RMAI 2021 Fall Magazine

Departments Table of Contents

4 President’s Message Published by:
6 RMAI Leadership
8 Federal Legislative & Regulatory Update Receivables Management Association
9 State Legislative & Regulatory Update International (RMAI)
10 Legal Update
1050 Fulton Avenue, Suite 120
Feature Articles Sacramento, CA 95825
Phone: (916) 482-2462
12 The State of the Financial Services Industry: Fax: (916) 482-2760
14 A Q&A Among Associations
16 Five Outsourcing Tips for the ARM Industry Website: www.rmaintl.org
18 Considerations in the Proper Use of Statutes of Editorial: [email protected]
20 Limitations Advertising: [email protected]
22 A Collaborative Conversation about Diversity,
24 Equity & Inclusion (Part One) Copyright © 2021 RMAI.
26 RMAI Award Winner Profiles All Rights Reserved.
28 How the ARM Industry Can Maintain Security
and Compliance While Working from Home Material may not be reproduced in
Financing Debt — Or Is It Debt Financing? whole or in part without written permission.
Collector Training: A Key Component of
Compliance Printed in USA.
Getting Ready for Reg F Checklist Executive Editors
Jan Stieger, cae, cmp, crcp
More... Penny Cunha, crcp
Graphic Designer
7 2022 Annual Conference
39 RMAI 2022 Membership Renewal Cheryl Nelson
42 RMAI Executive Summit 2021 Highlights RMAI Editorial & Social Media Committee
49 RMAI Certified Businesses
51 New RMAI Members Laura Jensen, crcp, Co-Chair
Adam Parks, crcp, Co-Chair
52 Board Elections
52 Industry Award Nominations Smeet Bhatt
Josie Donna
53 RMAI Legislative Fund Contributors Shantanu Ravi Gangal
54 Calendar of Events Katie Head
55 Index of Advertisers Bryton Howell
Nancy Hughes
Cover Photo: The 2021 RMAI Board of Directors Ivan Korotaev
Michael Lamm
Danny Mezzancello
Shannon Miller
Kim Phan
Mark Ravanesi
Amber Russo
Drew Sacher
Jonathan Wall

The opinions expressed in the articles are those of the authors
and do not necessarily reflect the views of RMAI’s board
or staff. RMAI welcomes submissions, however, we cannot
guarantee they will be published. RMAI reserves the right to
edit all submissions.

Fall 2021  RMAI Insights Magazine 3

President’s Message

As I write this, RMAI has just completed two very success- Members took home a grassroots toolkit, with advice, mate-
ful events, in Vermont and Georgia, that reflect our current rials, and guidance to assist them with advocacy efforts on be-
focus and direction on advocacy and coalition building with- half of our industry. We plan to follow up this year’s Atlanta
in the broader financial services industry. Our agenda for Regional Event with a similar event in 2022 in Washington,
2021 has been concentrated on responding to the Hunstein D.C., focused on federal advocacy while still incorporating
decision and emergency legislation in Washington, D.C., as- business networking.
sisting members with the implementation of the new debt
collection rule, and continuing to execute our strategic plan. DeBt collection rule

rmai eXecutiVe summit 2021: Vermont Following industry feedback, the Consumer Financial Pro-
tection Bureau (CFPB) is moving forward with the Novem-
Our 2021 Executive Summit ber 30, 2021, implementation
in beautiful Stowe, Vermont “ of its two final debt collection
attracted a record number of rules updating and moderniz-
attendees, culminating with ing the Fair Debt Collection
an unforgettable Taste of Ver- Practices Act. RMAI contin-
mont event on the picturesque Despite the challenging ues to focus on assisting our
Spruce Peak Village Green. members with operationaliz-
The programming featured regulatory environment, I ing and ensuring compliance
strong panels of originating remain optimistic that 2022 will with Regulation F. RMAI of-
creditors who provided their fers a CFPB Rule and Keynote
perspectives on the market feature an increase of market Bundle which includes six (6)
,,opportunities for our members.
forecast and opportunities recorded education sessions
for our members and finan- from the 2021 Annual Con-
cial service association leaders ference that can assist you in
who shared their views on the finalizing your implementa-
current outlook for financial tion plan and compliance with
service companies. We were the new rules. [https://rmai.
fortunate to be joined by Ver- memberzone.com/eventregis-
mont Attorney General TJ Donovan who stressed the impor- tration/register/261]
tance of continuing to engage and educate our legislatures,
regulators and elected officials on our Receivables Manage-
ment Certification Program and issues that are important to HUNSTEIN response

our membership. We can see how essential our advocacy Following the Hunstein v. Preferred Collection & Mgmt. Servs.
efforts are as we look at the current regulatory landscape in ruling earlier this year that put the industry on the defen-
Washington, D.C. and states like California and New York. sive, RMAI spearheaded a working group with ACA Inter-
I would like to applaud the efforts of our State Legislative national, Consumer Relations Consortium, a coalition of
Fundraising Committee and all who donated, as the Execu- letter vendors, National Creditors Bar Association, and the
tive Summit live experience and virtual silent auctions raised attorneys representing all the aforementioned to file amicus
an impressive more than $50,000 for our legislative fund! briefs in support of the petitioner’s request for an en banc

rmai atlanta regional eVent: rehearing of the case. As this magazine goes to print, we anx-
iously await the decision out of the 11th District on whether
they will rehear the case or better yet, simply vacate the case
aDVocacy & networking in light of more recent decisions contradicting their decision.

Our regional networking event in Atlanta focused on state RMAI has also put together a legal coalition of members and
legislative advocacy and business networking and featured defense counsel that meets monthly to respond to copycat
a keynote by current Georgia Attorney General Chris Carr. lawsuits related to the Hunstein decision.

4  RMAI Insights Magazine  Fall 2021

washington, D.c. emergency rule James Mastriani, CRCP

As a result of your legislative fund contributions, RMAI was President
able to respond promptly to the emergency legislation passed
by the City Council of the District of Columbia to amend Receivables Managament
its debt collection law. The proposed amendments contained Association International
provisions related to pre-charge-off itemization, statutory
penalties, documentation requirements, and call caps that the pandemic, RMAI continues to update the COVID-19
potentially would have been very damaging to the industry. webpage on our newly revamped website with links to all
Again, working with an industry coalition, RMAI success- state actions, advice and links to several federal agencies, as
fully negotiated several of the most egregious prohibitions well as consumer advice. [https://rmaintl.org/covid-19-up-
including eliminating pre-charge-off itemization, clarity on dates/]
the call caps to not include consumer-initiated communica-
tions, eliminating the mandatory penalties, and several other closing thoughts
provisions. There is still work to do with the D.C. Council,
and we will be engaged in the fall as they consider making In 2021, the industry has seen a slow but steady return to
this emergency law permanent. a pre-pandemic normalcy. While the market and regulatory
environment remain a challenge, we continue our pledge to
DeBt sales market work on your behalf, to keep you informed, and to create
business and networking opportunities for all our members.
RMAI remains focused on creating business opportunities Throughout my term as President, I have been consistently
for our members in 2021, in a market where supply has de- impressed and amazed by the support of everyone who con-
clined due to the current macroeconomic environment. Pro- tinues to commit time, energy, and financial support to help
gramming at the Executive Summit focused on increasing RMAI achieve its mission. I look forward to seeing everyone
the availability of portfolios in the market. Our Originating in Las Vegas on February 8-10, 2022, where we will celebrate
Creditor panel at the Summit was a direct byproduct of the our 25th Annual Conference as we continue to work togeth-
Creditor Roundtable we established in 2020. In addition, er as a group to highlight the importance of our industry to
our industry broker panel painted a picture of a bright future the consumer credit ecosystem. Check out the RMAI web-
in 2022 with increasing opportunities for small, midsized, site for more information on Early Registration for the 2022
and larger buyers alike. Association leadership also continues RMAI Annual Conference! [http://rmaintl.org/AC2022]
to participate in industry conferences where we provide ed-
ucation to financial institutions in a variety of different asset Fall 2021  RMAI Insights Magazine 5
classes on the benefits of debt sales. Despite the challenging
regulatory environment, I remain optimistic that 2022 will
feature an increase of market opportunities for our members.

FeDeral aDVocacy in 2021

Our 2021 federal advocacy efforts focus on protecting the
industry from any harmful federal legislative and regulatory
actions under the new administration. We have had produc-
tive dialogue with members of both parties on the Senate
Banking Committee regarding legislative priorities and are
also working to establish relationships with the new admin-
istration’s personnel at the CFPB and Federal Trade Com-
mission.

rmai’s continueD response to
coViD-19

As our industry works its way through the myriad of state and
local legislative and regulatory changes that emerged from

Leadership
Board of Directors

President President Elect Treasurer Secretary Past President
James Mastriani, CRCP Adam Parks, CRCP Anne Thomas, CRCP Jon Mazzoli, CRCP Marian Sangalang, CRCP

Director Director Director Director Director
Mike Colby, CRCP Brett Soldevila, CRCP Brian Williams
Laura Jensen, CRCP Kelly Knepper-Stephens,
CRCP

Committee Chairs & Co-Chairs

BUDGET, FINANCE EDITORIAL & SOCIAL FEDERAL LEGISLATIVE/ MEMBERSHIP
& AUDIT MEDIA REGULATORY Adam Parks, Chair
Anne Thomas, Chair Laura Jensen, Co-Chair Jim Mastriani, Co-Chair Mike Colby, Co-Chair
Adam Parks, Co-Chair Adam Parks, Co-Chair Brett Soldevila, Co-Chair
BYLAWS, POLICIES & EDUCATION Anne Thomas, Co-Chair STATE LEGISLATIVE
PROCEDURES Kelly Knepper-Stephens, Co-Chair FUNDRAISING Laura Jensen, Co-Chair
Jon Mazzoli, Chair Marian Sangalang, Co-Chair Mike Colby, Co-Chair Brian Williams, Co-Chair
ETHICS Jim Mastriani, Co-Chair Jon Mazzoli, Co-Chair
CONFERENCE Jon Mazzoli, Co-Chair Brian Williams, Co-Chair Brett Soldevila, Co-Chair
Jim Mastriani, Co-Chair Brett Soldevila, Co-Chair
Adam Parks, Co-Chair
Marian Sangalang, Co-Chair

Consultants

FEDERAL LEGISLATIVE/ ATTORNEYS GENERAL LEGAL CONSULTANT
REGULATORY COUNSEL CONSULTANT Donald S. Maurice, CRCP
Daniel Crowley Clayton S. Friedman Maurice Wutscher, LLP
K&L Gates Crowell & Moring, LLP

Staff

EXECUTIVE DIRECTOR DEPUTY DIRECTOR GENERAL COUNSEL
Jan Stieger, CAE, CMP, CRCP Penny Cunha, CRCP David E. Reid, J.D., CRCP
916-779-2491 916-779-2494 916-779-2492
[email protected] [email protected] [email protected]

DIRECTOR OF EDUCATION EVENT & SALES COMMUNICATIONS
& ADMINISTRATION DEVELOPMENT MANAGER MANAGER
Shannon Parod, CRCP
916-482-2590 Sylvia Done, CMP Cheryl Nelson
[email protected] 916-779-2497 916-482-2708
[email protected] [email protected]

6  RMAI Insights Magazine  Fall 2021

Fall 2021  RMAI Insights Magazine 7

Federal Legislative & Regulatory Update The Legislative
Sprint and the
Regulatory
Marathon

congress’ anD the cFpB’s receiVaBles management agenDa

In the Spring issue, we dove into the potential receivables pleted the majority of its FDCPA work. However, Chair-
management-related policy proposals the House Financial woman Waters could hold additional hearings and introduce
Services and Senate Banking Committees might put forth, new legislation in 2022 to support Democratic candidates in
and what the Consumer Financial Protection Bureau (CFPB the midterm election.
or Bureau) may pursue under Acting Director Dave Uejio
and Director-Designate Rohit Chopra. As expected, the Fi- In March, the House Financial Services Committee held a
nancial Services Committee reintroduced many of the Fair hearing to consider approximately one dozen FDCPA reform
Debt Collection Practices Act (FDCPA) proposals from the bills.1 These proposals ranged from practical addition-
last session, and Chairwoman Maxine Waters (D-CA) bun- al protections for service members to onerous restrictions
dled many of those bills into an omnibus package that passed on collectors’ ability to communicate with consumers or
the House of Representatives on party lines earlier this year. expansion of the FDCPA to small business debt. In April,
Moreover, since that issue, the Senate has yet to confirm Mr. Chairwoman Waters combined most of those proposals,
Chopra so Acting Director Uejio has remained in place. and others (including an amendment to prohibit collection
Moving forward, we expect Congress’ focus to be on enact- of out-of-statute debts), into one omnibus bill entitled the
ing large, complicated funding measures before the end of “Comprehensive Debt Collection Improvement Act” (H.R.
the year, and then messaging bills during the 2022 campaign 2547). The House of Representatives passed H.R. 2547 by a
season. While new FDCPA provisions may be introduced, vote of 215-207, along party lines, in May.
at this stage, they are most likely to be messaging bills given
the legislative sprint underway. However, there is some risk Among other things, the bill would:
of such provisions being included in any of the several large,
complex packages moving through Congress. • Prohibit collection of out-of-statute debt;
As for the CFPB, we believe the Senate is likely to consid- • Require the CFPB to impose limits on collectors’ elec-
er Mr. Chopra’s nomination this fall. We still expect Mr.
Chopra to re-open the rulemaking process for Regulation F tronic communications with consumers and require
at some point and to increase enforcement of the FDCPA, consumers to opt-into any electronic communication
but he may take those actions over a longer period of time from a collector prior to receiving one;
than some Members of Congress wish. As Mr. Chopra’s ten- • Apply the FDCPA to federal, state, and local govern-
ure could extend into January 2025 (or longer), the CFPB’s ment debt;
agenda will be a marathon, not a sprint. • Prohibit confessions of judgment in small business loans;
• Codify debt buying and apply the FDCPA to debt buy-
congressional agenDa ers; and
• Index FDCPA damages to inflation.
House Financial Services Committee
As of now, the Financial Services Committee may have com- Continued on Page 31
8  RMAI Insights Magazine  Fall 2021 1 Virtual Hearing - Slipping Through the Cracks: Policy Options
to Help America’s Consumer During the Pandemic, House Fi-
nancial Services Subcommittee on Consumer Protection and Fi-
nancial Institutions (Mar. 11, 2021), available at https://financial-
services.house.gov/calendar/eventsingle.aspx?EventID=406266.

