[throwaway201606]

The real issue is reputation risk.

Banks do not want to be in the news because they put someone on the street because of $100 or $500 or $1000 - the reputation cost is just too high.

Further, most banks will not sell debt under a certain amount., they plan for the losses, adjust for it in lending rates and just write off the debt as a loss.

You will see this in their annual statements as provision for credit loss (the planned losses) and net credit losses (actual losses). The amount for large banks is in the hundreds of millions and it is taken as part of the cost of being in the lending business.

There is, of course, some every fluctuating number based on the type of lending and amount, at which debt is pursued with vigor.