RMAI Update July 2024

With the August recess looming, Congress has largely been in session, though unable to move much legislation. The recent focus of the House Financial Services Committee was Treasury Secretary Janet Yellen’s annual testimony on July 9. Meanwhile, Federal Reserve Chairman Jerome Powell delivered his semiannual report to the Senate Banking Committee and House Financial Services Committee on July 9 and 10, respectively.

Data privacy continues to be a major discussion on Capitol Hill. The Senate Commerce Committee held a hearing on July 11 titled, “The Need to Protect Americans’ Privacy and the AI Accelerant.” Behind the scenes, legislators continue to push for advancement of a federal data privacy bill, but no viable path has presented itself. Groups representing various business interests have expressed concerns with numerous versions of the bill, which has caught the attention of congressional leadership. Another hurdle to the data privacy bill is floor time. Congress needs time to debate such a bill and there isn’t much time left before the election. The August recess will be followed by the final push of the campaign season, and Congress still has work to do. Much of the limited time Congress has remaining will be increasingly devoted to funding measures.

Also on July 11, the Senate Health, Education, Labor, and Pensions Committee held a hearing titled, “What Can Congress Do to End the Medical Debt Crisis in America?” Medical debt, another focus of Washington, continues to take the stage at both the legislative and regulatory level. Comments on the CFPB’s Notice of Proposed Rulemaking are due August 12. RMAI is preparing comments on behalf of the membership.

In a decision overturning a decades long precedent, the U.S. Supreme Court discarded the Chevron doctrine.  Striking down Chevron means that federal courts must no longer defer to administrative agencies when interpreting a statute, although the administrative agencies and their interpretations remain persuasive authority that a court may consider in ultimately rendering a decision.  In addition, regulations from these administrative agencies are subject to attacks to the extent that they exceed the authority given to them by Congress.  Coming on the heels of the decision that upheld the CFPB’s funding as constitutional, the decision could offer RMAI members a better avenue to defend themselves against overreach from the CFPB, the FTC, and other federal agencies. For more information, please refer to the RMAI Member Alert on June 28, 2024, and the Court Decisions section of this newsletter.

Please join RMAI at the 2024 Executive Summit where we’ll host a federal regulator panel with staff from the CFPB and OCC. A separate panel will host representatives of various financial services associations where you’ll hear their take on state and national issues.

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. In 2024, RMAI has so far retained lobbyists in the following states: California, Colorado, Connecticut, Maine, Michigan, New York, New York City, Oregon, and Rhode Island. RMAI has also provided a financial contribution to a Nevada coalition fighting two ballot initiatives and the North Carolina Creditors Bar who is fighting a medical debt bill. 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 dreid@rmaintl.org. The following is a sample of the legislative activity over the prior month that has direct impact on the industry:

California SB 1061 – This bill would probit a person from furnishing information regarding a medical debt to a consumer credit reporting agency and would make a medical debt void and unenforceable if information regarding the medical debt is furnished to a consumer credit reporting agency. The bill would broadly define medical debt to mean “a debt related to, in whole or in part, a transaction, account, or balance arising from a medical service, product, or device.” However, it would specifically exempt debt charged to a credit card unless the credit card is issued under an open-end or closed-end plan offered specifically for the payment of medical services, products, or devices, unless that plan allows for deferred interest purchases of a medical service, product, or device. [RMAI is seeking a narrower definition of “medical debt” that would tie it to medical debt directly owed to a person or facility licensed in California that provides medical services. RMAI is concerned that the current exemption for credit cards is not broad enough. RMAI was successful in getting additional amendments to exempt home equity lines of credit, general-purpose lines of credit, and general-purpose unsecured installment loans.]

Massachusetts HB 4429 – This bill would, among other things: (1) increase the garnishment exemption from 50x state minimum wage to 65x state minimum wage; (2) reduce the statute of limitations (SOL) in an action for the collection of a consumer debt from six to five years; (3) prohibit the revival of a debt that is beyond the statute of limitations through the making of a payment; and (4) reduce the time allowed to take action to enforce a judgment from 20 to 10 years but allows renewing the judgment for an additional 10 years. If passed, the bill would take effect on January 1, 2025. [RMAI has been opposing this bill since 2014 when it was first introduced. After eight years of negotiations and countless amendments, RMAI, other industry participants, and consumer advocates agreed to amendments that resulted in a neutral position by the industry. Among items removed from the bill through RMAI’s efforts from its 2014 introduction: (a) 90x minimum wage garnishment exemption; (b) expungement of the debt once the SOL expires; (c) reducing the SOL from six to three years; (d) preventing the tolling of the SOL through a payment prior to the expiration of SOL; (e) reducing the enforcement of a judgment from 20 to 5 years with no renewal; (f) applying the bill’s provisions to real property; and (g) once the consumer exceeds the exemption threshold, only being able to garnish on income above the threshold.]

