RMA Update – April 2017

Federal Activity

The Federal Regulatory and Legislative Committee has been busy responding to an RFP issued by the Senate Banking Committee. They are seeking proposals for inclusion in their financial services legislation. The committee has drafted proposals with supporting documentation in the areas of the sales and resale of debt, statute of limitations, documentation, modernization of the FDCPA, and itemization of debt post charge-off. The deadline for submitting the proposal is April 14.

RMA leadership will be in Washington, D.C., the first week in May to meet with the FTC, CFPB, and leadership on Capitol Hill, as well as other financial services associations to build coalitions on mutual issues of concern.

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 has retained a California lobbyist, had an initial meeting with the sponsor’s office to address our concerns, and is actively working to develop a broad-based coalition to oppose 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. [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 has been able to amend or remove a number of provisions contained in the original bill.]

District of Columbia Bill 71 – This bill would amend the District of Columbia’s Debt Collect Law to: (1) expand the definition of debt collector to include debt buyers; (2) require specific data and documents concerning the debt to be in the possession of the debt collector; (3) limit the frequency of consumer contact using a reasonableness standard; (4) require pre-charge-off itemization of interest and fees; (5) prohibit bringing suit when the debt is beyond the statute of limitations and reviving the statute through payment; and (6) remove “willful” from intent for purposes of determining if a violation occurred. In addition, the following provisions in the bill would only apply to debt buyers: (i) expunges the debt after the statute of limitations expires; (ii) requires 11 months of account statements; (iii) requires a consumer notice detailing the consumer’s right to obtain copies of all the data and documents required by the act; (iv) requires a copy of any payment schedule or settlement agreement to be provided to the consumer within 15 days; (v) when bringing suit, requires all of the data and documents to be attached to the complaint; (vi) requires authenticated business records; (vii) makes debt buyers liable for actual damages, attorney’s fees, punitive damages, and an “additional penalty” of between $500 and $4,000 per violation of the act (including for minor clerical errors); and (viii) indicates that any violation of the act by a debt buyer is an automatic ban on future collection activity on the account by anyone. [RMA lobbyist has been retained.]

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) prohibits debt buyers from providing an affidavit as prima facie evidence; (3) require creditors to provide specific data and documents to the purchaser; (4) prohibits the sale of receivables if it has been paid, settled, discharged in bankruptcy, or is beyond the statute of limitations; (5) requires specific account information be provided in the complaint, and (6) requires 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 has been paid, settled, discharged in bankruptcy, or is beyond the statute of limitations shall be committing a Class C crime. [RMA lobbyist has been retained and RMA was the only national trade association representing the collection industry to testify in opposition at a recent hearing.]

Maine LD 1242 (HP 865) – Establishes specific requirements for debt buying companies in order to collect on a debt, validate a debt, bring a lawsuit on a debt, and to obtain a judgment on a debt. The requirements range from possessing the original contract and multiple data points at the time of consumer contact to the types of affidavits required to receive a judgment. [RMA lobbyist has been retained and RMA was the only national trade association representing the collection industry to testify in opposition at a recent hearing.]

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.]

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 a bond and E&O insurance. [RMA lobbyist has been retained and negotiations continue on the bill.]

Rhode Island HB 5396 – Creates the “Expired Debt Act” which would among other things: (1) prohibit consumer contact until the collector “possesses verifiable information documenting” chain of title, the amount of the debt, and the connection of the debtor to the debt; (2) require consumer notices on out-of-statute debt in every communication when the debt is beyond the statute of limitations; (3) prohibit default judgments on out-of-stat debt; and (4) provide damages for mental distress and emotional anguish. [RMA is actively monitoring the bill and was the only industry participant to testify in opposition to the bill in committee.]

If you are interested in obtaining a copy of the RMA state tracking list, please contact David Reid at [email protected].

Court Decisions

The following are several noteworthy court decisions recently handed down that may impact RMA members:

Disclosing Intent Not to Sue in Letter Collecting ‘Time-Barred’ Debt Violates FDCPA If Consumer Is Not Advised of Consequences of Payment or That Collection Lawsuit Is Prohibited by Law 
Pantoja v. Portfolio Recovery Associates, LLC, Seventh Circuit Court of Appeals, No. 15-1567 (March 29, 2017)

A debt buying company’s letter to collect a debt that was subject to the defense of an expired limitations period was found to violate the FDCPA because it failed to disclose that (1) a payment or promise can revive the limitations period; and, (2) the law limits or prohibits the debt collector from suing to collect the debt. The Seventh Circuit Court of Appeals reached this decision even though the letter stated: “Because of the age of your debt, we will not sue you for it and we will not report it to any credit reporting agency.” The court held that the letter was “deceptive as a matter of law” because it did not inform the consumer that a payment (or promise to pay) may restart the limitations period and thereby cause the consumer “significant risk of losing the protection of the statute of limitations.”