New Laws at the State Legislative & Regulatory Update
State Level

rmai impacts a Baker’s DoZen in 2021

With 13 new laws on the books, the 2021 State Legislative 2021 laws enacteD
Session was an unprecedented year based on the sheer num-
ber of bills adopted into law that had moderate to significant Connecticut HB 6372 [Public Act No. 131] – The law
impact on the receivables management industry. In a normal takes effect on October 1, 2021. The law exempts from ex-
pre-pandemic year, the industry was averaging three laws a ecution certain funds in a judgment debtor’s bank account.
year. While we expected a significant spike in laws in the first Specifically, the amount of electronic direct deposits, not to
year of the pandemic, legislation was somewhat stunted due exceed one thousand dollars, that are readily identifiable as
to the number of state legislatures that curtailed their legis- wages, are exempt provided such deposits were made to the
lative sessions, resulting in six laws in 2020. However, by the judgment debtor’s account during a look-back period of two
second year of the pandemic, state legislatures had developed months preceding the date that the execution was served on
ways to operate, and the full impact of pandemic-related leg- the financial institution. [This bill was extensively negotiated
islation was felt with a stunning 13 new laws adopted. by RMAI members and a sister trade association who engaged
While we all may appreciate a “baker’s dozen” when it comes in grassroots advocacy efforts to make the new requirements more
to doughnuts, most of us probably do not have the same manageable for the industry.]
reaction to legislative enactments. However, it is important District of Columbia B 348 [Chapter A24-0169 of the
to keep in mind RMAI was at the table advocating for our Laws of 2021] – The law took effect on September 23,
members through the thick of the legislative battles, resulting 2021. The law will be in effect for 225 days to provide the
in significant legislative victories through bill amendments D.C. City Council the opportunity to adopt permanent leg-
on almost every bill that was signed into law, not to mention islation. The law (and the anticipated permanent legislation)
stopping or killing a number of other pieces of legislation
Backed by RMAI’s State Legislative Committee, grassroot Continued on Page 34
advocacy, and member contributions to the Legislative Fund,
RMAI monitors, tracks, and responds to legislative and regu- Fall 2021  RMAI Insights Magazine 9
latory activity in all 50 states. Through RMAI’s staff, member
volunteers, and paid lobbyists, RMAI is able to educate leg-
islators about the industry and the negative impacts or un-
intended consequences a bill would have on businesses and
consumers. Truly this team effort is what produces RMAI’s
stellar reputation in advocacy and results in such an impres-
sive track record of success year-over-year. RMAI members
should review the following laws and bills as it may impact
their operations:

Legal Update Understanding
Standing and Its
Impact on Litigation
Management

A growing number of federal courts are dismissing cases forfeit some remedy, she likely has no concrete injury and no
brought by consumers because they lack “standing.” And standing to pursue an FDCPA claim in federal court.
that trend has been hastened by the United States Supreme This can also have interesting results that defeat class actions,
Court’s recent decision in TransUnion LLC v. Ramirez, a case as was the case in TransUnion LLC v. Ramirez. There while
involving the federal Fair Credit Reporting Act.1 the plaintiff had standing to pursue certain claims, the pro-
The plaintiffs’ bar has adapted quickly, and more lawsuits are posed class members did not.
being filed in state court as a result.
why FeDeral stanDing issues are
stanDing is a Doctrine oF FeDeral law shiFting cases to state court

The doctrine of standing is derived from Article III of the But if a claim lacks standing in federal court, it still may have
United States Constitution establishing the federal judiciary. life in a state court. After all, standing in federal court con-
Article III places limitations on the cases the federal courts cerns whether a federal court has the Constitutional author-
can hear, so determining whether the court has the constitu- ity to hear a claim. Whether a person has standing in state
tional authority to hear a case is a necessary first step. When court is a question of state law and some states take a very
a person lacks standing in federal court it simply means that liberal approach to standing. For example, the New Jersey
they have no compensable damage or there is nothing that Supreme Court has noted on more than one occasion that
can be remedied by a judgment. It is not, typically, a ruling “unlike the Federal Constitution, there is no express language
on whether the plaintiff had a claim. in New Jersey’s Constitution which confines the exercise of
Let’s look at a case involving a “confusing” letter as an ex- our judicial power to actual cases and controversies” and so,
ample. Not so long ago, federal courts would not question “New Jersey cases have historically taken a much more lib-
whether a plaintiff had standing to assert a violation of the eral approach on the issue of standing than have the federal
federal Fair Debt Collection Practices Act arising from a cases.”2
debt collector’s allegedly “confusing” letter. A court (or jury) And so, to avoid dismissal for lack of standing in federal
would ultimately decide whether the letter was confusing. court, more and more FDCPA and other federal consumer
The evolution of federal standing over the past five years now protection claims are being filed in state courts. Even cases
results in courts first asking whether the plaintiff suffered dismissed in federal court for lack of standing are being re-
damage from the confusing letter. The plaintiff must demon- filed in state courts.
strate a “concrete and particularized injury in fact,” meaning,
the recipient of the letter herself must have been confused 1 TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021).
and it caused her a “real injury” and not something abstract 2 Crescent Park Tenants Asso. v. Realty Equities Corp., 58 N.J. 98,
or speculative. So, for example, if the plaintiff did not allege 107, 275 A.2d 433, 437 (1971)
that the confusing letter caused her to make a payment or

10  RMAI Insights Magazine  Fall 2021

a statutory Violation can sometimes “Cases litigated in federal court
conFer stanDing can be managed somewhat
similarly largely because the
Sometimes the necessary “harm” for federal standing can rules of procedure and evidence
come from a mere statutory violation. A statutory violation apply throughout the federal
can be a concrete harm if it bears “a close historical or com- court system with only minor
mon-law analogue for their asserted injury.”3 In cases of these ,,deviations. The same is not true
“intangible” harms, a plaintiff “need not allege any additional for state court litigation.
harm beyond the one Congress has identified.”4 This was the
avenue adopted by the Eleventh Circuit Court of Appeals Telephonic (and now video) conferences are the norm in fed-
in Hunstein5 when it held a consumer had standing to sue eral court, but not all state courts are so accommodating. And
for a violation of FDCPA section 1692c(b) based solely on if in-person appearances are required, a federal court might
a debt collector’s transmission of the plaintiff’s information schedule a handful of cases for conferences. A state court in a
to a letter vendor. These “intangible harm” claims are not large city could have hundreds of matters scheduled that day.
well-settled and there is already a division among district Ask any attorney who has appeared in a New York City civil
courts outside the Eleventh Circuit on the harm occasioned court, and they will agree that a status conference that would
by a debt collector’s use of a letter vendor. One federal judge require an hour in federal court, may take an entire day in
in the Eastern District of New York found no federal stand- Brooklyn as attorneys wait for their cases to be called.
ing for Hunstein claims.6 Days later, two federal judges in the
Northern District of Illinois found the same conduct suffi- But not all state courts move at glacial paces. Litigation can
cient to confer standing.7 be dangerously fast in state small claims court. In many in-
As to Hunstein itself, the debt collector there petitioned the stances, cases brought in a small claims court can only be
Eleventh Circuit to rehear the decision, and a good part of disposed of by trial or settlement – motion practice is pro-
the petition questions the plaintiff’s standing to pursue the hibited. And the trial dates can be swift in small claims court,
claim in federal court. The Receivables Management Asso- sometimes less than 90 days from the filing of the complaint.
ciation International filed a brief supporting the request for And, you must sit through the other cases on trial that day
rehearing. As I write this article, the Eleventh Circuit has not as well. For these reasons alone, cases filed in state court are
ruled on the petition. removed to federal court by defendants. But if there is no
standing under federal law, the case will soon be back in the
impact on litigation management state courts.
Continued on Page 36
There are benefits from the shift to state courts that will serve
to reduce the overall number of cases. Some states limit or 3 TransUnion LLC v. Ramirez, 141 S. Ct. at 2204. See also,
even prohibit certain class action cases. Plaintiffs’ law firms Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1549 (2016) (“intangible
that file claims nationwide largely can do so because they harm has a close relationship to a harm that has traditionally
have admissions to federal courts. They often do not have been regarded as providing a basis for a lawsuit in English or
attorneys admitted to practice in the state courts within those American courts.”).
federal districts. And, because state courts usually take longer 4 Spokeo, Inc. v. Robins, 136 S. Ct. at 1549.
to process cases, it may not be worth the wait for a plaintiff’s 5 Hunstein v. Preferred Collection & Mgmt. Servs., 994 F.3d 1341,
attorney to file in the first place. 1348-1349 (11th Cir. 2021) (styling the harm as an intangible
But there are several disadvantages which increase the com- but concrete injury.).
plexity of litigation management. Cases litigated in federal 6 In re FDCPA Mailing Vendor Cases, Civil Action No. 21-2312,
court can be managed somewhat similarly largely because the 2021 U.S. Dist. LEXIS 139848 (E.D.N.Y. July 23, 2021).
rules of procedure and evidence apply throughout the federal 7 omas v. Uni n, Inc., No. 21-cv-3037, 2021 U.S. Dist. LEXIS
court system with only minor deviations. The same is not 157814 (N.D. Ill. Aug. 20, 2021); Keller v. Northstar Location
true for state court litigation. The rules of evidence and pro- Servs., No. 21-cv-3389, 2021 U.S. Dist. LEXIS 157820 (N.D. Ill.
cedure not only differ from state to state, but they can also Aug. 20, 2021).
differ between the various court divisions within a state. And
state court litigation can be more expensive, often because
they require numerous in-person appearances for status con-
ferences or to set (and often reset) discovery and trial dates.

Fall 2021  RMAI Insights Magazine 11

The State of the Financial Services Industry:

A Q&A Among Associations

RMAI plays an integral role in the larger financial services eco- institution in dealing with the pandemic — continuing op-
system and cultivates relationships with specialty asset classes to erations safely to get that much needed help out the door and
expand business opportunities for members. To that end, RMAI into communities, and to do it quickly.
invited executives from several associations to share their views What items in Reg F will have the most significant impact
on the current environment, their members’ forecast for the next on your members? We are concerned about the impacts on
year, and “what keeps them up at night.” RMAI Executive Sum- third-party collectors and thus the impacts on the debt mar-
mit 2021 attendees rated the State of the Financial Services Indus- ket overall and on banks’ ability to recover and collect. We’re
try association panel one of the top education sessions presented. also concerned about the legal and compliance risks created
To enable all RMAI members to benefit from the perspectives of by Regulation F’s implementation of the FDCPA, particu-
the panel, we invited the executives to participate in our Q&A. larly in states that extend the FDCPA to first party creditors
— it creates a lot of operational complexity and uncertainty,
Diana Banks especially for banks with customers in different states.

Vice President & Senior Counsel celia winslow
American Bankers Association
(ABA) Senior Vice President, American
Can you please give a brief overview Financial Services Association
of your organization and characterize your membership (AFSA)
base? The American Bankers Association is the voice of the
nation’s $22.5 trillion banking industry, which is composed Can you please give a brief overview of your organiza-
of small, regional, and large banks that together employ more tion and characterize your membership base? Founded in
than 2 million people, safeguard $18 trillion in deposits and 1916, the American Financial Services Association (AFSA)
extend nearly $11 trillion in loans. ABA supports and advo- is the national trade association for the consumer credit in-
cates for policies that permit banks to serve their communities dustry, protecting access to credit and consumer choice. Our
and their customers, and we stand behind America’s banks as 400+ members include consumer and commercial finance
they continue to help their customers and communities and companies, motor vehicle sales finance and leasing compa-
support the nation’s economic recovery from the COVID-19 nies, mortgage lenders, mortgage servicers, credit card issu-
pandemic. ABA also provides a wide suite of training, cer- ers, industrial banks, and industry suppliers.
tifications, and events designed to support banking careers. What have been the biggest challenges for your members
What have been the biggest challenges for your members due to the COVID pandemic? Besides the general challeng-
due to the COVID pandemic? Our banks have been the es of living and working through a pandemic, some of the
economic first responders of the pandemic, serving as a pri- biggest challenges that are specific to the consumer credit in-
mary delivery conduit for the Paycheck Protection Program dustry have been: (1) getting permission from regulators to
as well as economic stimulus payments. Our members faced allow employees to work from home, (2) repossession bans,
the same challenges as every other American business and and (3) the Paycheck Protection Program (PPP).
12  RMAI Insights Magazine  Fall 2021

On the first point, AFSA worked with regulators to permit Francis creighton
member employees to work from home where possible, as
long as consumer protections are in place. We are pleased President & CEO
that many regulators made this change on their own, and Consumer Data Industry
so far, one state (Texas) has passed the AFSA Model Act on Association (CDIA)
work from home.
On the second point, we are proud that our industry—across Can you please give a brief overview of your organiza-
the board and without any coordination with one anoth- tion and characterize your membership base? CDIA is
er—independently decided not to repossess vehicles during the voice of the consumer reporting industry, representing
the first several months of the pandemic. However, we are consumer reporting agencies including the nationwide credit
concerned with how long some repossession bans lasted and bureaus, regional and specialized credit bureaus, background
whether they will ever be reinstituted because ultimately, we check companies, and others.
believe they are bad for consumers and unconstitutional. What have been the biggest challenges for your mem-
And lastly, as businesses that were declared essential and faced bers due to the COVID pandemic? Helping our member
the same uncertainty as other industries in the beginning of companies manage changing standards on how to accurately
the pandemic, many small finance companies got PPP loans. report given changes in the law. The economic dislocation
Now however, the Small Business Administration (SBA) is has also led to increasing legislative efforts to make credit
retroactively saying that they were not qualified for the pro- reporting less accurate by banning the reporting of certain
gram and insisting that these loans be paid back. kinds of information.
What kinds of pandemic restrictions are your members What kinds of pandemic restrictions are your members
most concerned about becoming permanent and/or hav- most concerned about becoming permanent and/or hav-
ing a long-term impact on their businesses? Repossession ing a long-term impact on their businesses? Efforts to sup-
bans. We’re concerned that every time there is an emergency, press negative data would be a major problem for the entire
the new protocol will be to prohibit repossessions. We are consumer reporting ecosystem.
also concerned about the precedent of potentially prohibit- What items in Reg F will have the most significant impact
ing accurate credit reporting during an emergency. on your members? The consumer reporting industry shares
What items in Reg F will have the most significant impact concerns about Reg F, but the impact will most likely be on
on your members? The contact restrictions. the furnishers and users of data, not the reporting industry
What items are of most significance at the Federal reg- itself.
ulatory level for your members currently? Rate caps and What items are of most significance at the Federal reg-
regulation by enforcement. ulatory level for your members currently? Proposals to
How do your organizations monitor, prioritize and advo- establish a government run credit bureau, proposals to su-
cate for State level regulatory issues? AFSA has a 50-state per-charge to credit repair industry, proposals that would sig-
tracking system free for all members that tracks more than nificantly increase record-keeping obligations without com-
17,000 bills and regulations every biennial session. Through mensurate benefits to consumers.
our very active State Government Affairs Committee—600 How do your organizations monitor, prioritize and ad-
member company representatives are on the committee—we vocate for State level regulatory issues? We have a strong
prioritize issues in the traditional installment lending, vehicle state-level lobbying team led by Eric J. Ellman. We have a
finance, mortgage lending/servicing, and credit card space. network of lobbyists in state capitals across the country. We
We comment on dozens of bills and regulations each year also use Stateside Associates to help us in our monitoring of
and testify in state legislatures across the country according state-level consumer reporting and public records legislation.
to member need. We develop policy consensus and produce What do you believe poses the biggest challenge for your
countless talking points, issue briefs, fact sheets, and month- membership in the next 12-18 months? A severe break-
ly white papers on state consumer credit issues. down in a particular market when the COVID-related mor-
What do you believe poses the biggest challenge for your atoria end. For example, when student lending ramps back
membership in the next 12-18 months? Rate caps, regu- up in the new year, will servicers have the capacity to respond
lation by enforcement, and regulations that impose unnec- to the expected scale of borrower contacts; if not, will a num-
essary restrictions that will ultimately harm our customers. ber of borrowers not be able to make their loan payment

Continued on Page 50

Fall 2021  RMAI Insights Magazine 13

Five Outsourcing Tips for the
ARM Industry

By Michael Bevel, Stefanie Jackman and Kim Phan

When RMAI members outsource their collection process, 1) haVe a Due Diligence checklist
both parties in such arrangements are at risk. Financial insti-
tutions looking to outsource a process – for instance, when a This list should not focus on business considerations, such as
debt buyer wants to outsource its collections activity – must profitability and expenses (though those are important, too),
consider the potential compliance risks presented by any but should assist to determine potential compliance risks.
service provider. To regulators, and consumers to the extent • Case law searches. You should understand what litiga-
there is a private right of action, any violation by a service
provider could be attributed to the financial institution. tion has been filed by or filed against any potential ser-
This is why vendor management and vendor oversight pro- vice provider. When analyzing the results, you will want
cesses are so incredibly important in these relationships. to pay as much attention to cases where the potential
Knowing who you’re going to onboard before you onboard vendor “wins” as you do to the ones where the potential
them is essential in ensuring an easy, compliant, and positive vendor is found at fault. Why? Because knowing how the
experience when onboarding a collection agency. Better to case was decided in their favor gives you good informa-
find out during due diligence than during the lawsuit that a tion. Did they win because the plaintiff’s claim was fac-
collection agency does not understand the difference between tually incorrect? Or did they win on a technicality where
the FCRA and METRO 2 or that the collection agency does the bad process is visible in the case law, but the plaintiff
not understand what technologies constitute an autodialer. was not able to prove standing or harm? If it is the latter,
While both sides of the business process outsourcing equa- this insight can be just as valuable as cases where the de-
tion are at risk, establishing an onboarding process for service fendant was found to be at fault.
providers can catch potential problems before any contract is An additional search to consider adding is frequent filers
signed. Researching a company thoroughly is a time invest- and active/robust consumer attorneys. This is all part of
ment, but provides critical insights. You will either find that putting data into context. If the suits are all from a no-
the service provider is likely to be a solid business partner, or torious firm in the industry, that should be taken into
you will avoid partnering with a service provider that could consideration. If the same plaintiff shows up frequently,
directly affect your company’s own compliance profile. that is also information worth noting.
Below are five tips that RMAI members can use to help miti- • Policy & procedure reviews. You will likely want to re-
gate the risks involved with outsourcing to a collection agen- view all of these that are pertinent to your business – call
cy. Collection agencies would also benefit from proactively frequency, dispute investigation, credit reporting, etc.
assessing these practices so that they can properly respond Use the documents to develop interview questions with
when being considered as a service provider by a debt buyer. the relevant staff that will be working on your account.
Ask for examples of where a policy proactively worked
14  RMAI Insights Magazine  Fall 2021 (i.e., because the policy was in place and followed, the

vendor was able to act in its own and the consumer’s best “ It is the kinds of suits and
interest) as well as for examples where a policy mitigated complaints, rather than the
consequences (e.g., in cases where employee error led to ,,volume of suits and complaints,
an infraction, but citing to the company policy was ben- that you want to focus on.
eficial to the vendor).
clause if you cannot provide the full complement of data re-
• Regulatory searches. Search for the company on the quired for the collection agency to compliantly (and legal-
CFPB’s website, on the FTC’s website, on the Better ly) perform this function. On the other hand, if a potential
Business Bureau’s site, and websites for relevant state at- vendor pushes back on the record retention requirement or
torneys general or other state departments of consumer wants to limit your right to monitor or audit, then this is a
protection. clue that there may be a compliance gap that requires more
understanding, investigation, and negotiating.
2) make sure the right person is in the
right seat 4) Don’t pay attention to the wrong things