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”; (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 had in-person meetings with the bill sponsors and key legislators in October, followed by two virtual meetings with the Senate sponsor, to express our concerns. We recently received several amendments proposed by the sponsor which are currently under review.]

Rhode Island HB 7103-A [Chapter 224] Effective: January 1, 2025 – This law bans the reporting of “medical debt” to credit bureaus. Medical debt is defined as “an obligation of a consumer to pay an amount for the receipt of healthcare services . . . products, or devices, owed to a healthcare facility or a healthcare professional . . .” [The bill originally had a broad definition of “medical debt” that would have included debt on credit cards and other credit/loan instruments. RMAI retained a Rhode Island lobbyist to advocate for a narrower definition of “medical debt.” There were no other industry participants that had a lobbyist in Rhode Island, so RMAI was the only voice for the broader industry. RMAI was successful at getting this bill and three others amended.]

United States Supreme Court Overturns Chevron Doctrine (RMAI Member Alert 6/28/2024)
Loper Bright Enters. v. Raimondo, Nos. 22-451, 22-1219, 2024 U.S. LEXIS 2882 (June 28, 2024)

On June 28, 2024, the United States Supreme Court struck down a forty-year-old precedent that required courts to give deference to statutory interpretations of administrative agencies.  This is welcome news to RMAI members who have been subject to onerous regulations from the Consumer Financial Protection Bureau (CFPB), Federal Trade Commission (FTC), and other federal agencies in recent years.  The Chevron doctrine (so named for the case in which it was created: Chevron U.S.A. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984)) utilized a two-step framework to interpret statutes administered by federal agencies.  The first step was to determine whether Congress has directly spoken on the precise question in issue.  If yes, and if congressional intent is clear, the inquiry is over.  If not, step two requires the court to defer to the federal administrative agency’s interpretation of the statute if it “is based on a permissible construction of the statute.”

In Loper Bright Enterprises, et al v. Raimondo, et al., writing for the 6-3 majority, Chief Justice Roberts explained the separation of powers inherent in the Constitution. The Chief Justice then noted that while the views of the Executive branch (within which administrative agencies may be found) are entitled to “respect” and can “inform the judgment of the Judiciary,” they do not supersede a court’s judgment.

The opinion explained that the rapid growth of administrative agencies since the New Deal in the 1930s led to the passage of the Administrative Procedures Act (the “APA”), which was enacted “as a check upon administrators whose zeal might otherwise have carried them to excesses not contemplated in legislation creating their agencies.”  Essentially codifying the principles from Marbury v. Madison, an early Supreme Court decision that established that the courts decide legal questions, the APA specified that “courts, not agencies, will decide ‘all relevant questions of law’ arising on review of agency action.”

Chief Justice Roberts observed that Chevron was a departure from this traditional approach.  Since then, Chevron deference has grown, emboldening administrative agencies and the power of the Executive Branch while ignoring the Administrative Procedures Act’s and the U.S. Constitution’s mandate that the courts interpret the laws.  The Chief Justice also opined that “Chevron’s presumption is misguided because agencies have no special competence in resolving statutory ambiguities.  Courts do.”  He then noted that the Supreme Court had not deferred to an agency interpretation under Chevron since 2016 but that lower courts continue to apply it.

Striking down Chevron means that federal courts must no longer defer to administrative agencies when interpreting a statute, although the administrative agencies and their interpretations remain persuasive authority that a court may consider in ultimately rendering a decision.  In addition, regulations from these administrative agencies are subject to attacks to the extent that they exceed the authority given to them by Congress.  Coming on the heels of the decision that upheld the CFPB’s funding as constitutional, the Loper decision could offer RMAI members a better avenue to defend themselves against overreach from the CFPB, the FTC, and other federal agencies.

