which is a regularly scheduled event because many attendees fly in for the group meeting the night before.

 During the reception, I was introduced around, but as often happens I hung out for most of the evening with two members.  After the reception, they invited me dinner.  The only reason I declined was that I had filled up on appetizers.

The next morning, I joined my new friends for breakfast, and sat with them for the group meeting.  Soon after the meeting started, I wondered if they worked for competitor companies.  During the first break, I asked that question and I was told:  “Our companies compete.  We don’t.  The only thing we want to accomplish is to reduced bad debts and delinquencies.”

Were they colluding?  Were they doing anything unethical, unlawful or contrary to the credit group’s rules?  Who can say.  However, the amount of time they spent together might cause an impartial observer to wonder whether their discussions ever strayed outside of the lines that define appropriate conduct.  I think each of us should try to avoid even the appearance of impropriety during credit group meetings.

Michael Dennis, MBA, CBF, LCM

Some might say I am being overly cautious, but everyone is entitled to their opinion… and this is mine.  What’s your take on this?

Michael Dennis’ Covering Credit Commentary. Michael’s website is

The opinions presented are those of the author.  The opinions and recommendations do not necessarily reflect the views of CMA, or their Officers and Directors.  Readers are encouraged to evaluate any suggestions or recommendations made, and accept and adopt only those concepts that make sense to them.

6 Replies to “Not A Great Idea! – Michael Dennis, CBF”

  1. Michael,

    I doubt you are anti-credit groups but one might conclude that is the case. If competitors within an industry do not meet and, yes, socialize to gain confidence and trust of each other, we will be reluctant to share information. Without the information, what is the point of the groups? The same position could be taken of the customers we serve. They typically belong to their own industry groups. It is all a form of networking which is considered a standard business technique. I don’t know how you could ever define what constitutes an acceptable level of propriety and what is excessive. We have a relatively small group and we can all share the same table. In this regard we are always sitting with the same competitors. As long as we do not exceed the credit group ethical parameters, I believe all is well.

  2. I understand your caution about the potential “appearance” of collusion. Perhaps your personality is persuading you not to take their statements at face value?

    If I sold Kia’s and you sold Lexus’ to the same dealer how is that competitive? Different consumers have different needs, price points etc. If you compete by over-extending credit to the dealer and he goes under, we both suffer the losses.

    I’m more interested in helping the dealer be successful long term so I can have ongoing sales.

  3. I think I see your point. I used to belong to CMA’s west coast flooring group (sadly, budget cuts forced me to drop out), and I, myself, once ventured too close to disallowed conversation. I didn’t intend to–it wasn’t deliberate–but when you talk to the same people over and over again, you do build up a relationship with them that tends to blur boundaries. Luckily, this happened in a group setting, and I was quickly reminded by one of the other participants that I was getting into muddy waters. If I had been having a one-on-one meeting with one of the members, would that person have also been too caught up in the conversation to realize what we were discussing had crossed the line into unethical behavior? Quite possibly. Industry credit groups are invaluable, and I think it’s wonderful that members can get together and share information, but I also think it’s important to remember that you’re a member of a professional organization, not having a chat with friends.

  4. I agree that this depends on what is being discussed and that requires good judgment. However, when competitors attend receptions, dinner, breakfast and then sit side-by-side at the group meeting there is certainly cause for concern and a reason for the two individuals to exercise special caution about what is discussed.

    BTW, I have been a member of one or more industry credit groups since 1981 and have always maintained friendly relationships with the credit managers from my employer’s competitors.

  5. MCD

    My rule of thumb is never say anything in or out of the group meeting that you would not be comfortable repeating verbatim to my manager and our company’s General Counsel.

  6. Personally I applaud your vigilance Michael. You certainly understand the importance of your industry connections, and I would suggest that your most trusted relationships have been built among your colleagues who consistently uphold professional behavior, 100% of the time.

    As for me, some feel that I’m hyper-vigilant to the point of annoyance at times. Well good! I hope I’m known for that.

    Are there A/T issues in the pipe-line with the possibility of debilitating fines? Possibly, but I can rest easy and only need worry about the damage to the perception of our trade, and not liability for me or my employer.

    Don’t think for a minute that I don’t (within ant-trust guidlienes and the by-laws of my trade group) share historical and factual trade information. But I also do everything I can to maintain the right to do so, to build confidence in our trade groups, and hopefully help prove there is a level of professionalism in our trade.

    I appreciate your message here.

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