Even if a vendor satisfies each item on your checklist, if you When you are investigating a company to onboard, and you
do not have a detail-oriented person assigned by the vendor pull PACER records and CFPB complaints, you do not want
to manage your relationship, your checklist is not going to to mistake quantity for quality. Seeing a lot of results from
help at all. The person in this seat is someone who is not a company search is certainly something to investigate; it is
easily distracted, manages time efficiently, understands the also something not necessarily indicative of a bad actor.
potential risks associated with the transaction, and is com- Larger agencies, and those working high volumes, are, just
pliance oriented. Traditionally, individuals who take on by the nature of the business we are in, going to have more
these functions may be ignored because they are perceived PACER hits and results from a CFPB or FTC search. Again,
as non-revenue-generating. However, this person can and it is the kinds of suits and complaints, rather than the volume
does directly and critically affect revenue. If you partner with of suits and complaints, that you want to focus on.
the wrong collection agency, or the wrong person at the col- This is also your opportunity to sort these results based on
lection agency, your company is at risk of being exposed to the type of paper you are looking to have worked by an out-
more lawsuits and regulatory attention. sourced agency. Some debt types garner more attention than
others with litigants and regulators. Others may give rise to
3)reQuire speciFic proVisions in all your more issues in attempting to pin down dates for validation
VenDor contracts (anD stick to them) letters or other legal requirements but remained somewhat
under the regulatory radar to date. In such instances, adjust
It is possible to have a solid due diligence checklist and an the weight accorded to your search results to align with your
amazingly detail-oriented employee at the head of the pro- expectations for litigation and regulatory attention. While
cess and still wind up with a vendor that puts your company there may only be a handful of complaints or suits, if all of
at risk. However, a solid contract with your outsourcing ven- those complaints and suits point to a pattern of non-com-
dor can be a safety net. Make sure your contract contains: pliance, even just a handful may be indicative of underlying
• Explicit provisions requiring adherence to all applicable areas that need attention, particularly if involving debts that
historically have stayed somewhat under the regulatory radar.
laws and regulations; When you pull data from PACER (lawsuits), the CFPB (con-
• Rights to monitor, audit, and recall accounts for compli- sent orders, complaints/disputes), the BBB (complaints), and
the FTC (consent orders and complaints), make sure you are
ance issues at any time; interpreting the content, and not just the quantity.
• Record-retention requirements;
• Compliance expectations for any of your vendor’s sub- Continued on Page 38

contractors; and Fall 2021  RMAI Insights Magazine 15
• An indemnity clause.
In addition to these contractual protections, negotiating the
contract may also give you important insights into the ven-
dor. If the vendor is pushing back on a particular provision,
make sure you understand why they are pushing back. In
some cases, there may be legitimate business reasons, and
the negotiations make sense. For example, with respect to
the validation notice requirements in Regulation F, a collec-
tion agency may understandably push back on an indemnity

Considerations in the
Proper Use of
Statutes of Limitations

By Jessica Lamoreux

Calculating the statute of limitations on a collection file has statute period. Although the population size may be small,
become increasingly complicated over the past few years. keep this “rule arbitrage” in mind when considering debt that
Many people mistakenly believe that these calculations are is marked “out of statute”.
black and white— like a mathematical calculation—with a Back to procedural considerations: some states consider the
single distinct answer for each problem. That’s simply not statute of limitations to be a matter of procedural law and,
true. Here is a quick primer on the issue. Please note that therefore, not covered by a simple choice of law clause. If the
these issues are rife with nuance and often reasonable minds underlying contract does not specifically state that the choice
can disagree. of law encompasses statutes of limitations, you may need to
Is there a choice of law provision? First, look at whether look at your forum state’s laws regarding choice of law con-
the account is based on a written agreement and specifically tract language to determine whether the contract language is
whether that written agreement has a choice of law provision. effective as to statute of limitations questions.
If there is no choice of law provision, move on. At this point, you can determine the state which law will
Is the choice of law provision effective? If the contract does establish the applicable statute of limitations.
have a choice of law provision, you may need to dig a little What’s your cause of action? After determining which state
deeper to determine whether the choice of law applies to the law applies, the next issue to consider is the nature of the
statute of limitations. For this analysis, you will need to look claim to be asserted. Depending on whether a debt is se-
at the law of the forum state, not the choice-of-law state. cured, based on a written contract, an account stated, etc.,
For debt collection litigation the “forum state” is the state the cause(s) of action you intend to assert may be subject to
in which the consumer lives and, therefore, the state where different statutes of limitations. Each state creates statute of
the lawsuit will be initiated. (Note: initiated does not mean limitations in different ways; some are generic while others
filed, as many serve-first states calculate statutes of limitation are very specific to the cause of action. In the “specific” states
using the date of service and not the date of filing.) As con- it’s critical that clients and attorneys work together to under-
sumers can move between states and many states have a wide stand the nature of the underlying obligations, how those
range of applicable statute of limitations periods, it is entire- obligations fit into the state’s statute of limitations frame-
ly possible that a consumer can move into—or out of—the
16  RMAI Insights Magazine  Fall 2021

work, and the data elements that will allow for proper cate- Let’s triumph
gorization of inventory into the proper statute of limitations together.
category for accurate calculation.
What’s the accrual date? Once the proper state and statute Fast, fair and flexible funding
period have been established, the next challenge is to deter-
mine when the applicable statute period started for each ac- wwwF.alFl 2L02O1  CRMKAIFInisnighatsnMcageazi.nce o1m7
count or matter. To do this, you must establish the accrual
date, which will again require that you turn to the applicable
state law to identify the proper date to use as the accrual date.
There are two common potential landmines in the accrual
date determination - date of default and date of last payment.
In different states, the date of default may be treated as the
date of the first default or the date of the last default. Similar-
ly, the applicable statute may define default differently than
a creditor does.

“ Understanding and applying
a borrowing statute depends
almost entirely on properly
understanding how the
applicable case law identifies the
,,state from which to borrow.

For last payment dates, you may also see distinctions between
creditor definitions and statutory definitions. Statutes of lim-
itations typically run from the date of the last voluntary pay-
ment, for example. After receiving the proceeds of a sale on
a repossessed vehicle, however, a creditor may apply those
proceeds to the account as a payment whether the reposses-
sion was voluntary or not. If the repossession is involuntary,
the proceeds from the sale are not a voluntary payment and
therefore that payment will not be considered a last payment
for statute of limitations calculations.
For retail installment sales contracts, each missed payment
may be a separate accrual date. If, for example, a contract
called for monthly installments over a five-year period, you
may end up in a situation where some of those payments
are time-barred because their due date falls outside the stat-
ute of limitations. Payments due more recently may still be
recoverable, although you will want to review the account
thoroughly to determine whether the balance was accelerat-
ed for non-payment and whether the acceleration happened
outside the statute of limitations, potentially time-barring
the full balance.

Continued on Page 47

A Collaborative Conversation about
Diversity, Equity & Inclusion

Part One

Members of the Diversity, Equity & Inclusion Task Force to economic freedom for our consumers. We are proud to
share their own experiences, practical examples, and insights to be part of a global organization that cares, finds a better way,
empower member companies to create an inclusive culture. and values inclusion and collaboration.
Q: How do different cultural approaches to business
interaction in the workplace affect your company? Angela DiCenso
Strategic Account Manager
Fred Booker LexisNexis Risk Solutions (AD)
Senior Channel Account Manager Organizations with inclusive cultures
Digital Recognition Network (FB) are six times more innovative and eight
Adding “Inclusive” to our values is a crit- times more likely to have better business outcomes. There-
ical step to achieving success in DE&I. fore, at LexisNexis Risk Solutions Group we offer 35 employ-
This deliberate and intentional decision not only emphasiz- ee resource groups (ERGs) that share, celebrate, educate, and
es our commitment to fostering an inclusive culture where provide allyship for a variety of cultural backgrounds, as well
fairness and belonging are core to our business, but also fur- as help to understand and better support underrepresented
thers our goal of sustaining a diverse workforce and putting groups. Our employees receive two days paid hours annually
in place equitable practices that ensure we all feel empowered to attend and work with our ERGs and can join whichever
to support our customers, communities, and each other. We ERG they choose.
all play a role in listening, understanding, and taking actions Q: How does your company observe holidays?
that ensure our company is a fair and equitable environment Brandon Lane
where everyone feels empowered to bring their authentic self VP of Performance Management &
to work each day and where everyone who steps through our Client Engagement
doors feels a sense of belonging. Because it’s only when every First Credit Services (BL)
employee feels they belong that together we can rise to our National days, international holidays as
full potential. well as domestic holidays are celebrated across sites. We share
Sarah Cosgrave pictures company wide, organize food for the event and dec-
Managing Vice President of Business orate to ensure there is uniformity across sites regardless of
Development location. We publish everything on the company share point
Midland Credit Management (SC) site and often make a video collage of the events and share
In 2020 we launched an initiative to un- them across the company. A good example would be Di-
derstand our collective company culture and gain perspective wali, which is a festival in Indian culture. This is celebrated
of our shared values. What we found is that we are more both in India and domestically. Participants across sites dress
similar than different when it comes to our core values. This up, use face paint, play games, and eat when time permits
process shaped the current Mission, Vision, and Values for during their shift or at lunch. The pictures are then shared or
the company, creating a shared purpose that drives our em- streamed on video in all three offices.
ployees and the organization forward by creating pathways
18  RMAI Insights Magazine  Fall 2021

Global PRIDE Run with LexisNexis Q: How does your company overcome the impact of
SC: Holidays are a time for our employees to come togeth- language barriers?
er to create memories and celebrate meaningful cultures and FB: Over decades, more and more companies have gone
traditions. No matter where a person lives, holidays tend to global. Even though most of our global employees can speak
bring people together in spirit and in joy. However, which English, it is not their primary language. So being patient
particular holidays people celebrate tend to vary by geogra- and understanding, as some may not be as proficient as oth-
phy. We have tried to change that by bringing celebrations ers, is always encouraged. This thought process has not al-
alive across locations. Through our Diversity and Inclusion ways been practiced and therefore is exclusionary by its na-
program, a group of employees focus each year on identify- ture. It is important to use language that creates an inclusive
ing cultural celebrations and holidays the company can high- environment where everyone feels welcome without mock-
light and observe together as one. Through a combination ing or condescending language. Additionally, terminology
of in-person activities (when in the office), emails featuring to describe things and create a common understanding may
educational information, employee stories, and videos, and become outdated. We must ensure this terminology evolves
LinkedIn posts, we aim to build awareness and educate em- over the years. We have developed, and continue to crowd-
ployees of the traditions, history, and importance of holidays source across our employees, a comprehensive list of non-in-
celebrated across our cultures. Most importantly, doing this clusive technical terminology along with recommended ac-
has created a true bonding experience for employees thou- ceptable alternatives.
sands of miles apart in distance. We also offer floating hol- SC: All our employees share a common language (English),
idays to allow employees to observe the holidays that are but many are multi-lingual. While common language is not
meaningful to them, in addition to company designated paid a challenge, there are other cultural norms and communi-
holidays that differ by location. cation styles that can bring new opportunities for collabo-
AD: We think it’s important to reflect the fact that we are ration. As part of our ongoing work in diversity and inclu-
a global organization with offices around the world by cel- sion, we are consistently focused on building our collective
ebrating global holidays and acknowledging days of aware- cultural appreciation and awareness to create more effective
ness in a variety of ways. Some of these include events hosted partnerships.
by our employee resource groups (ERGs) that feature tradi- AD: Our global presence gives us opportunity to attract and
tional food, recipes, clothing, dance, and music; in-person retain multilingual talent throughout the world. This compet-
and virtual volunteer events through our CARES volunteer itive edge allows us to have strong market penetration while
program; and social media campaigns that involve employ- maintaining the ability to effectively communicate with each
ees and partnerships with other organizations. For example, other regardless of location. In addition, we have programs
we partner with CodeDay, National Center for Missing and and processes in place to help Differently Abled employees
Exploited Children, and Global Business Coalition for Edu- who might otherwise have communications challenges.
cation to mark holidays or remembrances that are important
to them as well. In addition, we realize that a holiday in the
U.S., Black History Month for example, may be celebrated
at a different time in a different country so we are careful to
observe both occurrences.

Celebrating Holi at Midland Credit Management

Fall 2021  RMAI Insights Magazine 19

We honored two individuals at our 2021 Annual Conference try and drives significant policy changes.
in April for their contributions to the industry. We invited • Launching and continuing to enhance the Receivables
each award winner to tell us a little more about themselves
and share some of their insights for our members. Management Certification Program.
• Expanding RMAI’s education and networking experi-
BuD reitZel awarD winner
Jan stieger ences with RMAI’s Annual Conference, Executive Sum-
mit, and regional events.
Executive Director • Rebranding the association in 2017 from DBA Interna-
Receivables Management tional to RMAI with an expanded focus on secondary
Association International market opportunities and RMAI certification, both of
which continue to grow RMAI’s footprint today.
How did you get started in the account • Leading RMAI through the challenges of the COVID-19
receivables management industry? pandemic.
I’m an association management professional and have worked What are you most proud of accomplishing?
my way up through various associations since my first in- I’m proud of the growth in RMAI to a legitimate and respect-
ternship in college. I worked for the California Optometric ed voice for the accounts receivables management industry.
Association (COA) for 15 years, starting as an intern in the With both federal and state regulators and policymakers, we
government affairs department and ending as a Sr. Director are respected as a thoughtful, solutions-driven participant in
running the education and conference department. After negotiation and industry education. RMAI is here for the
COA, I worked at the California Pharmacists Association long term and being a trusted partner is crucial to that suc-
for five years. A friend of mine was leaving the California cess.
Association of Collectors (CAC), the ACA International Cal- I’m also immensely proud of the widespread adoption of our
ifornia unit, and referred me for the job. I took it in 2001 Receivables Management Certification Program. It is an in-
which launched my start in the accounts receivables manage- valuable tool for advocating on behalf of the industry when
ment industry. After 10 years at CAC, I was ready for a new asked what RMAI is doing to protect consumers and insure
challenge and DBA International had an opening for a new the professional and ethical collection of legitimate debt. A
Executive Director. I came to DBA, now RMAI, in 2011 measure of the program’s success is the increasingly growing
and never looked back! number of creditors who require RMAI certification to pur-
You joined RMAI as Executive Director in 2011. In be- chase or service their accounts receivables.
stowing this award, the Board of Directors recognized you Is there anything you would do differently if you had a
for: chance?
• Moving DBA from an association managed by a man- I don’t know anyone who is not an “armchair quarterback.”
agement company to one with dedicated staff. Of course, in both my personal and professional lives, there
• Developing a robust and successful state and federal gov- are many situations that I could have done better, been more
ernmental advocacy program which protects the indus- helpful, made a better decision, etc. I wouldn’t be human if
20  RMAI Insights Magazine  Fall 2021 I was perfect.
I will say that through living with my husband who had
medical issues our entire life together, I learned to enjoy life

and not put off dreams and adventures, but to live life to presiDent’s awarD winner
the fullest each day. I consider this one of the most valuable amBer russo
lessons I have ever learned!
President
“Through living with my husband Kino Financial Co., LLC.
who had medical issues our entire life
together, I learned to enjoy life and How did you get started in the
not put off dreams and adventures, accounts receivables management
,,but to live life to the fullest each day. industry? What year?
I began my career in the accounts receivables industry in
What motivates you to work so tirelessly for RMAI? 2005. My first eight years were spent working in Opera-
I’m passionate about the mission and purpose of RMAI. I tions Management roles for regional collection law firms. In
fundamentally believe in personal financial responsibility 2013, I made the shift to the acquisition and management of
and therefore, the important role the industry plays in the non-performing accounts receivables portfolios.
credit ecosystem. Couple my passion with working with a What is your philosophy?
dedicated board and staff, I feel privileged to be a part of the My philosophy for navigating this industry is to value and
team. nourish each and every relationship opportunity. I have the
In my role, every day is different – some days I might be utmost respect for my colleagues, and I appreciate that we are
focused on advocacy work and others on events. I love the a group of professionals that is always sharing best practices
variety and the challenge of keeping many balls in the air at and promoting each other’s success.
the same time. What are you most proud of accomplishing?
What do you see for the future of RMAI and RMAI From a professional standpoint, I am most proud of the ser-
members? vicer management model that we’ve built at Kino Financial
RMAI is built on an extremely solid foundation and has a Co., LLC. Our extensive experience in the operation and
strong sense of who we are and importantly, who we are not! management of collection law firms is unique and allows us
We have a clear vision of our purpose and with a nimble to truly partner with and support our firms at the highest lev-
board of directors, RMAI is constantly evolving to fulfill el. From a personal standpoint, I am proud to be a contrib-
members’ changing needs. Strategic planning based on in- uting member of not only our industry trade organizations
dustry trends is in place and results in innovative and some- but also a volunteer for the Arizona Make-A-Wish Wishmak-
times revolutionary ideas. Membership is growing each year! ers Council.
Good things are ahead! What advice do you have for those who are new to the
account receivables management industry?
I encourage newcomers to connect with industry colleagues
by getting involved with a trade organization like RMAI.
For years, I’ve sought input from our network when looking
to partner with a new seller or hire a new vendor. There is
nothing more valuable than reliable, first-hand information
to help make an informed decision.
You have co-chaired three successful virtual silent auction
fundraisers for the RMAI Legislative Fund. How and why
did you get involved with these efforts?
As a member of the RMAI Legislative Fund Committee,
co-chairing the Silent Auction seemed like a great opportu-
nity to recruit new colleagues to contribute, even in a small
way, in support of the Legislative Fund. When we took the
Silent Auction “virtual” in 2020, we greatly expanded our