Sixth Circuit Finds FDCPA Violation for Including Non-Debtor Spouse in Collection Lawsuit
Snyder v. Finley & Co., L.P.A., 37 F.4th 384 (6th Cir. 2022)

A consumer’s husband incurred legal fees that he did not pay.  A collection law firm was retained to collect the fees and filed a collection action in state court against the husband and the consumer, jointly.  With regard to the consumer, the collection law firm “asserted a spousal-obligation-to-support claim under Ohio’s Necessaries Statute,” which “permits creditors to collect certain debts from one spouse incurred by the other.”  On that claim, the state trial court granted judgment in favor of the consumer.

The consumer then filed a lawsuit against the collection firm alleging it violated the federal Fair Debt Collection Practices Act (“FDCPA”) by filing the collection lawsuit against her without an arguable legal basis.  The federal trial court granted summary judgment in favor of the collection firm, and the consumer appealed.

The U.S. Court of Appeals for the Sixth Circuit observed that § 1692e of the FDCPA prohibits a debt collector from using “any false, deceptive, or misleading representation or means in connection with the collection of any debt.”  However, it noted, simply asserting an unsuccessful claim “does not, in and of itself, rise to an FDCPA violation. . . Proscribed rather is what is alleged to have occurred here: a material misstatement about state law in a court filing that is ‘false, deceptive, or misleading’ at the time it is made.’”

Regarding the Necessaries Statute, the Court acknowledged it provides: “Each married person must support the person’s self and spouse out of the person’s property or by the person’s labor. If a married person is unable to do so, the spouse of the married person must assist in the support so far as the spouse is able.” Ohio Rev. Code Ann. § 3103.03(A).

However, prior to the collection firm filing its collection lawsuit, the Ohio Supreme Court held in Embassy Healthcare v. Bell, 122 N.E.3d 117 (Ohio 2018), that a “nondebtor spouse becomes liable only if the debtor spouse does not have the assets to pay for his or her necessaries. . . a creditor must . . . first seek satisfaction of its claim from the assets of the spouse who incurred the debt. [The Necessaries Statute] does not impose joint liability on a married person for the debts of his or her spouse.”

Because the collection firm failed to establish that the husband lacked the assets to pay his debts before filing the joint lawsuit, the Court reversed the judgment of the trial court with instructions to enter a judgment in favor of the consumer.

First Circuit Holds Deceptive Acts or Practices Claims Need Not Be Analogous To Common Law Claims
Nightingale v. Nat’l Grid USA Serv. Co., No. 23-1476, 2024 U.S. App. LEXIS 16708 (1st Cir. July 9, 2024)

A consumer owing a debt received calls from two separate debt collectors who each called the consumer more than twice in a seven-day period in violation of Massachusetts law (cited by the Court as 940 Mass. Code Regs. § 7.04(1)(f)).  The consumer filed a lawsuit in state court against the creditor and collectors (“defendants”) under Mass. Ann. Laws ch. 93A, § 2(a) (“section 2”), prohibiting unfair or deceptive acts or practices. The consumer claimed the calls were “frustrating and akin to harassment,” and alleged they caused emotional distress and invaded his privacy.

The defendants removed the case to federal court and moved for summary judgment.  The trial court granted the motion, finding “that [the consumer] (1) could not demonstrate an emotional distress injury under chapter 93A without satisfying the common-law elements of intentional infliction of emotional distress, and (2) could not demonstrate a privacy-related injury under chapter 93A without satisfying the common-law elements of intrusion upon seclusion.”

On appeal, the U.S. Court of Appeals for the First Circuit began by noting that “Massachusetts law clearly rejects the broad assertion that the elements of a chapter 93A claim must track those of analogous common-law claims.”  However, the Court cautioned that “a mere violation of section 2 does not automatically give rise to an actionable injury under section 9. Instead, the plaintiff must identify a ‘distinct injury or harm,’ either economic or non-economic, ‘that arises from the claimed unfair or deceptive act itself.’”

Here, the Court determined that the consumer’s alleged injuries were “cognizable.”  While the call frequency limit applies to the initiation of the calls, the consumer’s “receipt of the calls was an invasion of his personal privacy causing injury or harm worth more than a penny.”  And, while “under Massachusetts tort law, a plaintiff cannot recover for mere negligent infliction of emotional distress without showing physical harm manifested by objective symptomatology,” “there is nothing in either the statutory text or Massachusetts case law to suggest that such a showing must be made to recover damages under chapter 93A.”

