RMA leadership and staff joined RMA’s Federal Legislative and Regulatory Counsel, K&L Gates, for two days of productive meetings in D.C. to further our advocacy agenda. Regulatory meetings with the FTC and CFPB discussed the new version of the Certification Program, which now includes brokers, insights on the rulemaking timeline under the new administration—we were told to expect an announcement from the CFPB on rulemaking in the near future—an operational/practical discussion on attorney “meaningful involvement”, and frustrations from both the CFPB and the FTC regarding the continued proliferation of phantom debt and debt-validation franchises.
On Capitol Hill, we met with seven members of the Senate Banking Committee to provide a more in-depth explanation of the five proposals submitted to the Senate Banking Committee in response to their bi-partisan RFP. We learned that over 100 proposals were submitted with ideas to be incorporated into the Senate’s version of the Financial Choice Act. RMA’s proposals followed the requested format of identifying the need, the consumer benefit, how the proposal will produce economic growth, and supporting materials. The review of all the proposals will take some time and will be followed by committee hearings which will provide an opportunity for RMA to further promote the proposals. K&L Gates will continue to monitor the process and advise on when next steps are appropriate.
Finally, in response to member concerns, RMA met with the Chief Regulatory Counsel with the American Bankers Association to express concern over what has been an upsurge in major banks notifying industry members that their accounts, for no apparent reason, are being closed in less than 30 days. We expressed the basic unfairness of these actions, as well as the logistical nightmares associated, including the fact that many of these accounts are identified/registered in the licensing process. The ABA shared our concerns and frustrations and provided a list of recommended actions our members should take if they receive such a notice from their bank. If you received this notice, please contact Jan Stieger (firstname.lastname@example.org) for more information. It is also important that RMA learns of when and where this is happening so we can also address the issue at future meetings with the Office of the Comptroller of the Currency (OCC).
State Legislative Activity
RMA is currently tracking more than 150 bills at the state level that impact the receivables industry in both positive and negative ways. Here are a few noteworthy bills of concern that are receiving attention:
California AB 1526 – This bill would require any legal action to collect on a consumer debt be commenced within 4 years from the date of default or the date of the last payment, whichever is earlier. The bill would extinguish the debt (i.e. eliminate the contractual obligation to repay the debt) and prohibit reporting the debt to a consumer credit reporting agency after the statute of limitations has run. [RMA and its California lobbyist worked with an industry coalition to obtain amendments to this bill but in the end the amendments were unsatisfactory to RMA and the bill was held over for the 2018 legislative session.]
California SB 298 – This bill would exempt the first $4,800 dollars in a deposit account from a bank levies as a means to satisfy court-ordered judgments. [RMA and its California lobbyist are working with an industry coalition in opposition to this bill.]
Colorado SB 216 – This bill would require debt collectors who bring a legal action on a debt owned by a debt buyer to attach to the complaint: (1) a copy of the contract, account-holder agreement, or other writing from the original creditor or the consumer evidencing the consumer’s agreement to the original debt and (2) a copy of the assignments or other writings showing an unbroken chain of ownership that establishes that the debt buyer is the owner of the debt. The bill also requires that prior to the entry of a default judgment on a debt owned by a debt buyer, the plaintiff shall file with the court: (i) the original account number at charge-off; (ii) the name of the original creditor at charge-off; (iii) the amount due at charge-off; (iv) an itemization of post charge-off additions, if any; (v) the date of the last payment, if applicable, or the date of the last transaction; and (vi) if the account is not a revolving credit account, the date the debt was incurred. These provisions only apply to debts sold or resold after January 1, 2018. Finally, this bill would exempt debt buyers from state bonding requirements going forward. [RMA testified in front of a Senate Committee in January on background recommendations prior to the bill’s introduction and through the assistance of a Colorado lobbyist negotiated amendments to the bill that addressed industry concerns.]
Maine LD 1199 (HP 836) – This bill would: (1) prohibit courts from issuing a garnishment order for the benefit of a debt buyer to enforce payment of a judgment; (2) prohibit debt buyers from providing an affidavit as prima facie evidence; (3) require creditors to provide specific data and documents to the purchaser; (4) prohibit the sale of receivables if it has been paid, settled, discharged in bankruptcy, or is beyond the statute of limitations; (5) require specific account information be provided in the complaint, and (6) require specific account data and documents be provided to the court prior to judgment. Any person who intentionally, knowingly, or recklessly attempts to collect a debt that it has been paid, settled, discharged in bankruptcy, or is beyond the statute of limitations shall be committing a Class C crime. [RMA was the only national trade association representing the collection industry to testify in opposition at an April hearing. RMA’s proposed edits to the bill have been supported by the Governor’s office and Maine’s Bureau of Consumer Credit Protection which has resulted in ongoing negotiations with the bill’s sponsor.]