Continued on Page 30

Fall 2021  RMAI Insights Magazine 21

How the ARM Industry
Can Maintain Security
and Compliance While
Working from Home

By Andrew House

With the emergence of new technologies, paired with reli- The best next step should be creating a standardized set of
able and widely accessible Internet access, personal electronic guidelines utilizing a few industry standards that have already
devices can now effectively communicate from almost any- been widely accepted, including but not limited to PCI DSS,
where in the world. Paired with the current global pandemic, SOC 2, and HIPAA. Rather than attempting to reinvent the
we’ve reached a point where working from home no longer wheel, we need to pair these standards with an instillment of
inhibits productivity and, in many industries, can become trust in our remote employee workforce while also creating a
the new normal in order to maintain an employee workforce set of compensating controls so the security and compliance
large enough to satisfy our industry’s demand. standards that we’ve all worked so hard to create and main-
As we move toward this new work-from-home standard, tain don’t have to suffer.
some states like Minnesota and Connecticut have already be- That being said, the chances of all states coming together in
gun creating their own individual guidelines. Prior to mov- unity are extremely low. Instead, let’s review some specific
ing too far forward in this direction as an industry, it would controls that should be the most prevalent across the country
be a best practice to create and present some universal stan- to be better prepared as additional state-specific guidelines
dards that can be agreed upon now before continued state continue to be formed.
guideline variances continue to form.
Similar to what we’re seeing unfold with state-specific con- Security
sumer protection laws (California’s CCPA, Colorado Privacy CISA - https://www.cisa.gov/telework
Act, Nevada’s AB 323 and SB 260 bills, Texas’ HB 3741, CIS - https://www.cisecurity.org/blog/how-cis-can-help-
West Virginia’s HB 3159, and Florida’s HB 969), it will be teleworkers-improve-their-cyber-defenses/
extremely difficult for any organization that operates across NIST - https://csrc.nist.gov/projects/telework-work-
multiple state lines to keep track of yet another subset of ing-anytime-anywhere
state-specific guidelines.
There are several facets to consider when implementing some In addition to more comprehensive security controls and re-
type of universal work from home guidelines. Data security sources from reputable organizations like the ones mentioned
and compliance are the clear frontrunners in both complex- above, I’ve outlined below a few of my high level “musts”
ity and cost of implementation, specifically for those organi- when creating a work-from-home technology plan.
zations utilizing outdated or legacy systems that aren’t capa-
ble of handling remote worker bandwidth.
22  RMAI Insights Magazine  Fall 2021

principles oF least priVilegeD itelisting through the firewall can also assist with preventing
permissions the work-from -home users from accessing FTP/SFTP sites
where large amounts of data could be uploaded to unknown
The first step, before doing anything, is to determine the sources or locations. Again, the items being restricted go back
work-from-home scope. Using job descriptions or other ap- to the scope of work being performed and least privileged
plicable task lists, create a list of the work-from-home em- permission needed, as we discussed earlier.
ployees and determine the very lowest access level an em-
ployee could receive without affecting their performance. creating a secureD working
This first step is imperative to creating the necessary security enVironment
controls and properly justifying access to any company infor-
mation or resources. After making the decision to utilize a secured thin client, the
last step is ensuring the connections to company networks
the BeneFits oF connecting Via are done securely. As the employee will most likely be uti-
company issueD DeVice lizing their own personal at-home internet connection, the
following configurations are critical to security success.
Work-from-home employees should always be utilizing some The thin client should connect using Multi Factor Authen-
type of standardized company equipment. Not only does this tication to prevent unauthorized access to the company
make it easier on internal technical resources when trouble- network. Multi Factor Authentication is an authentication
shooting issues remotely, but device management and con- method that requires two or more pieces of evidence to log-
figuration becomes much more uniform and simplified. It in. (Something the user knows, possesses, or “is”). Common
will also be critical in preventing data leakage when properly Multi Factor Authentication methods are requiring the user
configured. to first enter their username and password, followed by im-
mediately receiving an email or SMS message with a unique-
Ideally, these company owned devices should be thin clients. ly generated one time password that must be inputted to
When powered on, a thin client will look and perform very complete the connection process.
similar to a standard out of the box laptop but from a security Once connected, ensure the thin client cannot stay connect-
standpoint is a far better solution. The thin client typically ed to the network during long periods of user inactivity. Typ-
contains no local hard drive and instead relies on securely ically, after a short period of time, such as 5 minutes with
connecting to the company network to obtain all work-relat- no keystrokes entered or mouse pointer movement, the user
ed documents, sensitive data, memory and applications. This should be forcefully disconnected from the network to pre-
prevents company data from being saved on devices that have vent potential unauthorized access to the network. This is a
a higher risk of being compromised than those inside a secure common practice within the office environment but is espe-
company facility. With this secured login layer in place pre- cially important while working from home when an employ-
venting unauthorized access to company data, many of the ee could easily be distracted by non-work-related tasks, such
in-office security control requirements such as CCTV cam- as doing the laundry or loading the dishwasher.
eras, 24/7/365 security guards and facility keycard or similar Lastly, ensure that any split tunneling connectivity is dis-
access control can be satisfied with a compensating control. abled. Split tunneling allows a device to decide which data is
sent encrypted over the company network versus unencrypt-
“ Work-from-home employees ed to other sources. Since the thin client’s connection to the
should always be utilizing some office network (VPN) should encrypt the data as it’s sent and
type of standardized company received by default, disabling split tunneling will ensure there
,,equipment. is no gap in an encrypted electronic communication.

The thin client device should connect to the network in a maintaining stringent leVels oF
way that keeps it protected by company firewalls as if the compliance
employee were still in the office. Many best practice firewall
configurations limit websites that can be visited by blocking As with data security and privacy, compliance has several fac-
website categories such as Chat/Instant Messaging, Hacking, tors to consider. Make sure to do your research into your
Malware and Freeware/Software Downloads. In addition
to web category restrictions, specific port blocking or wh- Continued on Page 30

Fall 2021  RMAI Insights Magazine 23

Financing Debt — Or Is It
Debt Financing?

By Andy Carlson and Louis DePalma

2020 was the year of the whipsaw. February saw stock mar- by pooling cash advances to make inaugural purchases and
ket highs, capital was abundant and optimism was wide- trusting collections to stay ahead of the high interest pay-
spread. The last in-person, pre-pandemic event was held: ments.
the RMAi Annual Conference. Then along came March and ▶ Interest Rate: 20% (varies from 18% – 27% with up-
the pandemic. COVID-19 caused the abrupt shutdown of
the global economy. Capital markets froze and governments front fees ranging from 3% – 5%)
responded by flooding the markets with liquidity. Markets ▶ Advance Rate: 100% (uncollateralized, but personally
rebounded in short order, but the landscape was altered.
Between lockdowns, remote-work, vaccinations, and now guaranteed)
the Delta and Mu variants, the debt purchasing industry has ▶ Positives: Immediately available, no underwriting
had a lot to contend with. Unexpected changes to recovery
rates, drops in consumer charge-offs, eviction and reposses- (except for personal credit score)
sion moratoria have all created uncertainty in areas once con- ▶ Negatives: Personal guaranty, extremely high cost
sidered reliable and predictable. With so many operational ▶ Quali cations: Good credit score, high degree of
and market issues to contend with, the cost of financing
purchases may not be of utmost importance. How purchases comfort with personal risk
are financed, and placement on the tiers of financing staircase
have a direct effect on pricing and competitiveness. Rediscounters
First, it is important to understand the traditional sourc- Rediscounters borrow money wholesale and re-lend that
es and terms. Financing, like the purchasing ecosystem, is money out retail to smaller debt buyers that do not qualify
highly diverse and spans a wide spectrum of rates, structures, for institutional financing.
and lenders. Financing is available at all stages of buyer de-
velopment. As a purchaser becomes more professional and Rediscounters are generally familiar with charge-off markets
has more retained capital, interest rates decline and advance and review each purchase. Typically, they will have a view on
rates generally increase. purchase price and liquidation curves from past transactions
Credit Card Cash Advance or industry intelligence.
Step one on the financing ladder is the ubiquitous credit card They may offer the benefit of market feedback or they may
cash advance. Some of today’s large debt purchasers started dictate the purchase price, which could limit opportunities
24  RMAI Insights Magazine  Fall 2021 to win deals.
▶ Interest rate: - 12% – 15% PLUS back-end participa-

tion (20 – 30% of the profits)
▶ Advance rate: Typically 80% (Ranges from 70 – 90%)
▶ Positives: Quick decisions, market knowledge

Continued on Page 40

Fall 2021  RMAI Insights Magazine 25

Collector
Training: A Key
Component of
Compliance

By Mary Shores

As Regulation F takes effect across the United States, agen- lection agencies had comprehensive rules they had to follow
cy owners are anxious about the possible lawsuits that may to avoid collection-related lawsuits.
follow. After all, teaching collectors new regulatory require- For the past 43 years, many agencies have faced FDCPA-re-
ments can be difficult and time-consuming, and the possi- lated lawsuits, some of which are dismissed and some that
bility of a mistake is always a looming fear in an owner or are ruled in the consumer’s favor. When this happens, agency
executive’s mind. owners and middle management can feel defeated, and they
Teaching collectors to comply with ever-changing state and often wonder how to avoid similar lawsuits in the future.
federal regulations is nothing new, and while it may not get Now, with changes to FDCPA through Reg F, these legiti-
easier each time, owners, executives, and managers have sev- mate reasons could definitely increase if agencies aren’t pre-
eral tools they can rely on to make the transition as smooth as pared to handle conversations with consumers.
possible by avoiding potential collector-based lawsuits. First, 2. Emotional Reasons
there needs to be a common understanding of three reasons Consumers often feel vulnerable and stressed over having a
a consumer may sue. debt. According to the Consumer Financial Protection Bu-
reau’s (CFPB) 2017 report “Financial Well-Being in Amer-
three reasons consumers may sue ica,” when consumers are already struggling to make ends
meet, their emotional well-being is impacted, especially when
In general, most collector-based lawsuits can be traced back they perceive an interaction with a debt collection agency as
to three main causes: legitimate reasons, emotional reasons, negative.
and opportunistic reasons. Understanding each of these caus- When a consumer is feeling insecure after an interaction with
es is essential in the journey to prevention. The first cause is a debt collector, they may react by filing a lawsuit against
common and an obvious place to start. the agency, even if no regulations were violated. In fact, ac-
1. Legitimate Reasons cording to LegalMatch.com, people can file civil lawsuits
When Congress passed the Fair Debt Collection Practices for emotional distress. Even if the consumer doesn’t go that
Act (FDCPA) in 1978, debt collection practices transformed route, they may comb through their interactions with an
forever. For the first time in United States history, debt col-
26  RMAI Insights Magazine  Fall 2021

agency to find any potential slip ups. Sometimes, they may to train collectors on how to keep revenue coming in without
even find a legitimate cause. inciting conflict.
These lawsuits can be time-consuming and expensive; lucki- It all starts with the first strategy: Eliminate negative lan-
ly, they’re avoidable with the right tools. guage.
3. Opportunistic Reasons 1. Eliminate Negative Language
The third possible cause for lawsuits falls in a category known Gordon Beck, the co-founder of the innovative collection
as “legal opportunism.” While these lawsuits are far less com- agency Valor, says, “You don’t have to be rude, harsh, stern,
mon in debt collection, it’s still important to be aware of mean or aggressive to collect a bill.”
them when discussing lawsuit-preventative training. Beck is one of many in the receivables management indus-
Black’s Law Dictionary defines legal opportunism as “Ex- try who has embraced a new approach to collections—an
ploiting situations for personal gain, without considering approach that follows compliance guidelines and establishes
others.” In other words, these lawsuits aren’t necessarily mo- a positive consumer experience. There’s a reason why many
tivated by any legal violations; instead, people use them to executives are going this route, and it all comes down to the
gain money or resources at the expense of someone else. science behind negative language.
While agencies can’t always predict a consumer’s motive to The National Library of Medicine hosts a 2007 study about
sue, they can make sure their strategies decrease liabilities. the effect of negative language on the brain. In the study,
With that in mind, it’s time to jump into three key strategies Nelly Alia-Klein, et al found that when in an MRI machine
to prevent these main causes of lawsuits. and subjected to the word “no,” participants displayed activ-
ity in the consequence and punishment side of their brain.
“ Ultimately, phraseology can This showed the researchers that negative language creates a
make or break a consumer’s negative reaction in the brain.
experience with an agency, which With that in mind, imagine how consumers may feel when
is why magnifying the consumer they’re constantly told what collectors can’t do for them rath-
experience and crafting scripting er than what they can do. Imagine how they feel when their
that supports the experience requests are met with explanations of policy instead of expla-
,,is so important. nations of what a collector can do to help resolve an issue.
Undoubtedly, negative language can create to high tensions
three secret strategies to aVoiD and conflict, which can sometimes lead to lawsuits.
lawsuits On the flip side, if collectors avoid negative language—spe-
cifically, if they avoid words like “no,” “not,” “can’t,” “won’t,”
Litigation doesn’t have to be a common occurrence in the “however,” and “unfortunately”—they can avoid conflict
debt collection space. While some consumers may pursue altogether. The secret lies in finding words and phrases to
legal action regardless of the strategies the agency uses on replace negative language, so collectors have pre-written re-
their calls, it’s still possible to prevent several lawsuits that fall sponses to common stalls and objections. That way, if a road-
into the categories above. It all starts with training new and block presents itself on a call, the collector will have tools to
existing team members to focus on the words they speak to handle it without resorting to negative language.
consumers. For example, if a consumer says they would rather pay a
Ultimately, phraseology can make or break a consumer’s ex- client than a debt collection agency, the collector can avoid
perience with an agency, which is why magnifying the con- saying, “No, the client has given the balance to us to collect
sumer experience and crafting scripting that supports the ex- on.” Saying that could make the consumer feel frustrated
perience is so important. Luckily, it’s easier than it may seem and unsupported, and it could lead to a lawsuit. Instead, the
collector could validate the consumer’s feelings and let them
know they’re in good hands with the agency:
“I completely understand your perspective. The good news
is, we have the tools to help you get this taken care of. How
do you want to proceed?”

Continued on Page 44

Fall 2021  RMAI Insights Magazine 27

Getting Ready for Reg F Checklist

By Sarah E. King and Justin M. Penn

Nearly eight years in the making, the wait is finally over. The CFPB has officially announced the compliance date for Regulation
F, 12 CFR part 1006 (Regulation F) is November 30, 2021. The CFPB proposed delaying the effective date to give the industry
more time to implement the requirements. The CFPB has now determined that additional time is not needed, but it will con-
tinue to consider additional guidance for debt collectors, as necessary. Regulation F is the biggest regulatory change to the debt
collection industry in decades. Regulation F updates regulations concerning debt collection communications. These updates
include addressing new forms of communications not available when the FDCPA was created (like texts and emails) as well as
updating regulations concerning what constitutes harassing conduct.

collection practices

Regulation F sets forth a number of guidelines that apply to the collection practices employed by debt collectors. These guide-
lines apply for the placing of phone calls, communicating in different languages, and credit reporting. Here is a checklist of items
related to collection practices to ensure compliance.

