Greenwise Financial Solutions | Danny Mezzancello | Receivables Roundtable Ep. 141

Adam:
I'm gonna do it.

Danny Mezz:
Okay.

Adam:
Hello everybody, Adam Parks here with another episode of receivables roundtable today I'm here with my longtime friend Danny Mez, who's here to tell us what he's been up to. But before we get to that, Danny, let's start with the basics, right? Can you tell everybody a little bit about yourself and how you get to the seat that you're in today?

Danny Mezz:
Sure, yeah, thanks Adam. Thanks for having me in the first place. It's great to see your face again and I promise I'm not in my basement. It's actually a very cool industrial

Adam:
Ha!

Danny Mezz:
building that I'm in, a co-working space, but you know I'm just looking at that. It looks kind of basement-y. So yes, my tenure in the industry, I joined Resurgent, large debt buyer in 20. Actually, in the compliance department, I helped design and implement our compliance management program. So this is at the peak, you know, of CFPB power. And, you know, really, there just wasn't any room on the front end of the business. We weren't doing much, much at all. In fact, we stopped buying because supply was too low. Obviously economics, you know, cost too high. So that was awesome experience. And I did that for about three years. And then Brian Folaro, my, my long time mentor and friend brought me into the fold acquisitions. So I did that for about seven years. And you know, I was predominantly responsible for developing new business. Resurgent obviously had a tremendous book long before I stepped in that role.

Adam:
Mm-hmm.

Danny Mezz:
All major institutions. So you know, I did air, you know, our first Vintec deal and kind of developed a business. in fintech for ourselves, which we've done really well with and have phenomenal relationships for years now, and some other verticals. I got us into auto, or back into auto I should say, secured bankruptcies, kind of expanded our master servicing portfolio offerings. So a

Adam:
Yeah.

Danny Mezz:
lot of doing... more third party work for other lenders who otherwise don't sell debt or didn't know the value of their debt. So that's kind of brought me to where I am. A couple months ago, at least.

Adam:
Up until the last couple of months, right? Which kind of leads us into where you're going. So I know we've had a couple of conversations over the past couple of months, just kind of very general high level industry discussions, but you've been holding your cards very close to the vest about what you're up to next. So let me ask the question that everybody wants to know. Like Danny, what are you up to? What's going on? What's next?

Danny Mezz:
Yes. Thank you for the question. It feels like I'm important or something. People are wondering what I'm doing. No, I'm just kidding. So, you know, here's the thing. I, and, and so my, my mentor, as I mentioned, Brian Polaro. One of the first things he told me was, and I tell this to my kids too, and that was supposed to kind of get me to trust him because I barely knew him, you know. And he said, you know, pick an industry and stick with it because people don't do that anymore and tenure in an industry brings incredible value to the industry you're serving as well as in your wallet. So I was in debt buying for 10 years, right? And I was in a pretty key role. who started off in collector roles that got all the way up to CEO. And in my mind, and it's a theme I borrowed from GE and their HR policies around organically growing their employees, I took a step back and I said, I'm kind of doing the major debt buying, right? I'm with a great company and I'm on the front end. What else is there kind of within the distressed receivable space that I could do? And

Adam:
Mm.

Danny Mezz:
of course that happened to be timed perfectly with an introduction from a friend of a friend into debt management or debt resolution. People call it all different things. Broadly speaking it's debt relief and then a subgroup of debt relief is the debt resolution or debt management space. I found a wonderful group. that wanted to develop their business development and marketing. So fast forward, I started OmniArm, which is my own consultancy. I've used it for various purposes. Actually started as a distressed real estate buyer on my own, small, obviously very small, but decided to expand that. I can do a bunch of different things with this entity, but of course, being realistic, 90% of my time is really dedicated to one client and that is in the debt management space and I have not actually, you're making me think as we were talking earlier, I haven't disclosed it publicly. That firm is called GreenWise Financial Services and their operating arm is GreenWise Debt Relief.

Adam:
Okay. And so talk like, let's talk a little bit about what that role means. And you know, how does that play into what you were doing previously?

Danny Mezz:
Sure. You know, I think, you know, first off, we all know that this space is blowing up, right? And I say that, you know, in terms of scale, right?

Adam:
Mm-hmm.

