RMAI Update April 2024

The RMAI Board of Directors gathered for a few days in March to take a deep dive into issues facing the industry, the credit ecosystem, market trends, market participants and more.  All this sets the table for strategic discussions on how to position RMAI to best serve our members going forward.

Additionally, the board and staff heard a presentation from an attorney specializing in association law, discussing the legal responsibilities of board members, legal principles relative to associations, and what successful boards can do to avoid dysfunction.  The presentation concluded with ideas for developing future leaders.

The group reviewed RMAI’s strategic initiatives from previous years and were pleased to see that many of the initiatives have been completed.  Previous initiatives included creating a working group to better understand the Fintech market, publishing an auto paper, affiliating the RMAI Certification program with BBB National Programs, producing an Annual Report, improving RMAI’s use of technology to automate the certification process and better manage member records, increasing CLE offerings, and, as resources allow, introducing proactive legislation.

Looking ahead, the group brainstormed new strategic initiatives to research.  New initiatives that will be considered (after investigation into the pros and cons) include forming a Past Presidents Council, encouraging Associate Debt Buyers to become certified prior to the end of the year, formation of a federal Political Action Committee, continuing to develop future industry leaders, and insuring a smooth transition to the new RMAI Executive Director, Mike Becker.

As the year progresses, these initiatives will guide the work RMAI undertakes and the allocation of resources.

RMAI published the RMAI Digital Dispatch at the beginning of this month, with topical articles including our Federal and State updates. Read on for Court Decisions, Certification and Membership updates. Federal, State and Education updates will return next month.

Third Circuit Holds Statutory Trusts are Subject to CFPB Jurisdiction
Consumer Fin. Prot. Bureau v. Nat’l Collegiate Master Student Loan Tr., No. 22-1864, 2024 U.S. App. LEXIS 6493 (3d Cir. Mar. 19, 2024)

In 2017, the Consumer Financial Protection Bureau (“CFPB”) brought an action against numerous statutory trusts (“Trusts”) that “were formed ‘for the narrow purpose of acquiring and servicing a sizable portfolio of student loans.’” Though the Trusts had no employees, they contracted with third parties to perform various services, including the institution of lawsuits to collect on defaulted student loans.  The CFPB alleged the Trusts’ servicers, in support of collection lawsuits, filed false affidavits and failed to provide documentation necessary to establish ownership.

Before reaching final judgment, the trial court granted the Trusts’ request to certify two issues to the U.S. Court of Appeals for the Third Circuit for an interlocutory appeal:

1. Whether the Trusts are covered persons subject to the Consumer Financial Protection Act (“CFPA”).
2. Whether the CFPB was required to ratify the underlying action; and

On the first issue, the Third Circuit engaged in statutory interpretation beginning with 12 U.S.C. § 5531(a):

The Bureau may take any action . . . to prevent a covered person or service provider from committing or engaging in an unfair, deceptive, or abusive act or practice under Federal law in connection with any transaction with a consumer for a consumer financial product or service, or the offering of a consumer financial product or service.

The definition of a “person” under the CFPA includes trusts.  A “covered person” must “engage” in offering or providing a “consumer product or service,” and the Trust Agreements stated that the purpose of the Trusts was to “engage” in various activities, one of which the Trusts admitted was to provide for the servicing of loans.”

Thus, the Court concluded “that the Trusts engage in both student loan servicing and debt collection. As such, the Trusts fall within the purview of the CFPA because they ‘engage’ in a known ‘consumer financial product or service’ and are necessarily subject to the CFPB’s enforcement authority.”

Addressing the second issue, the Third Circuit reviewed the decisions of the U.S. Supreme Court in Seila Law LLC v. Consumer Fin. Prot. Bureau, 140 S. Ct. 2183 (2020), and Collins v. Yellen, 141 S. Ct. 1761 (2021), as well as opinions from the Ninth and Tenth Circuits.  In Consumer Fin. Prot. Bureau v. CashCall, Inc., 35 F.4th 734 (9th Cir. 2022) the court stated: “We find it unnecessary to consider ratification because [Collins] has made clear that despite the unconstitutional limitation on the President’s authority to remove the Bureau’s Director, the Director’s actions were valid when they were taken.”  In Integrity Advance, LLC v. Consumer Fin. Prot. Bureau, 48 F.4th 1161 (10th Cir. 2022), the court “held that ‘Collins put to rest’ the argument that ratification was necessary for actions taken while the agency was unconstitutionally structured.”