Review the Frequency of Call Placements – Only Sev- Decide Whether to Employ the Limited Content Mes-
en Calls in Seven Days on Each Debt: Regulation F sage: Regulation F provides that debt collectors may use a
prohibits debt collectors from calling the same consumer limited content message, or LCM, that creates an excep-
more than seven times within seven consecutive days. If tion that is not considered a communication under the
a debt collector has a conversation with a person over FDCPA. That message may only include (1) a request that
the phone, the collector is prohibited from calling them the consumer reply to the message; (2) a business name for
again for seven days unless the consumer provides con- the debt collector that does not indicate the nature of the
sent directly to the debt collector to receive additional call; (3) the name of a person or persons whom the con-
calls. sumer can contact; and (4) a return phone number.

Review Any Communications in Language Other Review Communications on Time Barred Debt: Regu-
than English: Regulation F does not specifically man- lation F prohibits debt collectors from threatening to sue
date disclosures in any language other than English. It consumers when attempting to collect time-barred debt
does provide that if debt collectors choose to provide but excludes proofs of claim filed in connection with a
validation notices in other languages, they must also in- bankruptcy proceeding from this prohibition.
clude an English-language notice in the same commu- Review Social Media Collection Practices: Regulation F
nication. prohibits debt collectors from communicating or attempt-
Review Text and Email Forms of Communication: ing to communicate with a person through a social media
Regulation F provides updated guidance on communi- platform if the communication is viewable by the general
cating with consumers via texts and emails. This guid- public or the person’s social media contacts.
ance includes when and how these communications can Review Initial Collection Notices: Regulation F clarifies
be made. The guidance for email and text communica- that debt collectors may provide the FDCPA initial debt
tions is set forth more fully below. validation notices in writing or electronically. Regulation
Review Communications on Accounts Where There F also provides a model validation notice that can be used
Is Credit Reporting: Regulation F requires debt col- in a debt collector’s initial letter and explains that if debt
lectors to attempt to speak with a consumer by phone, collectors use the model notice, they are in compliance
actually speak to a consumer, or send an email or letter with Regulation F’s content requirements, i.e., it is a safe
before furnishing any information to a credit bureau. In harbor. Additionally, the use of the model validation notice
addition, any communications sent via email or letter re- would not be considered a violation of the prohibition on
quires a 14-day waiting period to allow for a “reasonable conduct that “overshadows” a consumer’s rights during the
period of time” to receive a notice that the communica- validation period. The notice is available at
tion was not delivered.
2288  RRMMAAIIIInnssiigghhtstsMMaaggazaiznien e  FaFlal l2l 0220121 http://rmaintl.org/ModelValidationNotice.

compliance anD monitoring issues
Setting up Regulation F compliance correctly now can ensure continued compliance through a process designed towards proper mon-
itoring and involvement on all levels. Here is a list of things you can now do to ensure good monitoring of compliance going forward.

Discuss with Clients and Review Collection Guidelines: Document Updates to Consumer Information: Regula-
Consider whether the changes you are making to your col- tion F allows contact with newer technology (such as texts
lection practices are something to discuss with your cli- and emails) with consent. As such, ensure that collectors
ents. Also review your clients’ guidelines to determine if and collection processes document when consumers re-
any changes are needed. quest communications in these forms.

Discuss with Vendors: Begin the process now of updat- Review Document Retention Policies: Regulation F re-
ing your vendors, including technology vendors, to ensure quires that a debt collector must keep a record of docu-
they are prepared well in advance of the November 30th ments from the date the collection activity began to the
implementation date. Do not wait until the Thanksgiving date of the last collection activity on the debt for three
holiday to learn that there are issues with the new collec- years after the last collection activity.
tion forms or practices.

Train Collection Staff: Although the benefits and require- Inform and Involve the Highest Levels: You should be
ments of training are self-evident, it is worth noting that discussing the relevant changes at all levels of the organiza-
all staff involved in the affected collection areas need to be tion, including the highest levels of people on the compli-
trained, tested, and monitored to ensure compliance with ance monitoring teams. By doing this now, you will help
Regulation F. Be sure to record your training efforts. This ensure both an understanding of the reasons for the chang-
training will not only ensure compliance but will demon- es and build an inherent ability to monitor the implemen-
strate your careful compliance management processes for tation of those changes going forward.
multi-state and regulatory examinations.

teXt anD email communications

Time and Location Communication Requirements and Regulations (§1006.6)
• Time and Location of Communication:

- Inconvenient Time: before 8 a.m. and after 9 p.m. local time at the consumer’s location.
- Inconvenient or unusual locations are determined by the medium of communication:

■ Mailing addresses and landline telephone numbers are associated with a place.
• As such, if a consumer notifies a debt collector that letters or calls to their home are inconvenient, calls and/or letters
to that place should stop.

■ Email addresses and mobile telephone numbers are not associated with a place.
• As such, if a consumer notifies a debt collector that letters or calls to their home are inconvenient, the debt collector
may still send emails and place calls to cell phones.

Procedures for communicating via text message (§1006.6(d)(3) and via email address (§1006.6(d)(4)):
• Debt collectors may still communicate via text with consent from the consumer.
• Communicating via text message must contain opt out options.

- Example of text message opt out language provided by the CFPB: “Reply STOP to stop texts to this telephone number.”
- Example of e-mail opt out language provided by the CFPB: “Click here to opt out of further emails to this email address.”

sarah e. king Justin m. penn

Associate Partner
Hinshaw & Culbertson, LLP Hinshaw & Culbertson, LLP
Sarah King counsels financial services
companies on compliance with stat- Justin Penn defends the interests of
utes and regulations. She also represents companies fac- companies and individuals in the
ing civil investigative demands, subpoenas, supervisory financial services industry in jurisdictions across the
examinations, and lawsuits brought by government en- country. Justin is the leader of the firm’s Consumer Fi-
tities. Sarah also advises clients on managing and miti- nancial Services Practice Group, where he has played
gating risk, helping them navigate issues concerning an integral role since starting with the firm in the early
federal and state regulatory requirements. 2000s. His extensive experience includes handling state
and federal consumer statute litigation.

FFaallll22002211    RMAI Insights MMaaggaazziinnee  2299
RMAI Insights

Award Profiles...continued from page 21 What motivates your continued support of RMAI?
membership participation. The Silent Auction has really be- Kino Financial Co., LLC continues to support RMAI be-
come a passion project for me, and I am motivated each time cause through our membership and certifications (individual
to raise as much money as possible for the Legislative Fund. and business) we are recognized as a reputable debt buying
The money raised is necessary to support RMAI’s efforts to partner in the industry. RMAI’s continuing education pro-
protect our businesses from potential harmful legislation and gram keeps us engaged in changes that impact our industry
I am grateful to be a part of the Silent Auction’s success. and RMAI’s proactive legislative work and member alerts
keep us aware and protected in today’s ever-changing envi-
“ I encourage newcomers ronment.
to connect with industry What do you see as the next great opportunity for the ac-
colleagues by getting involved count receivables management industry?
with a trade organization I see diverse portfolios as the next opportunity for small debt
,,like RMAI. buyers like Kino Financial Co., LLC. It’s important to be
open to exploring new products and new models, as tradi-
tional credit card debt is not as available as it has been in the
past. Fintech/online lending is a valuable option right now
as financial technology continues to take over with the mil-
lennial generation.

Working from Home...continued from page 23 able devices such as Alexa, Google Dot, etc. This creates a
state’s employment rules regarding any potential tax implica- new dimension of potential issues. Employees should be in a
tions if any employees happen to be located outside of state quiet and private work space any time they are making calls
lines. It would also be an excellent practice to verify your or accessing sensitive information with all unnecessary devic-
insurance policies, looking for specific coverage on remote es turned completely off and inactive. These waivers should
workers, data loss, and theft. Having your employees who be signed by the employee, countersigned by a corresponding
will be working remotely sign a waiver would also be an extra manager, and kept with the employee’s file to be reviewed and
layer of added protection and security. re-signed yearly, or more frequently as applicable regulatory
It will be extremely important to have a process in place to and/ or security changes are made to your work-from-home
measure performance metrics. This is somewhat of an un- guidelines.
known in this recently adopted method of service in the Ultimately, while it is unlikely that all states will adopt such
receivables space. Maintaining client satisfaction and em- comprehensive and universal security and compliance re-
ployee performance levels are necessary and critical in this quirements, the aforementioned suggestions and guidance
ever-changing environment. Having open and honest rela- should help organizations create a solid foundation that can
tionships between clients and vendors will make this a win- be built upon for states that attempt to create overreaching
win situation for everyone involved. work-from-home guidelines.
Of course, we cannot forget the regulatory rules along the
way. While measuring performance is important, there needs anDrew house
to be a manageable audit process in place to ensure regulatory
compliance. IT support will also be vital when it comes to Chief Security Officer
tracking call times and call recordings. These will need to be VeriFacts, LLC
easily and readily accessible. Andrew House is one of four owners
Another item on the checklist should be remote employ- of the Women Owned Small Busi-
ee waivers. These will cover a plethora of elements and will ness, VeriFacts, LLC and holds the title of Chief Se-
need to align with the company’s expectations. Items to be curity Officer. He has been with VeriFacts since 2006
addressed will be the remote workspace expectations and ap- and his primary focus is the oversight of IT, Vendor
plicable privacy rules to name just a couple. One new and Management, and R&D divisions with an emphasis
modern hurdle to overcome will be the emergence of record- on software development, process improvement and
30  RMAI Insights Magazine  Fall 2021 the implementation of emerging technologies.

Federal Update...continued from page 8 In late Spring/early Summer, the Banking Committee major-
Since passage of H.R. 2547, Chairwoman Waters has fo- ity staff appeared to be working on legislation to amend the
cused much of her attention on housing finance and evic- FDCPA. Among other things, conversations regarding the
tion-related proposals, as well as capital markets legislation, implications of Hunstein v. Preferred Collection and Manage-
rather than debt collection or even credit reporting. ment Services, Inc.,3 and various aspects of the proposed Reg-
Currently, the Financial Services Committee is working on ulation F were on-going. To-date, however, Chairman Brown
legislation to allocate approximately $340 billion for afford- has yet to introduce FDCPA legislation nor has the Banking
able housing programs for the budget reconciliation bill. Committee held a hearing on H.R. 2547. In fact, the Com-
Speaker of the House Nancy Pelosi (D-CA) has called on mittee has not held a full committee nor a subcommittee
House Democrats to pass their version of the budget rec- hearing specifically examining the receivables management
onciliation package and to approve the Senate-approved bi- industry or the CFPB’s regulatory agenda for the industry.
partisan infrastructure package (H.R. 3684) by October 1. Notably, freshman Senator Reverend Raphael Warnock (D-
This is an ambitious timeline that currently faces competing GA), who is the Chairman of the Banking Subcommittee
demands from moderate and progressive Democrats. Many on Financial Institutions and Consumer Protection, held
of the former are pressing for a quick vote on the Senate-ap- his first hearing in August.4 That hearing did not address the
proved bipartisan infrastructure bill before moving forward receivables management industry, however. It remains to be
with the reconciliation packages, whereas various progressive seen if he will deviate his focus from his main priorities of
Democrats are calling for the opposite approach. Follow- voting rights legislation, economic development, and health
ing those votes, the House of Representatives is set to work care.
on legislation increasing the debt ceiling and appropriating
funds for the federal government, among other priorities, be- Currently, the Senate calendar looks very full with large,
fore the year ends. complex legislative priorities and nominations, leaving little
Because of the midterm elections in November 2022, there is room for standalone legislative matters. The Senate Banking
unlikely to be much floor time to consider legislation in the Committee, among other committees, is working on the
New Year. Moreover, much of the legislation that will be in- budget reconciliation package. The Banking Committee is
troduced (and potentially even passed by the House) is likely focused on allocating approximately $330 billion for hous-
to be “messaging” legislation (bills designed to inform voters ing-related policies. Like the House, the Senate also will need
of what the party stands for). It is possible that Chairwoman to consider legislation to increase the debt ceiling and to fund
Waters will introduce another round of FDCPA legislation the government before the end of the year. Moreover, Presi-
during 2022 to promote her “consumer first” message to vot- dent Biden will continue to send executive and judicial nom-
ers, but whether she does and what such legislation contains inations for Senate consideration and approval, while the
will depend on a variety of factors, including what the Senate Senate works on its backlog of nominees. These initiatives
and the CFPB may do. will monopolize most of the remaining 2021 calendar. With
Senate Banking Committee the midterm election set for November 2022, both chambers
In contrast to the House Financial Services Committee, the of Congress will focus on campaigning for much of the year,
Senate Banking Committee’s debt collection agenda is still in thereby minimizing the amount of floor time available for
development. In March, Senator Sherrod Brown (D-OH), new legislative matters (other than messaging bills).
Chairman of the Banking Committee, and three Democratic
colleagues introduced legislation to restrict garnishment or The industry should continue to closely monitor both
the involuntary collection of the economic impact payments chambers, however, as it is possible that relevant legislation
disbursed pursuant to the American Rescue Plan.2 Despite could be slipped into one or more of the very large, complex
widespread support from the industry and banking groups,
the Senate did not vote on the bill. Continued on next page

“ In late Spring/early Summer, the 2 Van Hollen, Brown, Wyden, Menendez, Introduce Bill to Protect
Banking Committee majority staff Stimulus Checks from Debt Collectors, Press Release, Senator
appeared to be working on legislation Chris Van Hollen (Mar. 18, 2021), available at https://www.
,,to amend the FDCPA. vanhollen.senate.gov/news/press-releases/van-hollen-brown-
wyden-menendez-introduce-bill-to-protect-stimulus-checks-
from-debt-collectors.
3 No. 19-14434, 2021 WL 1556069 (11th Cir. Apr. 21, 2021).
4 Protecting Consumers from Financial Fraud and Scams in the
Pandemic Recovery Economy, Senate Banking Subcommittee on
Financial Institutions and Consumer Protection (Aug. 3, 2021),
available at https://www.banking.senate.gov/hearings/protect-
ing-consumers-from-financial-fraud-and-scams-in-the-pan-
demic-recovery-economy.

Fall 2021  RMAI Insights Magazine 31

Federal Update...continued from previous page tronic communications. Given his testimony and his previ-
packages moving over the next few months. The reconcilia- ous comments on the proposed rule, we expect Mr. Chopra
tion process and the nature of appropriations provide some to reopen the rulemaking at some point.
protections;5 however, the industry should remain engaged. While Mr. Chopra may reopen the rulemaking process, he
For instance, Senators Brown and Warnock could introduce has indicated that he has other priorities he wants to pursue
legislation to help bolster Senator Warnock’s consumer pro- as well, including new rules for the student loan and servic-
tection credentials leading up to his reelection in November. ing market; oversight of the mortgage market (particularly
with respect to forbearance); and addressing “serious errors”
“ The CFPB must do more to in credit reporting. Given that once confirmed, Mr. Chopra
safeguard our economy and is likely to remain Director until a Republican becomes pres-
protect borrowers from abuse. ident, Mr. Chopra’s timeline for revising Regulation F is not
,,- Rohit Chopra tied tightly to the congressional calendar. Regardless of when
cFpB agenDa the rule is re-opened for comment, we continue to expect
Mr. Chopra to ramp up enforcement in the space and to
In February, President Joe Biden nominated Rohit Chopra to coordinate enforcement with the FTC, in light of previous
be Director of the CFPB and in March, the Senate Banking comments.
Committee deadlocked on the vote to advance his nomina-
tion to the full Senate. Since then, Mr. Chopra has continued concluDing thoughts
to serve as a commissioner of the Federal Trade Commis-
sion (FTC) and Dave Uejio has continued to serve as the Congress has a full agenda through the end of the year fo-
Acting Director. During his tenure, among other things, the cused on large, complex legislation that will require signifi-
CFPB noted various allegedly recurring FDCPA violations cant coordination and time to complete. With the campaign
in its Summer 2021 Supervisory Highlights,6 and issued an season kicking off in earnest in early 2022, the legislative
interim final rule clarifying how the FDCPA interacts with
the CDC’s (now elapsed) eviction moratorium.7 This fall, 5 The rules governing the reconciliation process in the Senate
however, we expect the Senate will confirm Mr. Chopra on are strict and generally preclude provisions that have only an
very narrow margins. “incidental effect” on the budget, and the CFPB is not funded
The pending confirmation of Mr. Chopra, combined with via congressional appropriations so there are significant limita-
the pending nomination of Dave Uejio to be an Assistant tions on Congress’ ability to use federal funding to control how
Secretary of the Department of Housing and Urban Devel- the CFPB enforces laws under its jurisdiction.
opment and the CFPB’s decision to maintain the original 6 Supervisory Highlights, Issue 24, Summer 2021, Consumer
November 30, 2021, effective date for Regulation F8 indicate Financial Protection Bureau (June 2021), available at https://
that the CFPB is in a holding pattern over the rule. FDCPA files.consumerfinance.gov/f/documents/cfpb_supervisory-high-
enforcement, however, is on-going (including pre-existing lights_issue-24_2021-06.pdf.
complaints) and is likely to ramp up after Mr. Chopra is con- 7 Prepared Remarks of Acting Director Dave Uejio for the Interim
firmed.9 Final Rule on CDC Eviction Moratorium Rights under the Fair
Once Mr. Chopra is confirmed, various members of Con- Debt Collection Practices Act, Press Release, Consumer Financial
gress expect him to re-open the rulemaking process. Several Protection Bureau (Apr. 19, 2021), available at https://www.
members of Congress, including Chairwoman Waters, have consumerfinance.gov/about-us/newsroom/prepared-remarks-
asserted that the proposed rule would authorize collectors to of-acting-director-dave-uejio-for-the-interim-final-rule-on-
“harass and threaten consumers by sending unlimited emails cdc-eviction-moratorium-rights-under-fair-debt-collection-
and text messages and calling them seven times a week to practices-act/.
collect debts.”10 Accordingly, there is pressure for the CFPB 8 CFPB Con rms E ective Date for Debt Collection Final Rules,
to revise the rule’s provisions regarding telephonic call caps, Press Release, Consumer Financial Protection Bureau (Jul. 30,
communications via text message and email (content, fre- 2021), available at https://www.consumerfinance.gov/about-
quency, and notice issues), Limited-content messages, and us/newsroom/cfpb-confirms-effective-date-for-debt-collec-
whether consumers must opt-out or opt-in to receiving elec- tion-final-rules/#:~:text=WASHINGTON%2C%20D.C.%20
32  RMAI Insights Magazine  Fall 2021 %E2%80%93%20The%20Consumer%20Financial,%2C%20
on%20November%2030%2C%202021.
9 See, e.g., Bureau of Consumer Financial Protection v. Fair
Collections & Outsourcing, Inc., et al., Case No, 8:19-cv-02817-
GJH (D. Md. 2021), available at https://files.consumerfinance.
gov/f/documents/cfpb_fco_proposed_stipulated-jdmt-and-or-
der_2021-08.pdf.
10 Waters Statement on the CFPB’s Weak Debt Collection Propos-
al, Press Release, House Financial Services Committee (May
7, 2019), available at https://financialservices.house.gov/news/
documentsingle.aspx?DocumentID=403726.

