The RMA Certification Council has formally adopted version 5.1 of the Receivables Management Certification Program (RMCP) after a six month deliberation, drafting, and review process. As always, these program requirements have been designed to be prospective and will be tied to a certified company’s next renewal after August 1, 2017. The most significant change in version 5.1 is the adoption of specific criteria for the purchase and sale of judgments.
Here is a summary of the major substantive changes contained in version 5.1:
- Appendix A – Standard # 18 (Purchase & Sale Documentation Requirements) – Makes revisions to incorporate specific requirements for the purchase and sale of judgments. The current standard focuses exclusively on the purchase and sale of pre-judgment receivables. It is important to note that the language concerning judgments is prospective and will not apply to judgments purchased prior to August 1, 2017.
- Appendix A – Standard # 19 (Representations & Warranties) – Revises the existing standard to require that “best efforts” be used to obtain the RMCP representations and warranties while at the same time providing certified companies some latitude by allowing “substantially similar” language rather than the current word-for-word.
- Appendix A – Standard # 20 (Due Diligence) & Standard # 21 (Sale Restrictions) – Moves the current “due diligence” requirements that are a part of Standard # 21 to its own standard (Standard # 20) to highlight the importance RMA places on due diligence.
- Appendix B – Standard # 6 (Affidavits) – Deletes the standard on “affidavits” for broker certification. Brokers very rarely, if ever, sign affidavits, making the standard superfluous.
- Appendix B – Standard # 11 (Seller Requirements) – Revises the current broker standard by adding a clarification that it only applies to brokers “when one of the contracting parties is a Certified Company.” This introductory language is identical to that used in Standard # 12.
The Council is required to perform a review of certification program standards at least annually to ensure the program reflects “evolving industry best practices, input from key stakeholders and communities of interest, areas of Council concern, and recent regulatory and statutory changes.”
Please contact Michelle Wren at (916) 482-2462 or mwren@rmaintl.org with any questions or concerns.
This Alert is intended for Members of RMA and is for informational purposes only and is in no way intended to provide legal advice. Members are encouraged to consult with an attorney of their choice for legal advice concerning this matter.