Based on this, the Court vacated the trial court’s grant of summary judgment.

RMAI’s Legislative Fundraising Affords Landmark Year for State Lobbyists
2024 was an amazing year for our state lobbyists. Thanks to your generous donations, RMAI was able to retain a record-breaking number of lobbyists on the state level to continue advocating for you and your businesses. As this year’s sessions close, we look forward to continuing our efforts state-to-state next year. RMAI’s Legislative Fundraising Committee will continue to reach out to members, and you can donate to the Legislative Fund to lay the foundation of another successful year of state and federal advocacy!

If you would like to contribute to the Legislative Fund and be featured on our website, you can donate here. You can view a list of current Legislative Fund donors here.

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. You can see a list of current contributors on the right-side bar.

Upcoming Webinars
Register for our July 31st webinar, Financing Debt Buyers: What Debt Buyers Should Know About Working with Lenders and Other Finance Sources, where our presenters will provide an introduction into lending options and will include a borrower, lender, and an attorney to take a deeper dive into the lending world.

Recorded Webinars
Recorded on June 25, you can register for Navigating Advocacy: Unveiling Key Resources and Myths in 3^rd Party Collections.  In this webinar members of RMAI’s Industry Research Working Group unveil their top reference materials and talking points crucial for advocating for the 3rd Party Collections Industry. Discover invaluable resources and learn how to effectively leverage them in your advocacy efforts. Additionally, our experts will debunk common misperceptions surrounding the industry’s practices and its vital role in the economy.

Have You Taken Education Outside of RMAI?
RMAI accepts education credits not just from RMAI webinars and conferences, but we also accept education from several Authorized Education Providers. We accept any and all education provided by these organizations and require no additional documentation to prove credits besides a certificate of completion or you can fill out our Blank Education Credit Form for any education credits you received but did not get issued a certificate of completion.

RMAI also accepts relevant education credits from State Bars for attorneys.

View our list of Authorized Education Providers

Click here for more information on our live and recorded educational webinars. Contact Shannon Parod at sparod@rmaintl.org 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
Angela Blackburn, Capio
Tyler DeOliviera, Velocity Portfolio Group, Inc.
Douglas Handschumacher, World Credit Recovery, LLC
Michael Hyla, Atlantic Recovery Solutions, LLC
Shanon Vanhuss, Harvest Strategy Group

CRCP Renewals
Kyle Cohen, Cohen & Cohen Law, LLC
Nicole Green, Cascade Receivables
Tara Hey, TrueAccord
Terri Haley, Second Round Limited Partnership
Dean Hoover, Collection Attorneys USA LLC
Bryan Hosto, Converging Capital, LLC
James Kiley, Investment Retrievers
Michael Lagana, Klima, Peter & Daly, P.A.
Demetrios Tsarouhis, Tsarouhis Law Group
Ryan Wall, Full Circle Financial

CRB Renewals
Second Round

Congratulations to our newly approved Authorized Audit Provider!
AARC-360

See our full list of our Authorized Audit Providers who provide pre-certification audit and full compliance audit services for businesses seeking certification or continuing certification.

For any additional certification needs, please see our resources below.

Certification Resources
CRB Timeline
7 Steps to Certification – Business
CRCP Timeline
7 Steps to Certification – Individual
Sample Policies and Procedures for Debt Buyers
Recorded Webinar – Starting or Continuing Your Certification Journey

For more information or to discuss the certification process in more detail, please contact Shannon Parod at sparod@rmaintl.org to set up a call.

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

There’s Still Time to Register for Executive Summit!
Remember, one of the most valuable and popular benefits of your RMAI membership is attending our events at a discounted member registration rate. Registration is still open for the Executive Summit, taking place at the Hyatt Regency Tamaya in Santa Ana Pueblo August 6-8th! Connect with industry colleagues during our education sessions while you enjoy the luxurious desert resort. Sponsorships are available too! Register and find out more.

Send Us Your Press Releases and Boost Your Reach with a Sponsored Social Media Post
We want to share your news! Make sure RMAI is on your press release distribution list. As a benefit of membership, RMAI posts members’ press releases to Member News on the RMAI website. As another benefit of membership, RMAI members can purchase sponsored social media posts ($200 each). To get in front of RMAI’s audience, contact Communications & Administrative Coordinator, Aurora Sain at asain@rmaintl.org.