window is quickly closing. Although the likelihood of stand- Dan nuÑeZ cohen
alone FDCPA legislation moving through Congress over the
next 15 months appears low (other than messaging bills), the Associate
industry must stay engaged for any developments, partic- K&L Gates
ularly to any amendments attached to the in-development Dan Nuñez Cohen is an associate in
budget reconciliation bill and the end-of-the-year appropri- the firm’s Washington, D.C. office.
ations packages. Although some procedural and substantive Dan advises and advocates for clients at the intersection
guardrails are in place, it is possible that adverse provisions of federal legislative and regulatory policy and compli-
could be included. ance. He has experience assisting with bank charters
Sooner rather than later, the Senate is likely to confirm Rohit and money transmitter licenses; counseling clients on
Chopra as Director of the CFPB. Once he is confirmed, the compliance with federal banking and trust laws; and
CFPB’s agenda for the receivables management industry will advocating for client interests before regulators and
come into focus much more clearly. We expect that the Bu- congressional staff, including drafting legislation and
reau will reopen the proposed Regulation F and is likely to responding to proposed rulemakings.
focus on the call cap and electronic communications provi-
sions, but how great a priority the rulemaking will be to Mr.
Chopra remains to be seen.

Dan crowley

Attorney/Partner
K&L Gates
Dan Crowley is a partner in K&L
Gates’ Washington, D.C. office. He
leads the firm’s global financial services policy practice.
In the decade before joining K&L Gates, he led the gov-
ernment relations efforts at the Investment Company
Institute, The Nasdaq Stock Market, and the National
Association of Securities Dealers. Previously, he served
as general counsel to then-House Speaker Newt Gin-
grich, and to House Oversight Committee Chairman
Bill Thomas.

Bruce J. heiman

Attorney
K&L Gates
Bruce Heiman engages in a wide-rang-
ing federal counseling and lobbying
practice. He has represented leading companies and
trade associations in technology, financial services, post-
al, trade, transportation and manufacturing industries.
He is nationally ranked as a top government relations
lawyer by both Chambers USA and The Legal 500. His
clients praise him for his strategic advice and for his
ability to build coalitions.

Fall 2021  RMAI Insights Magazine 33

State Update...continued from page 9 visions applying universally to the collection industry and not
adopts a significant overhaul to D.C.’s debt collection laws singling out debt buyers. Additionally, RMAI was able to insert
related to collection activity and litigation. Among other language which allows debt collectors who have affiliates to have
things, the law: (1) expands the prohibitions on deceptive be- a single license and a single examination.]
havior; (2) prohibits debt collectors from making more than Minnesota HB 6a [Chapter # 4 of the First Special Session
three phone calls to a consumer in seven days; (3) requires of 2021] – The law took effect on August 1, 2021. The law
debt collectors to have complete documentation related to (appearing on pages 54-64) expands the definition of “col-
the consumer debt being collected; (4) requires debt collec- lection agency” to include “debt buyers” which will thereby
tors to provide extensive data and documents to the consum- require debt buyers to be licensed as a collection agency un-
er within 15 days of a written request; (5) requires lengthy der the existing Collection Agency Act. Debt buyer is defined
consumer notices informing consumers of their rights; (6) as a “business engaged in the purchase of any charged-off
requires debt collectors who enter into a payment schedule account, bill, or other indebtedness for collection purpos-
or settlement to provide a written copy of the schedule or es, whether the business collects the account, bill, or other
agreement; (7) adds specific requirements for a debt collector indebtedness, hires a third party for collection, or hires an
when initiating a cause of action against a consumer for con- attorney for litigation related to the collection.” Debt buyers
sumer debt; and (8) increases damages that can be awarded are statutorily exempted from six provisions in the Collec-
to a consumer for violation of the act. [RMAI retained a D.C. tion Agency Act related to a third-party collection agency’s
lobbyist to advocate on behalf of the industry. RMAI and an in- interaction with clients, including the maintaining of trust
dustry coalition were successful in: (a) adding exemptions to the accounts. Debt buyers are required to be licensed as of Jan-
call cap limitation, (b) eliminating pre-charge-off itemization of uary 1, 2022; however, any debt buyer whose application is
credit card debt; (c) eliminating the requirement for 24 months filed prior to January 1, 2022, and is pending a decision, may
of statements; (d) eliminating unsolicited mailing requirements continue to operate without a license until the commissioner
foisted upon debt collectors involving sensitive consumer data; approves or denies the application. A new provision is added
(e) eliminating a requirement that the “original account num- to the Collection Agency Act which allows affiliated com-
ber” be in the bill of sale; (f ) eliminating mandatory punitive panies to operate under a single license and be subject to a
damages; and (g) eliminating a “per violation” penalty. More single examination, provided that all the affiliated company
work needs to be done on the “permanent” bill which will be names are listed on the license. [RMAI was successful in nego-
adopted sometime this Fall.] tiating into the legislation the six statutory exemptions for debt
Maine HB 542 [Public Law 382] – The law takes effect on buyers that related to client relationships; permitting affiliated
October 17, 2021. The law adjusts personal property exemp- companies to share a license; and allowing debt buyers to contin-
tions and the value of property that is exempt from attach- ue operations while their application is pending approval.]
ment and executions, including wages and homestead. The Nevada SB 248 [Chapter 291 of the Laws of 2021] –
law also creates an inflation-indexed bank account exemp- The law took effect on July 1, 2021. The law limits interest
tion. [Generally, the dollar threshold of exemptions in this law charged by a collection agency to 5% when collecting on a
is consistent with other states. What stands out in this bill is the medical debt and prohibits a collection agency from bring-
$3,000 bank account exemption which is tied to an inflation in- ing suit on a medical debt if the value of the medical debt is
dex which is on the higher side compared to recent enactments.] $10,000 or less. [RMAI, through our Nevada lobbyist, negoti-
Maine HB 1082 [Public Law 245] – The law takes effect on ated a carve-out from the definition of “medical debt” for open
October 17, 2021. The law contains several new requirements and closed credit lines, provided that the credit lines were not
for debt collectors, including: (1) authorizing debt collectors created exclusively for medical debt. The legality of these new
to be licensed through the National Multistate Licensing statutory requirements is currently being challenged in court.]
System (NMLS); (2) new administrative procedures for the Ohio SB 13 [Chapter 1 of the Laws of 2021] – The law
Bureau of Consumer Credit Protection relating to the issuing took effect on June 16, 2021. The law decreased the statute of
and revoking of collection licenses; (3) allowing debt collec- limitations from eight to six years on a written contract and
tors who have affiliates to have a single license and a single six to four years on an oral contract. The law also establishes
examination; (4) prohibiting debt collectors from collecting a six-year statute of limitations for consumer transactions in-
medical expenses from a consumer who has been determined curred primarily for personal, family, or household purposes,
to be qualified for free or charity care; and (5) prohibiting regardless of whether the contract was in writing or signed
debt collectors from suing on debt in small claims courts. by the party. The new six-year limitations period for person-
[The bill was originally focused on debt buyers and contained al, family, or household purposes is exempted from the state
more onerous documentation requirements. After extensive ne- borrowing statute as long as the post-judgment interest rate
gotiations in 2020, RMAI was successful in removing most of
the debt buying provisions from the bill with the remaining pro-

34  RMAI Insights Magazine  Fall 2021

charged by Ohio is less than the rate charged by the other is awaiting the Governor’s signature. RMAI successfully obtained
state. [RMAI worked with other industry trade associations over amendments that removed a ban on the sale of hospital debt to
the past year to get this bill passed.] debt buyers that existed in earlier versions of the bill.]
Virginia HB 2307 [Chapter 35 of the Laws of 2021] – The California SB 531 – This bill will extend the data and docu-
law takes effect on January 1, 2023. The law applies to per- mentation requirements that were adopted in the California
sons that conduct business in the Virginia or produce prod- Fair Debt Buying Practices Act in 2013 to the Rosenthal Fair
ucts or services targeted to Virginia residents. Under the law, Debt Collection Practices Act. The bill will require collec-
consumers have the right to: (1) access their personal data; (2) tion agencies to obtain certain data and documents prior to
correct inaccurate personal data; (3) delete personal data, in collection and provide the same to consumers upon request.
certain circumstances; (4) obtain a copy of the personal data [This bill has passed both houses and is awaiting the Governor’s
they previously provided to a controller; (5) opt-out of the signature. RMAI successfully obtained amendments addressing
processing of their personal data if related to targeted adver- several concerns which resulted in an exemption for debt buyers.
tising, sale of personal data or certain profiling activities; (6) RMAI did not want debt buyers subject to two strict liability
appeal a controller’s refusal to take action on a request; and statutes related to the same topic.]
(7) submit a complaint to the attorney general if an appeal New York SB 153 – This bill which is known as the “Con-
is denied. The law does not apply to data and activities of sumer Credit Fairness Act” will: (1) reduce the statute of
certain entities, including financial institutions; data subject limitations from six to three years on consumer credit trans-
to the Gramm-Leach-Bliley Act (“GLBA”); businesses gov- actions; (2) prohibit the revival of a debt that is beyond the
erned by the Health Insurance Portability and Accountability statute of limitations through the making of a payment; (3)
Act rules; institutions of higher education; activity related to require the mailing of a notice by the court clerk after filing
the use of personal information regulated by the Fair Credit proof of service of the summons and complaint; (4) require
Reporting Act; and data processed or maintained for certain specific data to be included in the complaint; and (5) require
employment purposes. The Act does not provide a private the provision of form affidavits. [This bill has passed both hous-
right of action. If an alleged violation is not cured within es and is awaiting the Governor’s signature. RMAI had been
30 days, the attorney general may seek an injunction and a actively opposing this bill since it was first introduced in 2009.
civil penalty up to $7,500 per violation. [RMAI has a Privacy After years of industry offers to negotiate the bill being reject-
Working Group which reviews state laws and regulations im- ed, the sponsors finally expressed a desire to discuss our concerns.
pacting consumer privacy and advises RMAI on actions it should After 13 months of negotiations, the industry was successful at:
pursue. The Virginia law was very well received by the business (1) removing language which would have expunged all debt at
community as it contains several business exemptions, including the expiration of the statute of limitations; (2) removing pre-
the GLBA exemption. RMAI views this law as the boilerplate we charge-off itemization requirements on revolving lines of credit;
would encourage other states to adopt.] (3) changing the point of reference on data and documents from
Washington HB 1525 [Chapter 50 of the Laws of 2021] origination to charge-off; (4) clarifying a provision of existing
– The law took effect on July 25, 2021. The law establishes law, that some judges were misinterpreting, to make clear that
an automatic $1,000 exemption on bank garnishments. The creditors are not required to inform consumers when their ac-
law would sunset on July 1, 2025. [RMAI and the Washington counts are sold in order for the successor parties in interest to be
Collector’s Association successfully fought to reduce the automatic able to collect on those accounts; and (5) extending the effective
bank exemption from $2,500 to $1,000 and have it tied to a date by six months to provide the industry time to adjust op-
sunset date.] erational controls as well as accelerate any legal actions under
existing law.]
anticipateD laws New York SB 5724-A – This bill would set post-judgment
interest at 2% per annum and would apply this interest rate
Bills passing both houses and awaiting Governor’s signature retroactively to judgments entered prior to its effective date.
California AB 1020 – This bill will accomplish two primary [This bill has passed both houses and is awaiting the Governor’s
objectives: (1) to ensure hospitals make every effort to iden- signature. RMAI and a broad-based coalition is seeking chapter
tify and accept third-party payments from insurance, charity, amendments to this bill that would remove the retroactive na-
or government sources prior to attempts to collect unpaid ture of the law. Realistically, obtaining a veto is unlikely given
debts and (2) to ensure collection agencies and debt buyers the politics of New York State.]
obtain substantive data and documentation from hospitals
related to the debt prior to collection; they inform consumers Continued on next page
of their rights; and provide consumers with documentation
of the debt upon request. [This bill has passed both houses and Fall 2021  RMAI Insights Magazine 35

State Update...continued from previous page Utah HB 394 – This bill would require a creditor or collec-
tion agency to provide a payment receipt to the debtor with-
Bills Failing to Be aDopteD in two business days after receiving a request for a receipt.
[RMAI and other industry groups were able to prevent this bill
California SB 373 – This bill would prohibit a debt buyer from being passed in the Senate after it had unanimously passed
from collecting or attempting to collect a consumer debt if the House.]
the consumer provides documentation to the debt buyer that
the debt or any portion of the debt is the result of economic DaViD reiD, crcp
abuse. [RMAI and other industry organizations raised concerns
on this bill which resulted in the bill be held over until 2022 so General Counsel
amendments can be developed and thoroughly vetted.] Receivables Management
Hawaii SB 1373 – This bill would prohibit wage garnish- Association International
ments during any Governor-declared emergency and for David Reid serves as Director of
60-days after the emergency order has ended. [RMAI issued Government Affairs & Policy for the Receivables Man-
a memo in opposition highlighting that the Governor has the agement Association International (RMAI). In this
power to declare emergencies for relatively small events that capacity, David manages the state legislative, regula-
have no consumer harms associated with them. RMAI suggested tory, and advocacy activities of the association. David
amendments that would tie the bill’s provisions to the COVID also serves as staff liaison to the RMAI Certifi cation
emergency and apply it to only those who have demonstrated a Council and its Standards and Remediation Com-
financial impact would be more appropriate. The bill died in mittees. David is a graduate of Canisius College and
committee.] Albany Law School. He is admitted to the New York
New Hampshire HB 109 – This bill would require an affir- and New Jersey bars.
mative notification prior to referral to collections two weeks
prior to referral of any bill to collection. The bill limits what Legal Update...continued from page 11
can constitute a notification. [Notification requirements prior
to debt collection activities commencing is a new trend in legis- the challenge aheaD
lation in 2021. RMAI struggles with how the prior notification
would not be perceived by a court as an attempt to collect a debt. These challenges compel a reevaluation of current litigation
RMAI opposes these types of requirements as potentially running management and the use of new and sometimes untested
afoul of the FDCPA. The bill died in committee.] litigation strategies. Removal is no longer a strategy to be
New Mexico HB 36 – This bill would among other things: employed as a matter of course for cases alleging violations of
(1) tie wage garnishment exemptions to 40 times the high- the FDCPA and similar federal consumer protection statutes.
est applicable minimum wage; (2) establish an automatic Charting state standing requirements, the deadlines for fil-
$2,400 bank levy exemption; (3) increase various personal ings and state-specific litigation tactics to limit or even elim-
property exemptions; and (4) increases the Homestead Ex- inate claims that are not available in federal courts should be
emption from $60,000 to a range between $90,000 and at the top of your list for projects in 2022.
$180,000. [RMAI and industry partners successfully fought to
reduce the automatic bank levy exemption to $1,500. After the DonalD maurice, crcp
bill was amended, time ran out for bill passage as the legislature
adjourned. We expect this bill will be a high priority in 2022.] Attorney/Managing Partner
Texas HB 4266 – This bill would reign in the unethical busi- Maurice Wutscher, LLP.
ness practices of the credit repair industry by requiring credit Donald Maurice is a partner at
repair organizations to: (1) obtain the express written autho- national financial services law firm
rization from consumer clients to communicate on their be- Maurice Wutscher LLP. For nearly 30 years, Don has
half; (2) disclose their identity in the communication and counseled the financial services industry in defense and
not impersonate the client; (3) provide sufficient information compliance matters. He has litigated in bench and jury
to investigate a dispute of an item related to an extension trials in both individual and class actions, appearing
of consumer credit; and (4) provide an itemized monthly before federal Circuit Courts of Appeals and as amicus
statement to the client of services provided. [RMAI retained counsel before the U.S. Supreme Court.
a Texas lobbyist to work with an industry coalition to support the
passage of this legislation. The bill missed the crossover deadline
given extensive lobbying by the credit repair industry.]
36  RMAI Insights Magazine  Fall 2021

is now

Our name has changed.
Our dedication has not.

