RMAI Update December 2023

As Congress heads into the holiday recess, there has been a flurry of activity on Capitol Hill amidst announcements that former Speaker McCarthy and HFS Chair McHenry will be retiring. Importantly, the National Defense Authorization Act (NDAA) which is a ‘must pass” piece of legislation passed Congress last week and is headed to the President’s desk for approval.  The companion legislation, the defense appropriations bill will need to pass Congress by the beginning of February.  RMAI is working closely with our sister organizations to make sure language harmful to the industry is not included in the final bill.

The week of November 27^th, CFPB Director Chopra appeared before the House Financial Services Committee and the Senate Banking Committee for his Semi-Annual Report to Congress.  Links to the hearings can be found here:  HFS and Senate Banking.  RMAI submitted Questions for the Record for both hearings.  We await responses.

On the regulatory front, the CFPB regulatory agenda was released.  The FCRA rulemaking is in the Prerule Stage.  SBREFA hearings were held last month and it is anticipated that the CFPB will issue a proposed rule in the spring of 2024.

The CFPB has issued a proposed rule on personal financial data rights.  RMAI submitted comments at the ANPR stage and will submit comments again now that the proposed rule has been published. Comments are due December 29^th.

RMAI monitors, tracks, and responds to legislative and regulatory activity in all 50 states as the need arises.  Backed by RMAI’s State Legislative Committee and a team of state lobbyists, RMAI educates legislators and regulators about the industry and the negative impacts or unintended consequences a bill would have on businesses and consumers. If you have an interest in volunteering in RMAI’s grassroots advocacy efforts, please contact RMAI General Counsel David Reid at (916) 779-2492 or [email protected]. The following is a sample of the legislative activity over the prior month that has direct impact on the industry:

California AB 1414 [Chapter 688 of the Laws of 2023] Effective: January 1, 2024 – This law provides that in actions for the collection of consumer debt, common counts may not be used. This effectively will force all litigation through a contract theory for litigation. Common counts include book account and account stated, among other claims. For purposes of this section, “consumer debt” means any obligation or alleged obligation, incurred on or after July 1, 2024, of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services that are the subject of the transaction are primarily for personal, family, or household purposes and where the obligation to pay appears on the face of a note or in a written contract. [RMAI and an industry coalition had actively opposed this legislation.]

Michigan SB 408 – This bill would among other things: (1) increase the garnishment exemption from 30x federal minimum wage to 80x state minimum wage; (2) limit garnishment to 10% of earnings in excess of the garnishment exemption and then 15% of any earnings over $1,200; (3) create a wild card exemption up to $17,000; (4) eliminate all tax garnishments for judgments obtained pursuant to a “consumer debt;” and (5) increase the homestead exemptions from $35,000 to $250,000 ($350,000 for seniors and those with disabilities); and (6) increase various property exemptions including for automobiles, household goods, tools of the trade, agricultural, etc. [RMAI and an industry coalition are vigorously opposing this bill. RMAI has retained a Michigan lobbyist. RMAI met with the bill sponsors and key legislators on October 24^th and 25^th to express our concern. This bill will carry over into 2024. We suspect the earliest it could be considered is in April. In the meantime, RMAI will continue to express our concerns with the existing text.]

Minnesota SB 2744 [Chapter 57] Effective: January 1, 2024 – This law, among other things, adopts provisions related to coerced debt [see, sections 69-73 (pages 153-158)]. Coerced debt is when all or a portion of debt in a debtor’s name that has been incurred as a result of: (1) the use of the debtor’s personal information without the debtor’s knowledge, authorization, or consent; (2) the use or threat of force, intimidation, undue influence, harassment, fraud, deception, coercion, or other similar means against the debtor; or (3) economic abuse perpetrated against the debtor. To make a claim of coerced debt, the debtor must be a victim of domestic abuse, harassment, or sex or labor trafficking. A debtor must, by certified mail, notify a creditor (includes debt buyers) that the debt or a portion of a debt on which the creditor demands payment is coerced debt and request that the creditor cease all collection activity on the coerced debt. The notification and request must be in writing and include documentation. The creditor, within 30 days of the date the notification and request are received, must notify the debtor in writing of the creditor’s decision to either immediately cease all collection activity or continue to pursue collection. If the creditor does not cease collection, the debtor may bring an action against the creditor. [RMAI generally takes a “no position” with bills of this nature. Banks often look for a provision in the legislation that requires an affidavit and the ability to seek payment from the perpetrator of the abuse.]

