#1 – McAllen, Texas

With more than half its residents with debt in collections, McAllen, Texas, has the dubious distinction of being the single most indebted metropolitan area in the U.S, according to the Urban Institute. The organization found that 10.1% of McAllen residents have debt that is past due and that the average debt in collections is $4,106.The reason for the high percentage of accounts in collections is obscure.

Since its founding in 1904, agriculture and agricultural services dominated the town and region until the 1980s when the passage of the North American Free Trade Agreement with Canada and Mexico made the town and surrounding areas an economic hub, according to city-data.com, a website that aggregates statistical data on U.S. metropolitan areas. Now, the McAllen area is one of the fastest growing cities in Texas and.

According to Forbes magazine, the economic growth has fostered a burst of consumer activity. In 2011, even though McAllen ranked 20th in the state in terms of population, it ranked 12th in the state for overall retail sales and third in Texas for retail sales by household and individual consumer.

Federico Castillo, president/CEO of the $45 million South Texas Federal Credit Union in McAllen, said he was not surprised to learn about the high percentage of McAllen residents with accounts in collections, but the distinction would no discourage the cooperative's efforts.

According to March's NCUA data, the latest month that contains peer data, South Texas' ROA was 0.41%, more than double that of its peers, while its delinquency and charge off ratios lagged its peers by roughly a third. In addition, as of June 30, South Texas came in over $103,000 in the black and moved almost $159,000 into reserves.

Castillo attributed the credit union's success to taking a team approach to lending and by not focusing as much on credit scores alone.

"A good score on a thin or short file might hide risks that you might not easily see," he said. "Whereas someone with an overall very solid history might have a lower credit score because of something like job loss that could have happened in the last year."

Instead of looking mainly at scores, Castillo said South Texas focused more on evaluating history when reviewing loan applications along with verifying employment and pricing loans to reflect the risk. The credit union's overall stance was to look at lower score lending as an opportunity not as a risk and to help members learn how to improve their economic lives over time, he explained, adding, "we focus more on the longer view."

#2 – Las Vegas

The municipality has the second highest percentage of accounts in collections with 49.2% of Las Vegas residents having debt in collections and 5.6% having some accounts past due, according to the Urban Institute. The average amount of debt in collections was $7,246.

While some might suppose the city's role as a gambling hub would play a part in the residents' indebtedness, media outlets estimated that the slow-growing economy contributed more to the problem, along with increased competition for tourism dollar from other cities.

With an economy tied largely to casinos visits from tourists, Las Vegas has experienced further stagnation due to the launch of gaming operations in other cities. Further, the city has still not shaken entirely free of the aftereffects of the housing bubble.

Brad Beal, CEO of the $722 million One Nevada in Las Vegas, acknowledged his credit union finds lending in the area a challenge, but the focus has remained on moving forward.

One Nevada's loan to share ratio was nearly 52% at the end of June, according to NCUA data, and the credit union ended the second quarter $3.2 million in the black. Its return on assets was 0.92% for the same period, with a delinquency ratio below at 0.54% and a charge off ratio at 1.67%.

Despite Las Vegas' gambling reputation, Beal stressed the credit union does not pre-judge potential borrowers, instead, choosing to recognize that many of its members and potential members were living with some degree of credit impairment. As a result, One Nevada has seen wide acceptance of its credit building credit card and as well as a checking account aimed at helping people who are blocked from opening checking accounts due to past debts.

"We let them know that their history need not define who they are into the future and if they want a fresh start, we are here to help them find one," Beal said.

Still, he expressed frustration with why so many Las Vegas residents appear to have so little ability to manage their money prudently.

"I have wondered if it's the gambling culture, the performance culture or maybe just working in the tourism industry," Beal said. "But I haven't been able to figure out why so many of our residents have that challenge."

#3 – Columbia, S.C.

There are several economic indicators that suggest why Columbia, South Carolina's capital, might have the third highest percentage or residents with accounts in collections in the nation, according to the Urban Institute. According to the data, 7.3% of Columbia residents have some debt past due and the average balance in collections is $6,416.

Sperling's Best Places, a website that aggregates economic, housing and demographic data from U.S. metropolitan areas, reported Columbia's unemployment rate and job growth was less than the national average in 2013.

In addition, the city's sales and income taxes were higher than the national norm while individual, household, and median family incomes were lower than national averages. According to Best Places, 49.19% of Columbia households had incomes of $40,000 or less while, nationwide, only 38.41% of households had incomes below that threshold.