Making Receivables Management INTELLIGENT

www.finvi.com

Fall 2021  RMAI Insights Magazine 37

Outsourcing Tips...continued from page 15 michael BeVel

5) Don’t Forget internet searches anD Legislative Analyst
social meDia searches Ballard Spahr LLP
Michael Bevel is a legislative analyst
Make Internet searches and social media searches a part of in Ballard Spahr’s Consumer
your due diligence process. Searching publicly available sites Financial Services Group and Privacy & Data Security
like Reddit or Twitter can give you a lot of additional infor- Group. Mike manages the firm’s consumer collections,
mation. (And not just about the company you are looking to credit reporting, and privacy/data security legislation
onboard.) Not every consumer will take the time to go to the trackers. Prior to joining Ballard, he spent 15 years
CFPB’s website, fill out the form, and submit a complaint. covering the consumer debt industry and financial
More likely, they will turn to social media and the court of regulatory compliance.
public opinion.
steFanie Jackman
“Searching for a company’s name
online can bring up a wealth of Partner
information: posts about perceived Ballard Spahr LLP
bad behavior, posts about successes Stefanie Jackman is the leader of
against a collection agency, or posts Ballard Spahr’s Debt Collection
by predatory plaintiffs that were Team and a member of the firm’s Consumer Financial
able to trick collection agencies Services Group. Stefanie’s practice is devoted to repre-
into tripping on loopholes senting clients across the financial services industry in
,,in the law. connection with government investigations and exam-
inations, consumer litigation, and resolving complex
Searching for a company’s name online can bring up a wealth compliance issues.
of information: posts about perceived bad behavior, posts
about successes against a collection agency, or posts by pred- kim phan
atory plaintiffs that were able to trick collection agencies into
tripping on loopholes in the law. Make sure to also read the Partner
replies and comments to these posts. The consumer debt in- Ballard Spahr LLP
dustry is not one that has a lot of consumers praising collec- Kim Phan is a partner in Ballard
tion agencies; so while most results are going to be critical, Spahr’s Consumer Financial Ser-
some complaints may give legitimate insight into systemic vices Group and Privacy & Data Security Group. Kim
issues with a vendor. counsels ARM industry clients on GLBA, FCRA,
TCPA, and other federal and state privacy and data
Bonus tip: Be eager aBout curiosity security laws and regulations, including CCPA.

A vendor that you are looking to outsource to for collections
that shows the same interest in your company is probably a
company you should want to do business with. It means that
they are as focused on compliance and mitigating vicarious
liability as you are. It means that they take the outsourcing
risk seriously. And it is that attention to detail that is going
to provide the solid foundation for a long-lasting, compliant
relationship.

38  RMAI Insights Magazine  Fall 2021

IT’S TIME TO RENEW YOUR
RMAI MEMBERSHIP FOR 2022!

MAXIMIZE YOUR
MEMBERSHIP

Visit the online membership
directory: Reach out to other
members and build your network

Get involved in advocacy: We
share tips in our new toolkit

Join a committee: Help shape
programs and work with other
members

Get the 411: Read the exclusive
Member Alerts, e-newsletter, and
magazine

Work with highly compliant
certified businesses: Find a
Certified Business on the RMAI
website

Author an article or be a
speaker: Share your knowledge
or expertise

Be a sponsor: Get recognition
for your business

Be an exhibitor: Showcase your
product or service

EARN EDUCATION & HOW TO RENEW
CERTIFICATION
1) Review the invoice you received by email or in the mail
Free Monthly live and recorded 2) Add or revise Additional Membership Representatives if
webinars: Now available free to all
your employees needed
3) Add a voluntary contribution to the RMAI Legislative Fund
CE credits for the Receivables 4) Renew online at rmaintl.org using your member login
Management Certification
Program: Offered for all RMAI live Call (855)562-9863 to authorize credit card payment by phone
and recorded webinars and or request ACH payment information
in-person events. Get your business Mail your renewal to RMAI, 1050 Fulton Avenue, Suite 120,
certified and become individually Sacramento, CA 95825
certified.
Questions? Contact RMFaAllI 2a0t2in1 [email protected] a(9ga1z6in) e4 823-29462.
CLE credits offered at the RMAI
Annual Conference

Financing Debt...continued from page 24 phisticated debt buyers evidence consistent performance
▶ Negatives: Up-front fees, unlimited profit share, and accuracy in both pricing and projection of liquida-
tions to access this level of funding.
potential pricing limitations. Typically operate as a ▶ Interest Rates: 5.25% - 6.5%
“cash trap” requiring all collections received over-and- ▶ Advance Rates: 80% (75% - 90%)
above an allowed servicing cost to be applied to an ▶ Positives: Can access large amounts of funding at
accelerated loan repayment. Market familiarity and
broad client base could limit your ability to purchase a low cost
if lender’s other clients are pursuing the same or simi- ▶ Negatives: Prefunding costs, diligence, docu-
lar portfolios.
▶ Quali cations: Collection expertise, track record, mentation can cost a lot in time and money. It
some equity participation can take time to have all participants fund their
portion, leading to frustrating delays in closings.
Hedge Funds Very data intensive.
Hedge funds typically seek access to this market and available ▶ Quali cations: Highly sophisticated reporting
returns without direct ownership. Through every market cy- and analytics with a long-term track record of
cle, the charge-off market has continually attracted hedge accurately predicting collection curves.
funds. In order to put capital to work in the charge-off sec- Securitization
tor, funds need partners that have the necessary licenses, ex- Buyers can finance (or refinance) an existing book of busi-
pertise, and history to price and collect accounts. ness through term securitizations.
▶ Positives: Relationship can grow with your portfolio. ▶ Interest Rate: 6%
▶ Advance rate: 85%
Repayment waterfalls often are structured more like ▶ Positives: Secured financing which allows for regular
a typical loan with level amortization or based on the payments, some profit taking and certainty. Access
expected future value of the collateral. Buyers can to ABS market, which has almost unlimited funding
redeploy excess cash as haircut money in other trans- capabilities
actions or take as profits. General flexibility – buyer is ▶ Negatives: Time consuming and expensive to execute.
underwritten, not the individual transaction. Many third-party fees, including legal, banking, rating
▶ Negatives: Long approval cycle. May exit business in agencies, diligence, etc.
times of headline risk. Terms can accelerate repay- ▶ Example: Jefferson Capital Holdings LLC ($300m
ments if covenants not met. Senior Note (US472481AA80), fixed rate (6.00% cou-
Local Bank Lines pon) maturing on 15 August 2026, priced at 100.00
Smaller banks lend to debt buyers in their market area. They (original spread of 528 bp), callable (5nc2).
usually require a holistic banking relationship, including de- Today’s debt buyers are using one or more of the above fi-
pository, checking, and trust account relationships. These nancing sources in one form or another. Given the con-
banks can be a source of attractively priced debt. Each pur- strained supply of debt AND recent market tumult, buyers
chase is usually presented individually to the bank for under- are seeking every competitive advantage – and cost of cap-
writing and financing. These banks can be good long-term ital can be a serious competitive advantage. Every buyer
partners but are subject to regulatory pressure if examiners should be asking themselves the following questions:
are unfamiliar with the product. ▶ How can I position myself to be the first choice for
▶ Interest Rates: 5% – 7% (Usually adjustable, based on
Prime or Libor) any seller?
▶ Advance Rates: 65% – 75% ▶ How can I lower my cost of capital / increase my
▶ Positives: Attractive rates and repayment terms
▶ Negatives: Inconsistent – any deal may get turned availability and flexibility of capital to pay competi-
down by bank management. High maintenance; they tive prices?
do not understand the space and need to be educated, ▶ What do I need to do to demonstrate that my plat-
re-educated, and informed of every market change. form is a good risk when times are good AND when
▶ Example: Low: Libor + 4 or PR+ 1 ½ (6 floor)Average markets are a bit more tumultuous?
= L + 5 ¼ or PR + 2 The answer to the first question should be reflexive for all
Syndicated Bank Lines debt buyers; it’s a simple breakdown of your DNA.
When a purchaser’s needs exceed the amount an individu-
al bank is willing to lend, a lead bank can arrange a larger
financing facility that may be shared, or syndicated. So-

40  RMAI Insights Magazine  Fall 2021

The second and third questions are a bit more complicated, ▶ Despite a spike in unemployment, payment rates
but ultimately boil down to a few basic elements: went up (typically higher unemployment is directly
correlative to lower payment rates and vice versa)
▶ Sophisticated reporting: the ability to show initial
projections, actual collections, and variances (both ▶ Despite massive increases in jobless rates, charge-off
periodic and cumulative). rates decreased

▶ A track record of consistent performance vs. what ▶ Performance on aged portfolios was materially en-
was originally modeled. hanced

▶ Multiple asset types with consistent performance. anDy carlson, crcp
▶ Passage of time.
All types of lenders are looking for two things; staying out Managing Director
of the headlines and consistent, predictable returns. They Garnet Capital Advisors, LLC
are seeking data and are willing to make bets on reliable Andy Carlson is the head of Garnet’s
data. Consistency in actual performance relative to model- Charged-Off and Bankruptcy Loan
ing over time is key to convincing the “next step-up” lender Sales Group. Since joining Garnet in 2012, Andy has
to underwriting your business. managed the sale of over $10 billion of loan portfo-
While as an industry we have never experienced anything lios in the U.S. and Puerto Rico. Overall, Andy has
like the most recent events, the industry has been through presided over the execution of more than $35 billion
some very trying changes – and flourished. Each massive in consumer-loan sales, purchases and corporate capital
change started with a dire prediction that may have caused transactions. Prior to Garnet, Andy served as the Di-
a hiccup, but ended up working for the better. A few exam- rector of Portfolio Management for Jefferson Capital
ples of this are: Systems.
BAPCPA: General concern that this would backfire and be
creditor unfriendly. In the short-term, bankruptcies did louis Dipalma
spike and dropped precipitously, but quickly stabilized. It
was a “great data reset” for the industry; leveling the play- Managing Partner
ing field for purchasers. Instead of one dominant player Garnet Capital Advisors, LLC
having all of the data, the lack of new data allowed several Lou DiPalma has 30 years of expe-
new participants to enter the space - which created a vi- rience as a loan portfolio broker on
brant and efficient market. Wall Street and at Garnet Capital. In 2020 Garnet has
CFPB Formation and Chase Consent Order: Both sold over $6 billion of performing and nonperforming
seemed draconian and caused several costly changes to the portfolios available from Banks, Credit Unions, Fin-
industry (including industry consolidation). The result Tech, Subprime Auto, Elective Medical, Mortgage and
was a dramatic improvement in the quality of debt and de- other sellers.
liverables provided from creditors to buyers. While pricing
was expected to drop precipitously, it actually went up due Fall 2021  RMAI Insights Magazine 41
to better quality originations and better debt sale practices.
Major creditors suspend sales. Inventory is depleted. Buy-
ers quickly adjusted by moving into alternative assets, Fin-
tech lenders emerged.
Pandemic: Constrained supply, repossessions and foreclo-
sures halted, litigation severely curtailed. Liquidation rates
rise.
While these events are a decade+ in our rearview mirror,
they should serve as reminders that there have been sever-
al pivotal moments where the industry not only survived,
but the survivors thrived. Staring down the barrel of un-
certainty of the current times, the industry has already ob-
served unexpected manifestations of positive phenomena:

42  RMAI Insights Magazine  Fall 2021

Fall 2021  RMAI Insights Magazine 43

Collector Training...continued from page 27

Negative Phrases Positive Phrases Negative language is just one part of the equation. The next
“No, I can’t do that.” “That’s a great question…” strategy agencies can train their teams on involves connec-
tion.
“I’m sorry, but that’s against “I completely understand 2. Bring Humanity Back into the Process
our company’s policies.” that you want to get this Maya Angelou famously said, “I’ve learned that people will
forget what you said, people will forget what you did, but
taken care of…” people will never forget how you made them feel.” While this
quote may seem appropriate in the personal development
“Unfortunately, payment in “I can see how challenging realm, it also teaches a beneficial lesson in business.
full is due…” this is for you…” According to research by Elizabeth A. Kensinger, a profes-
sor of psychology at Boston College, people remember ex-
The reason validating the consumer’s feelings rather than periences attached to strong emotions more than any other
discussing policies is effective is because it allows the con- experience. This means that when consumers have extremely
sumer to feel heard and understood. According to psychol- negative or extremely positive experiences with an agency,
ogist Leon F. Seltzer, all humans have a universal emotional their memories of those interactions will stick, which could
need to feel heard and understood by the people they interact influence their future actions. For instance, if a consumer has
with. This means if a consumer doesn’t feel heard and under- an extremely negative interaction with an agency, they may
stood, they won’t be able to move on in the conversation, and be more prone to file a lawsuit. Whereas if a consumer has an
they’ll develop negative emotions. If they’re upset enough by extremely positive experience, they may decide to pay in full,
the situation, or they feel their needs weren’t heard, they may write a positive Google review, or simply say “thank you” to
even resort to a lawsuit. a supervisor.
The best way to start incorporating new phraseology at an A great way to create these positive consumer interactions
agency is by pre-scripting the top 10 stalls and objections is to focus on the power of human connection. When con-
that collectors hear daily. Creating go-to scripts that don’t in- sumers and collectors connect, the conversation will stay on
clude negative phrasing will empower collectors to interact
with consumers easily without inciting the conflict that can
lead to lawsuits.

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44  RMAI Insights Magazine  Fall 2021

a positive track because the consumer will have space to de- wants to see them survive and thrive. When these positive
velop the trust they need to pay their account, and a collector connections are established, the chances of a consumer want-
will feel at ease to navigate the conversation from start to ing to sue an agency begin to decrease. After all, if a collector
finish. is focusing on connection-building language, especially lan-
guage that has been pre-scripted to match an agency’s stan-
To train collectors to create deep connections with consum- dards, they’re far less likely to violate any policies or create
ers, agencies can teach them to implement phraseology that conflicts that could lead to lawsuits.
instills hope and promotes a positive consumer experience. Once collectors have developed connection-building skills,
This is actually quite simple; a collector can say just a few agencies can finally focus on the last strategy to decrease law-
words to instill that sense of hope. A few examples are… suits: investing in professional development.
3. Invest in Professional Development
• “The good news is…” Professional development comes in all shapes and sizes. For
• “I can assure you…” example, investing in leaders by taking them to industry con-
• “I’m happy to help you take care of this.” ferences can be instrumental in teaching new concepts and
These phrases are a simple way to let the consumer know the renewing motivation and morale.
collector is there to help them. Instead of viewing an agency In addition to travel-based professional development, in-
as an enemy, a consumer will see the agency as an ally who house professional development is also extremely beneficial
for employees outside of the leadership team. One Forbes
Negative Phrases Positive Phrases article states that team members need continuing profession-
“I’m just doing my job.” al development to keep their skills sharp and current with
“All I can do for you is…” “You’re in great hands with changing times. This means that when agency owners and
our agency.” managers bring professional development to their collection
“We need to get this taken “I am confident we have
care of…” solutions that will work for Continued on next page
you.”
“I’ve got great news!”