Proposed Amendments to the New York City Debt Collection Rule – The New York City Department of Consumer and Worker Protection (DCWP) is proposing amendments to their Debt Collection Rule which would among other things: (1) provide an effective date that would take effect immediately upon adoption; (2) add extensive requirements that dictate how data associated with consumer communications is to be maintained; (3) require specific consumer notices which do not align with state requirements; (4) require maintaining the supporting data and documents when a judgment has been entered; (5) add provisions related to medical debt; and (6) create a date for itemization which is in conflict with state and federal provisions. [RMAI has retained a NYC lobbyist to help us seek amendments that are reasonable and can be operationalized by the industry. RMAI submitted our concerns in comments submitted to DCWP on November 29, 2023.]

Ninth Circuit Holds No Personal Jurisdiction Over Web-Based Platform Provider
Briskin v. Shopify, Inc., No. 22-15815, 2023 U.S. App. LEXIS 31383 (9th Cir. Nov. 28, 2023)

A California consumer used his iPhone to make an online purchase from a California-based retailer.  Unknown to the consumer, the retailer’s website used a vender’s payment processing platform, and the vendor collected the consumer’s personal information, installed cookies on his phone, and stored the information for later analysis. The vendor “used the customer information it received to create consumer profiles, which [it] also shared with its merchant and other business partners.”

The consumer filed a putative class action “alleging that [the vendor] violated various California privacy and unfair competition laws because it deliberately concealed its involvement in the consumer transactions.  The vendor was Canadian based, and to support personal jurisdiction the consumer alleged the vendor directly contracted with California merchants, opened a physical location in Los Angeles, had a fulfillment center in California, and had a quarter of a subsidiary’s employees in California, among other things.  Nevertheless, the trial court granted the vendor’s motion to dismiss without leave to amend and the consumer appealed.

Describing it as a case of first impression, the U.S. Court of Appeals for the Ninth Circuit summarized the issue as “whether defendants’ extracting and retaining of consumer data and their tracking of customers exposes them to personal jurisdiction in California, where a consumer made his online purchase.”

The Court explained that personal jurisdiction can be general or specific, and in this case focused on specific jurisdiction which requires:

First, the defendant must either purposefully direct his activities toward the forum or purposefully avail himself of the privileges of conducting activities in the forum; second, the claim must be one which arises out of or relates to the defendant’s forum-related activities; and third, the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable.

To meet the first prong, a defendant must, among other things, have committed an intentional act “expressly aimed at the forum state,” which in turn depends on whether a defendant’s contacts are relevant to the analysis.  For that to be the case, the claim “must be one which arises out of or relates to the defendant’s forum-related activities.”

Here, the Court thought it clear that the consumer’s claims did “not arise out of [the vendor’s]

broader forum-related activities in the state (its contracts with California merchants, physical [] offices, and so on).”  Instead, the relevant activities were the vendor’s “collection, retention, and use of consumer data.”  Those activities, however, did “not have a forum-specific focus.” They were “accessible across the United States, and the platform is indifferent to the location of either the merchant or the end consumer.”

Affirming the trial court’s dismissal, the Ninth Circuit concluded:

The defendants are not subject to specific jurisdiction in California because they did not expressly aim their suit-related conduct at the forum state. When a company operates a nationally available ecommerce payment platform and is indifferent to the location of end-users, the extraction and retention of consumer data, without more, does not subject the defendant to specific jurisdiction in the forum where the online purchase was made.

Third Circuit Holds “Ifs” and “Coulds” and “Woulds” Not Enough for Standing
Morales v. Commonwealth Fin. Sys., No. 22-3388, 2023 U.S. App. LEXIS 31186 (3d Cir. Nov. 22, 2023)

A consumer received a collection letter on a time-barred debt that stated, in part:

The law limits how long you can be sued on a debt. Because of the age of your debt, the creditor cannot sue you for it. In many circumstances, you can renew the debt and start the time period for the filing of a lawsuit against you if you take specific actions such as making certain payments on the debt or making a written promise to pay. You should determine the effect of any actions you take with respect to this debt.

The consumer filed a lawsuit against the collection agency alleging the letter was misleading and a violation of the Fair Debt Collection Practices Act.  She claimed:

1. The disclosure “failed to inform her that she may, in fact, be sued on time-barred debt, despite having a complete legal defense to such a Suit”;
2. The disclosure implied that if the current or successor creditor did file a suit against her, then she “would not need to take any action to preserve her rights”;
3. If she “failed to assert that the obligations were time-barred in response to being sued by [the creditor], then [the creditor] would likely be awarded judgments”;
4. The language describing how she could “renew” the debt misstated how debts may be revived under New Jersey law.

