The agency charged with cleaning up Japan's banking problems turned a profit collecting bad loans last year.

The Gambia Commercial Development Bank collapsed, largely due to its failure to collect loans.

Help From the Senate The Senate passed a number of amendments last year to help the Government collect defaulted loans.

On the other hand, many of the clients of investigators like Mr. Rapp have been banks seeking to collect delinquent loans.

"Social Security offsets to collect loans over 10 years old constitute an integral part" of the government's collection efforts, the brief said.

The government also collects unpaid loans by withholding tax refunds and taking other government benefits.

Last year bank regulators paid $615 million to law firms for services ranging from prosecuting savings and loan officials to collecting delinquent loans.

The bank also collects fines, loans and interest, and taxes.

Since late 1981 the Administration has wanted to use private agencies to collect delinquent taxes and loans.

Q. What about the Administration's argument that the private sector is much better at collecting loans and managing loan portfolios than Government agencies?