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Collector Training...continued from previous page

floors, they’ll empower their collectors to build their confi- Collectors who know how to negotiate can incorporate com-
dence in their job performance and keep them motivated to pliance guidelines into their negotiations with consumers. In
perform well. other words, once a collector has
a negotiation technique mas-
The best part is the digital age “It’s time to face new regulatory tered, the other aspects—like
makes professional develop- requirements like Regulation following FDCPA guidelines—
ment more affordable and at- F head-on with confidence and will be easier to focus on. Teach-
tainable than ever. Projections ing collectors simple techniques
Inc. shows that e-Learning ,,strategies to avoid lawsuits and like top-down negotiation is
decreases professional devel- increase success. an extremely beneficial form of
opment costs significantly be- professional development that
cause it doesn’t require travel collectors can use for years to
expenses. Also, online cours- come to increase their overall
es are typically less expensive confidence and revenue on col-
across the board because they lection calls without breaching
don’t require a physical location compliance guidelines.
to maintain. That means agency owners can find online pro-
grams that specifically fit the needs of their company without Professional development can be unique to each agency’s
the high price tag that outside trainers or classroom-based needs, so if an agency needs to be refreshed on just one of
development typically come with. these three items, they can do a deep dive into that instead
of all three. The best part is, when collectors feel invested in,
In debt collection specifically, agency owners and managers they’re more likely to stick around long-term, which is just a
can focus on three key areas for collector development: com- bonus on top of the decreased lawsuits.
munication, critical thinking, and negotiation. These three
skills equip collectors with the tools they need to handle stalls
and objections while remaining compliant. the power oF three

Communication training specifically encompasses the other Using all three training strategies outlined above—eliminate
two strategies outlined above. When collectors know what negative language, bring humanity into the process, and
to say, when to say it, and how to say it, no matter what investing in professional development—can ultimately cut
roadblock comes up on a call, they’re able to avoid compli- down on the three causes of lawsuits and empower collectors
ance violations and conflict, which is much more challenging to treat consumers with empathy and compassion in 2021
without a communication strategy. and beyond.

Also, Forbes states that when an entire team of collectors has It’s time to face new regulatory requirements like Regulation
a consistent way they communicate, lawsuits naturally de- F head-on with confidence and strategies to avoid lawsuits
crease. After all, consistency cuts down on the outlier calls and increase success. Every agency has what it takes, and these
that end in violations or conflict since all collectors are echo- strategies are simply a jumping-off point to start the journey.
ing the same sentiments on every call with every consumer.
Critical thinking is just as important as communication. Ac- mary shores
cording to Indeed.com, critical thinking “helps people better
understand themselves, their motivations and goals.” In debt Speaker, Author & CEO
collection, allowing collectors to understand the motivations Shores Communications
behind every conversation teaches them to problem-solve Mary Shores is a second-generation
more effectively. For instance, if a collector knows a consum- collection agency owner, a bestsell-
er doesn’t want to pay because they’re waiting for their un- ing author, and an international speaker. Her current
employment benefits to start, the collector can use critical passion in life is promoting collector training and de-
thinking skills to come up with a list of solutions that will velopment through The Collection Advantage online
work for the agency and the consumer’s current financial sit- training program, which features Mary’s extensive stud-
uation. The result is a happier consumer and a solution that ies into neuroscience and compassion to teach collectors
follows compliance and agency guidelines. how to execute high-converting, empathetic scripting.
Negotiation is often forgotten about in debt collection, yet
it can truly make or break a conversation with a consumer.

46  RMAI Insights Magazine  Fall 2021

Statutes of Limitations...continued from page 17 es, however, the statute of limitations is tolled only if it expires
The bottom line on accrual dates is that the attorney calculat- during the event. Furthermore, it doesn’t stop running
ing the statute of limitations absolutely must have a thorough entirely. For example, a creditor must bring suit within 30
understanding of the creditor’s internal processes in addition days of the termination of military service if the statute of
to the applicable law. limitations expires during a period of active duty.
Is there an applicable borrowing statute? Having identified
the applicable law, either through written agreement or by Tolling of the statute essentially presses “pause” during the
selecting the forum in which to file, the next step is to deter- middle of the statute period and extends the applicable stat-
mine whether the state has a borrowing statute. A borrow- ute of limitations expiration accordingly. That can be very
ing statute effectively borrows a shorter statute of limitations helpful for creditors and firms; however, these circumstances
from another jurisdiction in which the action arose or could are highly nuanced and require significant factual circum-
have been brought. stances to be in place. Often the unstructured nature of these
From what forum would your borrowing statute borrow? facts leads them to be unreliable for most inventory.
Although intended to discourage forum shopping, borrow-
ing statutes in many states are becoming “Gotcha!” issues for Does your client place additional restrictions on statutes
debt collectors. Borrowing statutes will typically borrow the of limitations? In an abundance of caution, some creditors
statute of limitations from the forum in which the action will not treat a statute of limitations as being extended even
“arose,” but there is an increasingly diverse environment of where the law may permit it. For example, the statute of lim-
case law on where causes of action “arise.” In order to apply itations may restart after a consumer makes a voluntary pay-
a borrowing statute to your particular claims, you will need ment on a debt that is already in default, but the creditor may
to determine from what state you could be “borrowing” the not wish to extend the statute of limitations calculation on
statute of limitations. that basis for fear that soliciting partial payments on default-
Courts cannot seem to agree on where the cause of action ed debt for the purpose of extending the statute of limitations
“arose” for purposes of borrowing statutes. A notable exam- might be considered an unfair or deceptive practice. A credi-
ple of this is Taylor v. First Resolution Inv. Corp., in which the tor may not want to file suit against a recently separated mil-
Ohio Supreme Court determined that the cause of action itary service member because it is not possible to complete
accrued in Delaware, where the creditor was headquartered the g-notice and validation period within the 30 days allowed
(and therefore, presumably, suffered the injury) and where under the Servicemembers Civil Relief Act. Some creditors
the consumer made her payments. Conveniently, both the may adhere to the shortest possible statute of limitations just
headquarters and the payment location were in the same fo- to avoid the possible issues with choice of law and borrowing
rum, because the court didn’t indicate which fact was dis- statutes. In these instances, the restrictions placed by the cli-
positive. The New York Supreme Court, on the other hand, ent may constitute an entirely separate calculation from the
determined that the borrowing statute would use the statute legal analysis.
of limitations where the creditor has its principal place of
business (Portfolio Recovery Assocs., LLC v. King, 927 N.E.2d Jessica lamoreauX
1059 (N.Y. 2010). It’s worth noting that the New York courts
have held that the borrowing statute overrides choice-of-law Director of Compliance
clauses, so a contract that chooses New York law will still be Lawgix Services, LLC
required to borrow the statute of limitations from the state Jessica Lamoreux is Director of Com-
in which the creditor’s principal place of business is located. pliance at Lawgix Services, LLC. She
Understanding and applying a borrowing statute depends al- is an attorney licensed in the State of Ohio and has over
most entirely on properly understanding how the applicable ten years of experience in the collection industry.
case law identifies the state from which to borrow.
Was the Statute of Limitations tolled? Once the proper
accrual date and statute of limitations period have been es-
tablished, the calculation for the expiration of the statute of
limitations is quite simple. However, there are circumstances
where the statute of limitations on some types of claims may
be tolled by various events that impede a creditor’s ability to
sue. The most common examples of tolling events are mili-
tary service, bankruptcy, and incarceration. In most instanc-

Fall 2021  RMAI Insights Magazine 47

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48  RMAI Insights Magazine  Fall 2021

Certified Businesses

Current for September, 2021

Absolute Resolutions Corp. Galaxy International Purchasing, LLC Portfolio Group Investors, LLC
Absolute Resolutions Investments Galaxy Portfolios, LLC Portfolio Recovery Associates, LLC
Accelerated Inventory Management, LLC Galbo Sims Holdings LLC Poser Investments, Inc.
Accelerated Portfolio, Inc. Garnet Capital Advisors, LLC PYOD, LLC
Accounts Receivable, Inc. General Collection Co. Quantum3 Group, LLC
Acctcorp International, Inc. Genesis Recovery Services RAzOR Capital, LLC
Admin Recovery, LLC Gurstel Law Firm P.C. Recovery Management Solutions LLC
ALCO Capital Group LLC Halsted Financial Services, LLC Red Target, LLC dba SCJ Commercial
Ashley Funding Services, LLC Hilco Receivables, LLC
Atlantic Credit & Finance, Inc. HS Financial Group, LLC Financial Services
Autovest, LLC Icon Equities, LLC Resurgence Capital, LLC
Axiom Acquisition Ventures, LLC Indiana Receivables, Inc. Resurgence Legal Group, PC
BCG Equities, LLC Integras Capital Recovery LLC Resurgent Acquisitions LLC.
B-Lo, LLC Interim Capital Group, Inc. Resurgent Capital Services, LP
C & E Acquisition Group, LLC Invenio Financial, a Phillips & Cohen Resurgent Holdings, LLC
CACH LLC Resurgent Receivables LLC
CACV of Colorado, LLC Associates company River Heights Capital, LLC
Capio Investment Retrievers, Inc. Salander Enterprises, LLC
Cascade Capital, LLC JCAP Funding LLC SAM, Inc. - Solutions for Account
Cavalry Investments, LLC Jefferson Capital Systems, LLC
Cavalry Portfolio Services, LLC Jormandy, LLC Management
Cavalry SPVI, LLC Kino Financial Co., LLC Scott & Associates, PC
Cavalry SPVII, LLC Klima, Peters & Daly, P.A. Second Round, LP
CKS Financial Landmark Strategy Group, LLC Security Credit Services, LLC
CKS Prime Investments Lawgix Lawyers, LLC Sherman Acquisition, LLC
Coastal Settlement Recovery Inc. LCS Capital, LLC Sherman Originator III, LLC
Collins Asset Group LLC LCS Financial Services Corporation Sherman Originator, LLC
Company Name Lippman Recupero SMS Financial, LLC
Connect1, LLC Livingston Financial LLC Spire Recovery Solutions, LLC
Consuegra & Duffy, PLLC Logicoll, LLC SPP Inc.
Consumer Adjustment Company, Inc. LVNV Funding, LLC Spring Oaks Capital SPV, LLC
McNall & Associates P.C. Spring Oaks Capital, LLC
(CACI) Mendiratta Consulting Company Standard Equity Group
Converging Capital, LLC Metacorp, LLC Steel River Systems, LLC
Credit Corp Solutions Inc. Michael Andrews & Associates Stenger & Stenger P.C.
Crown Asset Management, LLC Mid Atlantic Portfolios, LLC Stone, Higgs & Drexler
Dalty Acquisitions, Inc. Midland Credit Management Strategic Alliances, Inc
Debt Recovery Solutions, LLC Midland Funding LLC Superlative RM
Debt Solutions LLC Mjollnir Group, Inc. Synergetic Communication Inc
Distressed Asset Portfolio III Mountain Run Solutions, LLC T & I Enterprises, LLC
Diverse Funding Associates LLC National Debt Holdings, LLC Tag Process Service, Inc.
DNF Associates LLC National Loan Exchange, Inc. TEM Capital, LLC
Dobberstein Law Firm, LLC National Recovery Solutions, LLC The Axiom Group
Duke Capital, LLC NCB Management Services, Inc. The Bureaus, Inc.
Dyck-O’Neal, Inc. NDS, LLC The Cadle Company
eCAST Settlement Corp. NMRC Troy Capital, LLC
Encore Capital Group, Inc. O & L Law Group TrueAccord
EverChain Oak Harbor Capital, LLC Unifund CCR LLC
Federal Pacific Credit Company, LLC Orion Portfolio Purchasing, LLC Unifund CCR Partners
First Financial Asset Management Orion Portfolio Services II, LLC Unifund Corporation
Orion Portfolio Services, LLC United Holding Group
FFAM 360 Paragon Capital LLC Universal Fidelity LP
First Financial Investment Fund Paramount Recovery Systems Velo Law Office
Pharus Funding, LLC Velocity Investments, LLC
Holding, LLC Pilot Receivables Management, LLC Velocity Portfolio Group, Inc.
First Financial Portfolio Services, LLC Pinnacle Credit Services, LLC Velocity Servicing, LLC
Forsythe Finance Plaza Services, LLC World Credit Fund III LLC
Frontline Asset Strategies, LLC PMGI, LLC World Credit Recovery LLC
Galaxy Asset Purchasing, LLC Worldwide Asset Purchasing II LLC
Galaxy Capital Acquisitions, LLC
Galaxy Capital Recoveries, LLC Fall 2021  RMAI Insights Magazine 49

Association Q&A...continued from page 13 members are looking forward to a greater amount of normal-
on time, thereby impacting their credit report later? Those cy in everyday life. Restrictions that hinder our ability to
kinds of shocks to the system could lead to greater legislative serve borrowers at the highest and most effective level are the
efforts to suppress credit information. most concerning.
What items in Reg F will have the most significant im-
anDrew Duke pact on your members? While most of our members are
not covered directly by FDCPA, OLA’s Code of Conduct
Executive Director requests members’ compliance when engaged in collection
Online Lenders Alliance (OLA) activity. Fundamentally, I believe that the CFPB’s decision
to move forward with the 2020 debt collection rules was a
Can you please give a brief overview good decision and those who engage in collection activity
of your organization and characterize your membership will need to be especially mindful of communications activi-
base? The Online Lenders Alliance (OLA) is the first trade ty and time-barred debt.
association in FinTech. OLA is focused on credit inclusion, What items are of most significance at the Federal regula-
bringing together a diverse group of innovative companies tory level for your members currently? In the wake of the
who share a common goal: to serve hardworking Americans passage of the Congressional Review Act on the OCC’s ‘True
who deserve access to trustworthy credit. Our members are Lender’ rule, the resulting uncertainty and divergent defini-
entrepreneurs, publicly-traded companies, lenders, credit bu- tions of the ‘true lender’ standard in bank-fintech partner-
reaus, advertisers, lead generators, compliance professionals, ships makes the marketplace more challenging. Also, OLA is
and software developers who are leveraging technology to deeply opposed to legislation that would eliminate access to
responsibly improve consumers’ financial health. Consumer credit for millions of Americans and implement a federal per-
protection is our top priority and OLA members abide by a centage rate (APR) cap on consumer loans. New survey re-
rigorous set of Best Practices and Code of Conduct to ensure search finds that nearly one-third (31 percent) of all adults—
consumers are fully informed and fairly treated. including half of all Black adults (50 percent)—have been
What have been the biggest challenges for your members denied credit when they needed it. Many of these borrowers
due to the COVID pandemic? Economic uncertainty and earn working class wages and may have thin or poor cred-
adapting to a fast-changing market. Overall loan volumes it. They have difficulty obtaining credit from conventional
were lower while payments increased - a trend seen in other sources like banks or credit unions, and they have found a fi-
financial products, like credit cards. nancial lifeline through fintech. APR caps will eliminate this
Like many businesses, online lenders have had to adapt lifeline and leave consumers worse off with fewer options.
during the global pandemic—both in terms of what they How do your organizations monitor, prioritize and ad-
are able to offer new customers seeking access to credit and vocate for State level regulatory issues? We offer various
financial options as well as existing customers who may be special committees to help serve our members. One of those
experiencing income shortfalls and difficulty meeting their is on state issues. This committee is made up of our staff,
obligations. consultants, and member companies who all closely monitor
That said, online lenders have led the way in modifying col- state legislative activity. When necessary, we engage with ad-
lection efforts to help consumers. For example, our members vocacy efforts in select states.
have worked tirelessly to help customers get through these What do you believe poses the biggest challenge for your
tough times, including loan forgiveness, loan forbearance, membership in the next 12-18 months? Outside of mis-
loan modifications, extending payment plans, waiving fees, guided regulatory and legislative actions, I believe over the
pausing collection activities, and extending customer sup- next 12 months our biggest challenge will be continuing to
port hours. cope with the uncertainty and unique challenges posed by
Lenders have worked tirelessly and proactively with con- COVID-19 and the impact of government responses at all
sumers to ensure timely payments on debt obligations. As levels.
a result, delinquency rates in most consumer debt markets
declined in 2020. Moreover, research shows that financial as- RMAI continues to work with these and other financial service
sistance was more prevalent in areas with more COVID-19 associations to address issues of mutual concern and interest.
cases or where unemployment rates were higher than normal. As evidenced by this Q&A, we share similar concerns for the
What kinds of pandemic restrictions are your members implementation of the new debt collection rule, uncertainty
most concerned about becoming permanent and/or hav- and challenges posed by COVID-19, the impact of government
ing a long-term impact on their businesses? OLA and our responses, and the potential breakdown of particular markets.
50  RMAI Insights Magazine  Fall 2021