Fairbanks Removed from Watch Status.

Fitch Ratings has removed Fairbanks Capital Corp.'s servicer ratings from "rating watch negative" status, where they were placed last October following widely publicized accusations of improper loan servicing and collection practices.

And while Fairbanks reached a settlement regarding those complaints with federal regulators last fall, several states still have outstanding "inquiries" into the Fairbanks case, Fitch noted.

Fitch said Fairbanks is working closely with these remaining states and has established reserves for estimated damages, though it is impossible to predict the financial impact of these unresolved investigations, the rating agency noted in its recent report on Fairbanks. However, Fitch senior director Kathleen Tillwitz said Fairbanks' previous settlements have fallen within its estimated range of costs.

Fitch plans to monitor Fairbanks and conduct another onsite review in six months, at which point Fitch will analyze whether or not any upgrades are warranted.

"At this current time, we are just removing them from negative watch based on all of the changes that they have made," Ms. Tillwitz said. "The process and procedural changes appear to be working."

Fairbanks CEO James Ozanne, in a written statement, said the company is encouraged by the action of Fitch Ratings.

"We have made significant improvements across Fairbanks' loan servicing operations, putting in place what we believe are leading edge practices for the nonprime servicing industry. Through regular reviews, we believe Fitch, and others, will be able to measure the increasingly positive effects of these changes," Mr. Ozanne said.