Danny Mezz:
It's a tough time for a lot of people. You know, the pre-charge off and charge off accounts are back to, you know, they're normalized since pre-COVID, if not more so. inflation, right, like the dollar is worth 20% less today than it was pre-COVID. And then you've got about 45-50 million Americans who are now struggling with or having to refamiliarize themselves with paying their student loan obligations. So, you know, debt buying, debt management, it's all a big industry. And so to me, you know, looking at what I would say is about $80 billion, that's currently in some adverse status, you know, delinquency or charged off. I'm turning to this company who wants to grow. So the industry is growing already, but where it's not growing is in the lending space and with the original creditors. Right? You know, I think the intention of hiring me was really to like, hey, take this opportunity. And, you know, in my mind, you know, there's some reinventing of the space, but I don't mean that to discredit anyone in the space because... It's more so a perception and I've come to terms with that as a debt buyer in the front end dealing with the bringing on new lenders who have over time evolved their own policies and discovered how there are these debt management companies out there that a lot of their customers are enrolling into and they're trying to figure out more about it. That's been happening for five or six years.

Adam:
Mm-hmm.

Danny Mezz:
But somewhere along the way. Everyone, every other creditor, debt buyer, downstream lender, has actually had phenomenal relationships with the debt management companies and have... you know, engaged into partnerships with them. The lenders have not. And I think what I would like to do in my, you know, stint in this industry and what I feel like could be a forever, you know, industry for me is to kind of resolve those concerns because I think we're just talking past each other to borrow from a term that John Mazzoli used to throw at me a lot. But that's what I think is really happening. I think it's just talking. It's communication versus actual issues And if somewhere in the British retort and say, here are the issues I think I've had, I'd be able to kind of get some clarification to kind of resolve those concerns.

Adam:
So when we talk about debt relief, right? Like obviously that's a really broad category and then you're kind of honing it in. Talk to me a little bit about like the business model behind what you're focused on.

Danny Mezz:
Sure. So, you know, the target consumer for someone in debt relief is obviously someone whose debts are... are putting them into a situation that they can't get themselves out of, which, you know, not only hits them financially, right, but emotionally it impacts every aspect of their life, of their

Adam:
Mm-hmm.

Danny Mezz:
lives. So you know, debt relief could be, it could be in the form of... I guess you could even consider minimum payments on your credit card a form of debt relief, right? Because you're keeping yourself afloat and that's the minimum payment is a relief option in my mind from a credit card company. Then you've got debt consolidation loans, right? That's

Adam:
Mm-hmm.

Danny Mezz:
where the Fintech made their name. And that's a form of debt relief in my mind. They're consolidating their debts. But then you've got where folks are kind of getting too out of control and now they're looking at debt management companies, credit counseling, and ultimately bankruptcy is a main relief option. So I say realistically, a lot of our business is the folks coming from the debt consolidation loan space. And that's again, it's a small subsection of just those folks who ultimately can't get their debts, they've been doing well, but in this economy they're falling behind so much so that it's going to be, you know, adversely impacting their future and, you know, many times has already done so. Right? Or there's just a financial distress event that happens and now their consumers are experiencing hardship and they've had to kind of bypass the initial, the earlier layers of the debt relief space. And now they're looking at kind of a debt management option. That's kind of my take on the industry in my five weeks as an expert here.

Adam:
Completely understood. So should we expect to be seeing you at the standard ARM conferences, kind of bridging the gap between these two worlds?

Danny Mezz:
Yes, yes, absolutely. Great question. I absolutely intend to, you know, the industry and, you know, Adam, as a marketing expert yourself, what I didn't necessarily appreciate early on was debt, debt relief in general, you know, specifically debt management companies rely heavily on advertising. And everyone does today. All the debt buyers do with their digital arms, they're trying to pinpoint data points to bring them to the right people at the right time. It's a good thing, it's a good use of data. So, I didn't necessarily realize how marketing heavy it was and honestly, there's a lot of money spent trying to get in front of the right consumers. Right? And that's the other thing is since 2010 from the FTC's enhanced kind of oversight over the debt management space. You can't collect a dollar until you've established enough in an escrow cap to start making payments on your first debt. So you've spent these marketing dollars trying to find the consumer and then labor and time and overhead trying to establish this escrow to build up to a point where they can start making good on their outstanding debts. And all of those relationships with the debt management companies, the creditors to come to some resolution that makes sense for everybody.

Adam:
I

Danny Mezz:
I think

Adam:
think it's because of the way

Danny Mezz:
it's because

Adam:
that

Danny Mezz:
of the

Adam:
we

Danny Mezz:
lending

Adam:
see it. It's how

Danny Mezz:
space

Adam:
we see it.