The trial court granted the agency’s motion to dismiss for failure to state a claim, and the consumer appealed.

In a non-precedential opinion, the U.S. Court of Appeals for the Third Circuit began by questioning the consumer’s Article III standing, noting that she must have “suffered (1) a concrete, particularized, and actual or imminent injury, (2) that was likely caused by the defendant, and (3) would likely be redressable by a favorable judicial decision.”  The court noted that “[m]ere violation of a federal statute does not necessarily constitute a concrete injury.”

To establish this, “under either the informational injury doctrine or traditional standing principles, [the consumer] must plead facts showing that she suffered some adverse consequence or downstream consequence from her receipt of the allegedly false or misleading letter.”

Reviewing the consumer’s allegations, the Court found:

All the consequences she alleges are hypothetical and illusory. The “mere risk” of litigation unsupported by any facts showing that it is certainly impending cannot be a cognizable injury conferring standing. . . . [The consumer’s] complaint is replete with “ifs” and “coulds” and “woulds.” It is bereft of any factual allegations other than that she incurred a debt and received a misleading debt collection letter. Mere confusion and the speculative risk of a lawsuit are not enough to confer standing to an FDCPA plaintiff.

Based on this, the Court vacated the trial court’s order which had dismissed the complaint for failure to state a claim and remanded for the trial court “to decide whether to grant [the consumer] leave to amend her complaint to allow her to plead additional facts that show she has standing or dismiss without prejudice due to lack of jurisdiction.”

Second Circuit Finds Reply to Unprompted Email Not An “Initial Communication”
Worley v. Meyrowitz, No. 23-187-cv, 2023 U.S. App. LEXIS 30199 (2d Cir. Nov. 14, 2023)

A consumer failed to pay her rent, was sued, and a default judgment was entered.  The consumer claimed she didn’t learn of the judgment until several years later, at which time she contacted the former landlord and was informed that the matter was with a collection law firm and given the firm’s contact information.

The consumer contacted the law firm by email and received a reply email informing her of the outstanding balance, after which she “moved to vacate the default judgment, which the state court denied.”

The consumer next filed suit in federal court alleging the law firm “improperly attempted to collect what it knew to be an unlawful debt stemming from the state-court judgment.”  The trial court dismissed the complaint, finding that the law firm’s email “did not constitute an ‘initial communication,’ as required for certain claims under the FDCPA, because it was reactively sent in response to an email from [the consumer].”  The court also held that it “lacked jurisdiction over [the consumer’s] remaining FDCPA claims based on the Rooker-Feldman doctrine.”

In a non-precedential opinion, the U.S. Court of Appeals for the Second Circuit agreed the law firm’s email to the consumer was not an “initial communication” as it was “in response to her unprompted communications . . .  Because [it] was a response to [the consumer’s] contact, it does not constitute an ‘initial communication’ for purposes of the FDCPA. As such, [the consumer] has failed to state a claim under either § 1692e(11) or § 1692g(a).”

The Court did find that the consumer’s claim that the law firm used “confusing, misleading, and deceptive language” was not barred by the Rooker-Feldman doctrine because “this claim speaks to the collection-related conduct of [the law firm] as a debt collector for [the landlord] rather than to the validity of the state-court judgment itself.”  However, the Court held that claim to be abandoned since the consumer failed to make the argument in response to the law firm’s motion for judgement on the pleadings.

Therefore, the Second Circuit affirmed the judgment of the trial court.

Donate an Item for the Annual Conference Silent Auction
RMAI is now accepting donations for the 2024 Annual Conference Silent Auction benefiting the RMAI Legislative Fund, sponsored by Kino Financial Co., LLC. The silent auction will begin Tuesday, February 6^th and will end during the Networking Reception in the Exhibit Hall on Wednesday, February 7^th. We are seeking 50 fantastic and unique items for the auction catalog. If you have an item you would like to donate, please complete this Donor Form. Or you can view the Silent Auction webpage to view the auction catalog, register as a bidder, and donate an item.  We look forward to seeing some great donations!

Donate to the Legislative Fund with Your Membership Renewal
With December being the last month to renew your membership without having to pay a late fee, now is a great time to pay and include your Legislative Fund donation. Donating is voluntary and there is a suggested donation amount on your renewal invoice. Every donation to our Legislative Fund is appreciated and greatly helps us to continue the fight for the receivables management industry, so feel free to donate a different amount than suggested.