Based on this, the Third Circuit determined that it was unnecessary to remand on the issue of ratification:

As our sister courts have noted, ‘[w]hile Collins remanded for further factual development on the issue of harm, we need not do so here, as the record is clear.’ The record is also clear here: There is no indication that the unconstitutional limitation on the President’s authority harmed the Trusts.

Seventh Circuit Rejects Article III Standing Arguments Based on Speculation and Worry
Patterson v. Howe, Nos. 22-2602, 22-3083, 2024 U.S. App. LEXIS 6744 (7th Cir. Mar. 21, 2024)

An attorney filed a collection complaint against a consumer and included four requests for admissions.  The pleadings failed to warn the consumer that the requests would be deemed admitted in the absence of a response, and the consumer filed a federal lawsuit against the attorney alleging this was a violation of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, et seq.

The trial court granted summary judgment to the consumer, finding “the requests for admission ‘would confuse an unsophisticated debtor … about the required timing and manner of a response to the plaintiff’s claims.’”  The court also determined the consumer “would have denied the requests for admission within thirty days if he had known they would be deemed admitted otherwise, and that his subjective perception that he had lost negotiating leverage was a concrete injury sufficient to support his standing.”  The attorney appealed.

On appeal, the consumer argued he had established Article III standing because: 1) “he would have denied the requests for admission if he had been warned they would be deemed admitted after thirty days without a response;” and 2) “his inadvertent admissions caused him to lose negotiating leverage in the debt-collection suit.”  The U.S. Court of Appeals for the Seventh Circuit disagreed.

First, the Court explained that “[s]tanding must exist at the time a lawsuit is filed.”  Here, the consumer filed the federal FDCPA lawsuit before conclusion of the state court collection case.  Thus, when the consumer “filed his federal complaint, the mere possibility that his deemed admissions might be used against him was neither concrete nor imminent. Such speculative injuries do not support standing for damages claims.”

Second, “[t]o the extent [the consumer] argues that he was injured by merely believing that he had lost negotiating leverage, as opposed to any monetary loss that resulted from that belief, he still fails to establish standing. This sort of worry resembles the psychological states we have previously deemed inadequate.”

The Third Circuit vacated the judgment of the trial court and remanded for dismissal of the case for lack of subject matter jurisdiction.

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

CRCP New
Haley Courville, Velocity Portfolio Group, LLC
Amanda Duffy, Consuegra & Duffy, LLP
Alison Emery, National Recovery Associates, LLC
Sharn Fuller, Crown Asset Management, LLC
Michelle (Shelly) Gensmer-Cleek, Kredit Financial Inc.
Susan Guevara, PRA Group, LLC
Elexis Harris, Dynamic Recovery Solutions
Joshua Velasquez, Velo Law Office

CRCP Renewals
Thomas Balcerzak, AACANet
Brian Bowers, Financial Recovery Services, Inc.
Lisa Burch, Connect 1, LLC
Rebecca Garland, VeriFacts, LLC
Lori Hess, National Credit Adjusters, LLC
Jake Jones, Resurgent Holdings, LLC
Todd Lansky, Resurgence Capital Group, LLC
David Lippman, Lippman Recupero
Sergio Martinez, Radius Global Solutions
Christi Pavia, McNall & Associates, P.C.
Angela Reed-Becker, Denali Capital, LLC
Michael Sheehan, Revenue Assistance Corporation dba Revenue Group
David VanDerHeyden, VanDerHeyden Law Office, P.A.
Adam Wertman, National Recovery Solutions, LLC

CRB New
Debt Direct Portfolio Management, LLC
ForgiveCo PBI, Inc
Judgment Exchange, LLC
Lockhart, Morris & Montgomery, Inc
Recovery Exchange, LLC
Starmark Financial, LLC

CRB Renewals
Cavalry Investments, LLC
The Bureaus, Inc
Unifund CCR, LLC

View all certified businesses and vendors.
View all certified individuals.

Schedule Your Pre-Certification Audit with One of RMAI’s Authorized Audit Providers
If your company is seeking to certify their business, the first step in this process is to schedule your pre-certification audit. Contact one or more of RMAI’s Authorized Audit Providers to get quotes on both your pre-certification audit as well as the full compliance audit, which will be required after a year and half of your company becoming certified.

7 Steps to Earn the Certified Receivables Business (CRB) Designation – for debt buyers, collection agencies, and collection law firms.
7 Steps to Earn the Certified Receivables Vendor (CRV) Designation* – for brokers, process servers, defense law firms, and all other vendor organizations.
*This designation already requires a pre-certification audit.