Massachusetts SB 120 – This bill among other things would: (1) reduce the statute of limitations in an action for the collection of a consumer debt from six to four years to be measured from the earlier of the date of charge-off, placement for collection, or 180 days after the last regular payment; (2) prohibit payments made prior to the limitations period expiring from tolling the statute; (3) prohibit any attempt to collect a consumer debt once the statute of limitations has expired but would allow a debt collector to accept an unsolicited voluntary consumer payment on a debt; (4) extinguish judgments after five years unless the creditor takes action to enforce the judgment; and (5) reduce the percentage that is subject to wage garnishment. [RMA lobbyist has been retained to oppose the bill in its current form.]
Oregon HB 2356 (introduced at the request of the AG) – Requires debt buying companies to: (1) provide specific data and documents in the initial pleadings and to the court prior to judgment; (2) maintain specific policies and procedures; (3) obtain a license from the state to operate a debt buying company; (4) not sell debt to an unlicensed buyer; and (5) obtain E&O insurance. [RMA lobbyist has been retained to oppose the bill in its current form; bill reported to Ways & Means Committee where it awaits further action.]
Texas HB 1767 – This bill would extinguish the debt (i.e. eliminate the contractual obligation to repay the debt) after the statute of limitations has run. [RMA and Texas consumer groups negotiated amendments which would have resulted in a bill the industry could have supported but the sponsor rejected the negotiated language. RMA remained opposed to the bill and it died in committee.]
If you are interested in obtaining a copy of the RMA state tracking list, please contact David Reid at email@example.com.
The following are several noteworthy court decisions recently handed down that may impact RMA members:
Post-Discharge, Monthly Mortgage Statements Did Not Violate FCCPA When Accompanied by Proper Disclosure
Helman v. Bank of America, Eleventh Circuit Court of Appeals, No. 15-13672 (April 12, 2017)
Plaintiff received a discharge under Chapter 7 of the Bankruptcy Code. Although the discharge prevented the collection of a mortgage debt she owed to the defendant mortgage lender, it did not disturb the lender’s right to enforce the mortgage upon a non-payment default. Following the plaintiff’s Chapter 7 discharge, the lender sent the plaintiff monthly mortgage statements which informed the plaintiff she had “no personal obligation to repay [the mortgage debt].” But it also informed the plaintiff that “[the mortgage] allows foreclosure if the requirements under the loan documents are not met.”
Plaintiff filed a class action complaint alleging the monthly statement violated the Florida Consumer Collection Practices Act (“FCCPA”) among other Florida laws. The trial court dismissed the claims and the Eleventh Circuit Court of Appeals affirmed, finding, among other things, the plaintiff had knowledge that while the bankruptcy discharge relieved of her personal liability, the mortgage lien remained enforceable. When coupled with the mortgage lender’s disclosure in the monthly statements, the plaintiff’s assertion that the monthly statements misled her to believe she was personally obligated to pay the mortgage loan was a “bizarre or idiosyncratic interpretation” to which the court would not provide protection.
Violations of State Court Procedure Are Not Actionable under FDCPA
Lyshe v. Levy, Sixth Circuit Court of Appeals, No. 16-4026 (April 20, 2017)
Defendant lawyer and his law firm, while pursuing the plaintiff-debtor in a collection action, served requests which included a blank notary block and did not provide an electronic copy of the discovery requests. Plaintiff-debtor claimed these requests violated the federal Fair Debt Collection Practices Act (FDCPA) because Ohio Rules of Civil Procedure required that the lawyer and his firm to serve the discovery requests with a separate electronic copy and did not require the responses to be notarized. The trial court dismissed the claim finding it lacked subject matter jurisdiction, relying on last year’s Supreme Court decision in Spokeo, Inc. v. Robins.
The Sixth Circuit affirmed, holding that the harm alleged by debtor — i.e., that the discovery requests required him to visit a notary and to contact the law firm to obtain electronic copies of the discovery — is “not the type of harm the FDCPA was designed to prevent.” Therefore, the Court held that the alleged harm did not confer standing.