If you’ve already paid your membership dues but would still like to contribute, you can do so by donating here. We will add your company name to our list of Legislative Fund contributors on a large sign at the 2024 Annual Conference, the RMAI website, and in RMAI publications and invite you to the Legislative Fund Donor Reception at the 2024 Annual Conference. Click here  to see a list of current contributors on the right-side bar.

About the Legislative Fund
RMAI actively monitors and responds to state and federal measures affecting how our members do business. Your contributions to the Legislative Fund extend the reach of RMAI’s advocacy across the country where and when needed. Read more about the Legislative Fund. Click here to see a list of current contributors on the right-side bar.

Upcoming Webinar
Register now for our December 20^th webinar, Navigating Wyoming HB 284: Demystifying the Application Process and Q&A where our presenters will walk you through the process of licensing in Wyoming and answer questions about challenges you may experience.

Recorded Webinars

Certification Webinar Series – 1.5 education credits
Recorded November 27^th, 29^th & 30^th, RMAI’s 2023 Certification Webinar Series delivered three (3) 30-minute webinars which focused on preparing you to obtain Receivables Management Business or Receivables Management Vendor certification and undergo the third-party compliance audit. These brief but bountiful webinars will give you the insight you need to either begin or continue your RMAI Receivables Management Certification Program journey.

Register for the recorded webinars below. Registration is free for employees of RMAI member companies.

• #1: Starting or Continuing Your Certification Journey
• #2: Ask an Authorized Audit Provider: Your Burning Questions Answered
• #3: Lessons Learned from the Compliance Audit Process, Sponsored by ARM Compliance Business Solutions

*Sponsored Webinar*
Recorded on December 12^th, you can register for Reviving Financial Resilience: TransUnion’s Recovery Model and Legal Strategies Unveiled. Presenters from TransUnion and The Bureaus, Inc. share information regarding recovery scoring and legal strategies and managing potential challenges through practical application.

Click here for more information on our live and recorded educational webinars. Contact Shannon Parod at [email protected] to find out more about sponsoring an RMAI.

Congratulations to our new and renewed Certified Receivables Compliance Professionals (CRCP) and new and renewed Certified Receivables Businesses (CRB)

CRCP NEW
Andrea Goist, Velocity Portfolio Group, Inc.

CRCP RENEWALS
Andrew Blady, Spring Oaks Capital, LLC
Kelli Edmonds, Kota Business Solutions, LLC
Dennis DiGesare, Huntington Debt Holdings, LLC
Ken Hamill, Resurgent Capital Services
Patrick Lausen, Convergence Acquisitions, LLC
Aristotle Sangalang, The Bureaus, Inc.
Steve Zahn, TrueAccord

CRB NEW
Pollack & Rosen, LLC

CRB RENEWALS
Landmark Strategy Group
Scott & Associates, PC

EFFECTIVE MARCH 1, 2024: PRE-CERTIFICATION AUDIT IS REQUIRED FOR DEBT BUYERS, COLLECTION AGENCIES & COLLECTION LAW FIRMS PURSUING CERTIFICATION

As previously announced, effective March 1, 2024, the RMAI Receivables Management Certification Program will require all debt buyer, collection agency, and collection law firm members to undergo a pre-certification audit prior to submitting their application for business certification. Through February 29, 2024, the only audit requirement is a full compliance audit conducted at the mid-way point of the three-year certification.

Avoid the extra expense and time commitment of a pre-certification audit, by certifying your business NOW. Please contact Director of Certification & Education, Shannon Parod at [email protected] to get more information.

If you want to learn more about the business certification requirements and process, you can register for our Certification Webinar Series which includes three (3) 30-minute recorded webinars about going through the certification application process and through a compliance audit. Please see the Education section of the RMAI Update for more details and links to register.

View all certified businesses and vendors.
View all certified individuals.
View educational requirements for certified individuals.

For questions about certification, contact RMAI at (916) 482-2462 or email [email protected].

RMAI’s leadership cultivates relationships within the receivables management industry to expand business opportunities for members.

2024 RMAI Annual Conference | February 5-8, 2024

Please note, the RMAI offices will be closed Friday, December 22nd, and Monday, December 25th, for the Christmas holiday, and January 1st for New Year’s Day.

Thank you to our December 1, 2022 through December 8, 2023 Legislative Fund Contributors!

DIAMOND

Cavalry Investments, LLC

Crown Asset Management, LLC

Financial Recovery Services, Inc.

Midland Credit Management

Portfolio Recovery Associates, LLC

Resurgent Holdings, LLC

Velocity Portfolio Group, Inc.