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.

Did Your Chief Compliance Officer Change For Your Certified Business?
RMAI certified businesses who have had a change in their Chief Compliance Officer (Standard A13) will need to ensure the following steps have been completed.

• Identify a replacement Chief Compliance Officer (CCO)
  • The CCO shall be a certified individual within six (6) months of appointment, if the replacement is not already certified.
  • You may have someone serve in an “acting” capacity while transitioning between Chief Compliance Officers and should attempt to fill a vacancy within three (3) months of the prior incumbent’s departure.
  • An “acting” Chief Compliance Officer is not required to be a Certified Individual unless he or she has served in such capacity for more than six (6) months.
  • The Chief Compliance Officer shall be an employee, owner, or a corporate officer of the Certified Company or of a corporate affiliate of the Certified Company.
• Update your company’s website (Standard A14) with the new CCO’s name and individual certification number.
  • If the CCO is in an acting capacity, please indicate so on your company website and be sure to update your website again once you have confirmed the new CCO.
• Inform RMAI of your CCO change so we can make the update in our database and on the RMAI website.

View educational requirements for certified individuals.

For questions about certification, contact RMAI at (916) 482-2462 or email cert@rmaintl.org.

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

2024 RMAI Executive Summit | August 6-8, 2024

Sponsor sales are open; contact Sylvia Done at sdone@rmaintl.org or call (916) 482-2462.

Registration will open April 1, 2024.

Thank you to our April 1, 2023 through April 10, 2024 Legislative Fund Contributors!

Diamond

Cavalry Investments, LLC

Crown Asset Management, LLC

Midland Credit Management

Portfolio Recovery Associates, LLC

Resurgent Holdings, LLC

Velocity Portfolio Group, Inc.

Titanium

EverChain

TRAKAmerica

Platinum

Cascade365 Family of Companies

InvestiNet, LLC

T & I Enterprises, LLC

Unifund CCR LLC

Gold

Rausch Sturm, LLP

Silver

Blitt and Gaines, P.C.

Klima, Peters & Daly, P.A.

National Credit Adjusters, LLC

Provana, LLC

Velo Law Office

Bronze

DebtNext Software, LLC

First Financial Portfolio Services, LLC dba FFAM360 Capital

Brass

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

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

Dynamic Recovery Solutions

Exelero Corp.

FDR Alliance LLC

Financial Recovery Services, Inc.

FMA Alliance, Ltd

General Collection Co.

Genesis Recovery Services

George Brown Associates, Inc.

Glass Mountain Capital, LLC

Gordon, Aylworth & Tami, P.C.

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.

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

PCI Group Inc.

Pharus Funding, LLC

Plaza Services

Pressler, Felt and Warshaw, LLP

Prodigal

Quall Cardot, LLP

Quantum3 Group, LLC

Repay Realtime Electronic Payments

Resource Management Services, Inc.

Revenue Assistance Corporation dba Revenue Group

RevSpring

Robinson Hoover & Fudge, PLLC

SAM – Solutions for Account Management

Security Credit Services, LLC

Slovin & Associates

SMS Financial, LLC

Stillman Law Office

Stone, Higgs & Drexler

Superlative RM

Suttell & Hammer

TEC Services Group, Inc.

The Bureaus, Inc.

The Cadle Company

Tobin & Marohn

TriVerity, Inc.

Tromberg, Morris & Poulin, PLLC

Troy Capital, LLC

TrueAccord

Universal Fidelity LP

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.

Dynamic Collectors, Inc.

Equabli, Inc

Equifax, Inc.

Gaskell & Giovannini, LLC

Hinshaw & Culbertson

HS Financial Group, LLC

Martin Golden Lyons Watts Morgan PLLC

Miller and Steeno, P.C.

National Recovery Associates, Inc.

National Recovery Solutions, LLC

Orbita Capital Group, LLC

Palinode, LLC

POM Recoveries, Inc.

Poser Investments, Inc.

Receivables Management Association International

Roosen, Varchetti & Olivier, PLLC

Sandia Resolution Company, LLC

SCJ Commercial Financial Services

Smith Debnam Narron Drake Saintsing & Myers, LLP

Sonnek & Goldblatt, Ltd.

The Oakes Law Firm, LLC

Vargo & Janson, P.C.

WebRecon LLC

Womble Bond Dickinson