Demanding Prejudgment Interest Under Wisconsin Law Held Not to Violate FDCPA
Aker v. Americollect, Inc., Seventh Circuit Court of Appeals, No. 15-3105 (March 29, 2017)
The U.S. Court of Appeals for the Seventh Circuit recently held that letters demanding payment of medical services debt, which also demanded prejudgment statutory interest under Wisconsin law, did not violate the FDCPA. The Appeals court rejected the debtor’s argument that prejudgment statutory interest may only be collected once the obligation is reduced to a judgment. Instead, the Appeals court agreed with the debt collector’s interpretation that under Wis. Stat. §138.04, interest runs automatically, and that a judgment just memorializes what state law requires.
RMA offers an array of educational programs for those seeking their Certified Receivables Compliance Professional (CRCP) designation or wanting to gain additional professional education. Educational content is available via our website in a live monthly webinar format and prerecorded sessions that are available 24/7.
- The CFPB Portal Upgrades and the Consumer’s Perspective – Thursday, May 25, 2017
- Recorded Webinars: Did you miss a live webinar? No worries, they are all recorded and available on our website.
Chief Compliance Officers (and those holding compliance responsibility in their organization) who are seeking certification may benefit from RMA’s 2017 Chief Compliance Officer Webinar Series occurring June 13, 2017 – December 12, 2017. This series is separate and in addition to our regular monthly webinar offerings and will qualify for six (6) continuing education credits towards your Certified Receivables Compliance Professional (CRCP) designation. Register now!
Certification Help: Contact Michelle Wren at (916) 482-2462 or firstname.lastname@example.org.
Congratulations to our newly Certified individuals!
Kelli Edmonds, Alliant Capital Management, LLC
John Touhey, The Law Offices of John P Touhey, PLLC
Lawgix Lawyers, LLC
(from April 13, 2017 – May 12, 2017)
Welcome new RMA members!
The RMA membership continues to grow. Welcome to our newest members:
A-1 Collection Service – New Jersey
Capital Link Management, LLC – New York
Cognical, Inc. dba Zibby – New York
Equifax, Inc. – Missouri
High Mountain Funding – New Jersey
RIP Medical Debt – New York
Single Source TELECOM – Colorado
Southern Capital Finance Group, LLC – Georgia
Stratics Networks, Inc. – Alabama
TCF & Associates – California
Televergence Solutions, Inc. – Tennessee
Tracir Financial Services, Inc. – Ohio
Your Choice Logistics, LLC – Florida
Read more about these members and other members on the Member Search page.
New Member and Certification Logos Are Available
We are pleased to announce that revised member logos are now available. Many RMA members feature the membership logo on their website, email signature, and elsewhere. To opt in to use the membership logo, please complete the logo reuse form and send it to Barbara Souza at email@example.com. The member logo will be sent to you upon receipt of your completed form.
Certified companies and individuals may email Michelle Wren at firstname.lastname@example.org to receive the new Certification logos.
The 2017 Executive Summit is FILLING UP FAST. This intimate event will take place at the Resort at Squaw Creek in Lake Tahoe, California. The Resort has extended the room block for the weekend before and after the Summit—be sure to book soon, as this discounted group rate ($249/night) is limited! Secure Your Spot at the Executive Summit!
RMA works to open new markets and promote the industry at various conferences and events—look for us at these events.
|May 17-19||NARCA, Orlando FL|
|May 23-25||NABD, Las Vegas NV|
2017 Legislative Fund Contributors
Thank you 2017 Legislative Fund contributors. Your support allows us to influence threatening legislation, while also promoting and preserving the best interests of RMA members. Make your contribution today!
Digital Recognition Network
U.S. Equities Corp.
Capital Alliance Financial, LLC
Full Circle Financial Services, LLC
International Debt Buying Consultants, LLC dba Portfolio Management Group
Maurice Wutscher, LLP
Mjollnir Group, Inc.
The Bureaus, Inc.
A-1 Collection Service
Atlantic Credit & Finance, Inc.
Capital Collection Management, LLC
First Financial Asset Management, Inc. FFAM360
National Recovery Solutions
Nationwide Credit & Collection, Inc.
TCF & Associates
US Asset Management
USI Solutions, Inc.