Welcome, New Members
Withrow & Brunson, PLLC | AR
Healthcare Finance Direct | CA
Robinhood Credit, Inc | CA
Guru DNA Consulting, LLC | KS
MBA Consult Us, LLC | SC

For a complete list of RMAI members (including contact information), login to check out the Member Directory.

Help RMAI Grow!
Membership dues are 50% off during this third quarter of 2024. Do you know a company that would make a great RMAI member? Offer to be one of their references and refer them to the online membership application. Now is a great time to join RMAI!

2024 RMAI Executive Summit | August 6-8, 2024

Thank you to our July 1, 2023 – July 12, 2024 Legislative Fund Contributors!

Diamond

Crown Asset Management, LLC

Portfolio Recovery Associates, LLC

Titanium

Financial Recovery Services, Inc.

Platinum

Cascade365 Family of Companies

Cavalry Investments, LLC

EverChain

Unifund CCR LLC

Silver

FirstSource

Gurstel Law Firm P.C.

InvestiNet, LLC

National Credit Adjusters, LLC

T & I Enterprises, LLC

Velo Law Office

Bronze

Security Credit Services, LLC

Superlative RM

Brass

AAA Lenders Inc

AACANet, Inc.

Acctcorp International, Inc.

Advancial Federal Credit Union

ARM Compliance Business Solutions LLC

Automated Collection Services Inc

Balbec Capital

Basham & Scott, LLC

Bayview Solutions, LLC

Blitt and Gaines, P.C.

C & E Acquisition Group, LLC

Call Center Services International

CBE Companies

Central Portfolio Control, Inc

Collection Attorneys USA LLC

CompuMail Information Systems

ConServe

Cornerstone Licensing Services

Corporate Advisory Solutions, LLC

Credit Control, LLC

D & A Services, LLC

Debt Recovery Solutions, LLC

DebtNext Software, LLC

Exelero Corp.

FDR Alliance LLC

First Financial Portfolio Services, LLC dba FFAM360 Capital

FMA Alliance, Ltd

General Collection Co.

Genesis Recovery Services

Glass Mountain Capital, LLC

Grassy Sprain Group, Inc

Halsted Financial Services, LLC

Harvest Strategy Group, Inc.

Huntington Debt Holding LLC

Imagined.Cloud LLC

InDebted

Invenio Financial, a Phillips & Cohen Associates company

Investment Retrievers, Inc.

Jefferson Capital Systems, LLC

Kino Financial Co., LLC

Lateral Technology

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

Lockhart, Morris & Montgomery, Inc.

Moss & Barnett, P.A.

Mountain Peak Law Group, PC

Murray Law Firm, P.C.

National Debt Holdings, LLC

NCB Management Services, Inc.

Nelson & Kennard

PCI Group Inc.

Pharus Funding, LLC

Plaza Services

Pressler, Felt and Warshaw, LLP

Prodigal

Quall Cardot, LLP

Repay Realtime Electronic Payments

Resource Management Services, Inc.

Revenue Assistance Corporation dba Revenue Group

RevSpring

Robinson Hoover & Fudge, PLLC

SAM – Solutions for Account Management

Shepherd Outsourcing, LLC

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

TriVerity, Inc.

Tromberg, Morris & Partners, PLLC

Troy Capital, LLC

TrueAccord

Universal Fidelity LP

Velocity Portfolio Group, Inc.

Vertican Technologies, Inc.

VoApps, Inc.

Other

Alliance Credit Services, Inc.

Barron & Newburger, P.C.

Burr & Forman LLP

CMS Services

Cohen & Cohen Law, LLC

Comtronic Systems, LLC

Connect International

Consuegra & Duffy, PLLC

Converging Capital, LLC

Convoke, Inc.

Equabli, Inc

Equifax, Inc.

Gaskell & Giovannini, LLC

Hinshaw & Culbertson

HS Financial Group, LLC

Martin Golden Lyons Watts Morgan PLLC

National Recovery Associates, Inc.

National Recovery Solutions, LLC

Orbita Capital Group, LLC

Palinode, LLC

Poser Investments, Inc.

Receivables Management Association International

Roosen, Varchetti & Olivier, PLLC

Sandia Resolution Company, LLC

SCJ Commercial Financial Services

Sonnek & Goldblatt, Ltd.

The Oakes Law Firm, LLC

Vargo & Janson, P.C.

WebRecon LLC

Womble Bond Dickinson