Danny Mezz:
being,

Adam:
And I think that's

Danny Mezz:
you know, not

Adam:
a

Danny Mezz:
an

Adam:
lot

Danny Mezz:
active

Adam:
of

Danny Mezz:
participant

Adam:
the questions

Danny Mezz:
directly in the debt management space.

Adam:
that

Danny Mezz:
So yes, I would like to

Adam:
we

Danny Mezz:
be at all

Adam:
have

Danny Mezz:
those conferences

Adam:
about the

Danny Mezz:
and take it more from a lead

Adam:
world.

Danny Mezz:
gen mentality,

Adam:
And I

Danny Mezz:
you

Adam:
think

Danny Mezz:
know, big Vegas

Adam:
that's

Danny Mezz:
conferences

Adam:
a

Danny Mezz:
to

Adam:
lot

Danny Mezz:
more of the

Adam:
of the

Danny Mezz:
going right to the

Adam:
questions

Danny Mezz:
big

Adam:
that

Danny Mezz:
creditors

Adam:
we have

Danny Mezz:
at the big

Adam:
about

Danny Mezz:
arm

Adam:
the

Danny Mezz:
conferences.

Adam:
world.

Danny Mezz:
I think that's an opportunity and I intend to do what I can to help the bridging of that gap. Thanks for watching!

Adam:
So, how do you expect that you're going to spend your kind of day-to-day time, right? It sounds like there's some big lofty forward momentum that you're going after, but what's your day-to-day going to look like?

Danny Mezz:
Yeah, I mean honestly Adam, like at this point I'm playing the new guy card a lot. You know, I'm just, I'm approaching my relationships from, that I developed, you know, while at Resurgence, that's, you know, no secret. The coveted relationships I made there are immediately applicable here, and you know, for entirely unrelated reasons. But I'm talking to them and I'm looking for their input and guidance and just being a quiet kind of a listening listener and figuring out where it would be best worth our time to kind of focus effort on peeling back the layers of the onion and kind of coming to some resolution to bring them into the fold. And then I think it's a matter of, hey, like what we'd like to do is... take your customers or not take, I should take that back. Take someone that you're unable to work with, let us help them

Adam:
So,

Danny Mezz:
rehabilitate their finances, right?

Adam:
I'm going to go

Danny Mezz:
And then return them

Adam:
ahead

Danny Mezz:
back into the main lending stream, right back to that very lender who

Adam:
and

Danny Mezz:
was unfortunately able to assist them not that long prior. That's where I think I'm gonna be able to help.

Adam:
start with the question. I think that makes a lot of sense. Absolutely. Well, very excited to see what you how this all starts to unfold and what you'd come up with next year, Danny, it's always been a pleasure to get to know you through the years, your level of expertise between the creditors. And if you can help to bridge that gap between the debt relief kind of world and that debt collection world and the originating creditor world, I think that could be a really effective mechanism for kind of bridging that gap.

Danny Mezz:
Thanks Adam, I appreciate that especially coming from you. You've had a lot of success yourself in this industry and many peripheral industries. So I appreciate you letting me speak with my... offer my thoughts on what I've learned so far. And I think I do offer a unique perspective because I'm not trained in this industry at all whatsoever. So, you know, you're getting my fresh thoughts, Adam, and I thank you for letting me share them.

Adam:
Well, sometimes one of the best things to be is a problem solver, right? A unique and new set of eyes to come in and understand the critical thinking aspects of breaking down a problem, right? Because sometimes it's about just going and addressing that next problem. So I'm very excited to see what you continue to, uh, to do through the years. Danny, for those of you that are watching,

Danny Mezz:
Thank you.

Adam:
if you guys have additional questions that you'd like to ask, Danny, you can leave those in the comments below. And we'll be responding to those on LinkedIn and YouTube, or if you have additional topics that you'd like to see us discuss. You can leave those in the comments below as well. And I'm willing to bet I can get Danny to come back at least one more time to help me create great content for a great industry. But until next time, Danny, thank you so much for coming on. I really appreciate you.

Danny Mezz:
Likewise, anytime, Adam.

Adam:
Absolutely and everybody watching thank you so much. We'll see you all again soon I'm trying to click pause. We'll see what it does. There we go.

Danny Mezz:
Oh, that's okay. I droned on. I apologize.

Adam:
No, you're good. You did good.

Danny Mezz:
The one part that I will say that

Adam:
It's

Danny Mezz:
will.

Adam:
never easy when you're breaking into something new and you...