TITANIUM

EverChain

Second Round, LP

TRAKAmerica

PLATINUM

Blitt and Gaines, P.C.

Cascade365 Family of Companies

Garnet Capital Advisors, LLC

InvestiNet, LLC

T & I Enterprises, LLC

Unifund CCR LLC

GOLD

Rausch Sturm, LLP

SILVER

Andreu, Palma, Lavin & Solis,  PLLC

FMA Alliance, Ltd

Klima, Peters & Daly, P.A.

National Credit Adjusters, LLC

National Loan Exchange, Inc.

Provana, LLC

Ragan & Ragan, PC

Velo Law Office

BRONZE

DebtNext Software, LLC

Invenio Financial, a Phillips & Cohen Associates company

Kredit Financial Inc.

Resurgence Capital, LLC

Troutman Pepper

TrueAccord

BRASS

Acctcorp International, Inc.

Actuate Law, LLC

Advancial Federal Credit Union

AKCP LLC

Aldridge Pite Haan, LLP

Arko Consulting LLC

ARM Compliance Business Solutions LLC

Basham & Scott, LLC

Bayview Solutions, LLC

Bread Financial

C & E Acquisition Group, LLC

Call Center Services International

CBE Companies

Central Portfolio Control, Inc

Collection Attorneys USA LLC

CompuMail Information Systems

ConServe

Convergence Acquisitions, LLC

Cornerstone Licensing Services

Credit Control, LLC

CSS Impact

D & A Services, LLC

Digital Recognition Network

Dynamic Recovery Solutions

Epicenter Technologies Pvt. Ltd.

FDR Alliance LLC

G. Reynolds Sims & Associates, P.C.

General Collection Co.

Genesis Recovery Services

George Brown Associates, Inc.

Glass Mountain Capital, LLC

Gordon, Aylworth & Tami, P.C.

Halsted Financial Services, LLC

Harvest Strategy Group, Inc.

Hinshaw & Culbertson

Huntington Debt Holding LLC

Imagined.Cloud LLC

InDebted

International Debt Buying Consultants, LLC

January Technologies, Inc.

Kino Financial Co., LLC

Law Office of James R. Vaughan, P.C.

Levy & Associates, LLC

Lockhart, Morris & Montgomery, Inc.

Mandarich Law Group LLP

Markoff Law LLC

Moss & Barnett, P.A.

Mountain Peak Law Group, PC

Murray Law Firm, P.C.

National Debt Holdings, LLC

NCB Management Services, Inc.

Nelson & Kennard

Nuvei

PCI Group Inc.

Plaza Services

Pressler, Felt and Warshaw, LLP

Prodigal

Quall Cardot, LLP

Quantum3 Group, LLC

Repay Realtime Electronic Payments

Resource Management Services, Inc.

RevSpring

Robinson Hoover & Fudge, PLLC

SAM – Solutions for Account Management

Security Credit Services, LLC

Sequium Asset Solutions, LLC

Skit.ai

Slovin & Associates

SMS Financial, LLC

Stillman Law Office

Stone, Higgs & Drexler

Suttell & Hammer

TEC Services Group, Inc.

The Bureaus, Inc.

The Cadle Company

Tobin & Marohn

Troy Capital, LLC

Universal Fidelity LP

USASF Servicing, LLC

Vertican Technologies, Inc.

OTHER

Alliance Credit Services, Inc.

Atlas Acquisitions

CMS Services

Cohen & Cohen Law, LLC

Connect International

Consuegra & Duffy, PLLC

Converging Capital, LLC

Convoke, Inc.

Credit Corp Solutions Inc.

Credit Management Corporation

D1AL

Dynamic Collectors, Inc.

Equifax, Inc.

First Financial Portfolio Services, LLC dba FFAM360 Capital

HS Financial Group, LLC

London & London

Martin Golden Lyons Watts Morgan PLLC

MauriceWutscher LLP

Miller and Steeno, P.C.

National Recovery Solutions, LLC

Palinode, LLC

POM Recoveries, Inc.

Poser Investments, Inc.

Premier Forty Financial, LLC

ProVest LLC

Receivables Management Association International

Roosen, Varchetti & Olivier, PLLC

Sandia Resolution Company, LLC

Smith Debnam Narron Drake Saintsing & Myers, LLP

Solutions by Text

Sonnek & Goldblatt, Ltd.

The Oakes Law Firm, LLC

Vargo & Janson, P.C.

Venable LLP

Venandi Systems, LLC

WebRecon LLC

Womble Bond Dickinson