Hansel Hart, president of the $60 million Palmetto Health in Columbia, said he was surprised to learn how many Columbia residents have accounts in collections. He initially protested that the credit union would not be a good source to talk to since it has a primarily SEG-based field of membership that might shield it from having as many members with collection accounts.

He acknowledged that while many of the credit union's members qualified for membership because of their employment with Palmetto Health system, one of the area's largest employers, some also came from the surrounding Richland County.

"And, it's always worth remembering that not all medical employees are doctors," Hart said. "Some are nursing assistant and all the orderlies and other support staff."

Despite the high degree of indebtedness in Columbia, Hart leads a credit union that is posting strong numbers.

Palmetto Health's loan to share ratio was 64.70%, as of March 31, while its delinquent loan ratio was 0.66%, which was less than its peer's average of 1.03%. The credit union's charge off ratio of 0.39% also came in lower than the peer average of 0.46%. Palmetto Health's ROA was 2.22% as of the end of the first quarter and it ended June at more than $663,000 in the black.

Hart would not speculate on why some many Columbians had accounts in collections, but he stressed Palmetto Health continued to offer all of its members the best possible rate their level of loan risk would allow. He also said the credit union sought to lend to a broad swath of members, as suggested by an average loan yield of 7.63% compared to 5.59% for its peers.

#4 – Jacksonville, Fla.

Even though unemployment in Jacksonville, Fla., is below the national average, it is located in the northern part of the state where the Urban Institute ranked the city as the fifth most indebted area. Forty-five percent of Northern Florida cities' residents have debt in collections, 6.2% are behind on their bills and the average collection balance was $6,331.

According to Sperling's Best Places, a firm that tracks the nation's most affordable cities, Jacksonville's unemployment was less than the national average and job growth was faster than the national average in 2013. However, 42% of the city's household lived on $40,000 per year or less, compared with just over 38% of the nation's population overall.

Kathy Bonaventura, chief lending officer at the $5.2 billion Vystar in Jacksonville, said the credit union's broad reach across17 surrounding counties draws from a cross section of the community.

"We underwrite and approve loans from across the membership," Bonaventure said. "We lend to everyone from A+ paper to E," she added, stressing that careful, but not too restrictive underwriting allows the credit union to preserve its margins while still approving many borrowers.

Vystar posted a return on average assets ratio of 0.97%, which was 17 points above the peer group in March, and posted a loan to share ratio of 75.47%, also slightly above peer with a delinquency ratio of 0.55% and charge off ratio of 0.48%.

Bonaventura said Jacksonville had been working its way back after the Great Recession and efforts had largely, been going well. Now, Vystar tended to see job losses or cutbacks in available hours as among the leading enemies of maintaining loan quality, she noted.

#5 – Memphis, Tenn.

Known as a transportation hub, Memphis is home to some of the nation's leading shipping companies and a manufacturing center, but this was not enough to keep a large proportion of its citizens from winding up with debt in collections.

According to the Urban Institute, 44.9% of Memphis residents have debt in collections with 6.5% owing on some bills and the average balance in collections at $4,707.

Memphis is still transitioning from an economy based largely on different forms of manufacturing, facilitated by the area's transportation networks to one based on a mix of financial services, according to city-data.com.

The city also appeared in a high position on many lists of bankruptcy filings during the Great Recession, but media reports suggested the pace of bankruptcy had slowed and flattened out in parts of the Memphis metropolitan area.

Executives with the $544 million Orion Federal Credit Union in Memphis, said the economic environment in Memphis remained challenging, but credit union has been working to solidly underwrite lending and still make loans. Orion's roughly 58,000 members come from a seven county area that touches on Arkansas, Mississippi and Tennessee, the three states surrounding Memphis. The NCUA has also designated Orion as a low-income credit union.

Stacie Reynolds, director of support services at Orion and Chris Anderson, vice president of lending, said during the Great Recession, the credit union had seen more delinquencies from job losses, but now, late payments tended to come more from unexpected events in the lives of members.

As of March 2014, the latest date for which NCUA peer data is available, Orion's net worth ratio was slightly above that of its peers while ROA lagged somewhat, at 0.52% for the credit union compared to 0.80% for the peer group.

Orion's ratio of delinquent loans to total loans remained significantly higher than its peer group at 2.38%, but was about half of the 4.13% it had been in March of 2013. The ratio of net charged off loans to average loans also came in slightly above peer at 0.51%. At the end of the second quarter, Orion was in the black for this year by $1.4 million.