2nd Cir. Holds Payoff Statement Stating ‘Amount Due May Include’ Estimated Fees, Costs Violates FDCPA
Carlin v. Davidson Fink LLP, Second Circuit Court of Appeals, No. 15-3105 (March 29, 2017)

The U.S. Court of Appeals for the Second Circuit recently reinstated a complaint alleging a debt collector violated the federal Fair Debt Collection Practices Act when it sent a payoff statement containing unaccrued fees and costs without providing any information as to how those fees were calculated or any basis for those fees and costs. In so ruling, the Second Circuit was careful to note that a payoff statement may contain estimated fees and costs if the information in the statement would allow the least-sophisticated consumer to determine the minimum amount she owed at the time of the notice, what she needed to pay to resolve the debt in the future, and how the debt collector calculated the fees and costs.

MD Tenn. Holds Auto Finance Creditor’s Telephone Authorization Process Complied With EFTA
Blatt v. Capital One Auto Finance, Inc., United States District Court, M.D. Tenn.,  No. 2:15-cv-00015 (Feb. 17, 2017)

A federal court sitting in Tennessee recently held that a creditor complied with the federal Electronic Funds Transfer Act when it obtained verbal authorization to accept the consumer’s electronic fund transfer and request for enrollment into an autopay system. The court held that the creditor was not required to send the consumer a copy of his electronic signature (the recording). Instead, the Court held, the written confirmation of enrollment need only include the material terms of the autopay system, and sending the confirmation of enrollment within two business days of the date of enrollment was sufficient to meet the creditor’s duty under the EFTA, 15 U.S.C. § 1693, et seq. While the decision is favorable to members, other courts have reached the opposite result.

Education

Receivables Management Association (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.

APRIL WEBINAR
RMA offers a robust lineup of educational programs for professional development and credits towards your individual Certified Receivables Compliance Professional (CRCP) designation.

• SOL: Determining the Proper Statute of Limitations Date and the Media Required– Wednesday, April 26, 2017

• Recorded Webinars: Did you miss a live webinar? No worries, they are all recorded and available on our website.

Certification

Members who are working towards their individual certification have the opportunity to earn “live/in-person” credits towards the Receivables Management Program at RMA’s 2017 Executive Summit, August 1–3, 2017 at the Resort at Squaw Creek in Lake Tahoe, CA.

Certification Help: Contact Michelle Wren at (916) 482-2462 or [email protected].

CONGRATULATIONS
Congratulations to our newly certified individuals!

Individuals
Jennifer M Anderson, Alliant Capital Management, LLC
Jeremy Croteau, Oliphant Financial, LLC
Matthew Clark, EOS CCA
Tyler Peska, Credit Management Corporation
Daniel Schindler, Plaza Services, LLC
Julie Simes, Zealandia Capital, Inc.
Richard  Tilley, TCF

View all certified companies and certified individuals on our website.

New Members

(from March 15, 2017 – April 12, 2017)

The RMA International membership continues to grow. Welcome to our newest members:

Adamantine / Ascenfancy – Mexico
Citi Corp. – Deleware
Ironwood Funding – Texas
Law Offices of Daniel C. Consuegra – Florida
TriVium Systems, Inc. – Oregon
Universal Fidelity, LP – Texas
Zenco Portfolio Management – Texas

Read more about these members and other members on the Member Search page?

Keep Your Staff ‘in the know’
Do you know that you can add key staff to your company’s RMA membership for only $50 per person? The additional member fee entitles each individual to receive all RMA Member Alerts and electronic newsletters, the full-color RMA magazine, “members only” access to RMA website pages, and discounts on educational offerings and conferences.
Email or call RMA’s member services manager, Barbara Souza, with the staff person’s name, title, and email address along with charge information: call toll free at (855) 562-9863, email [email protected], or download and print the form here

Executive Summit

Registration is open for the Executive Summit! Enjoy three days of education, networking, and recreation in beautiful Lake Tahoe, California. Bring your family and linger a bit longer—the Resort at Squaw Creek has extended the discounted group rate 3 days before and after Summit. For more information, visit our website.

Industry Events

RMA works to open new markets and promote the industry at various conferences and events (look for us at these events).

DATE	EVENT/LOCATION
April 17-19	Debt Collection Forum, Nashville TN
April 19-21	Credit and Collection News Conference (CCN), San Diego CA
May 17-19	NARCA, Orlando FL
May 23-25	NABD, Las Vegas NV