RMAI Update August 2024

Last week, 175 executives gathered in beautiful Santa Ana Pueblo, NM for the 2024 Executive Summit. This intimate event was packed with opportunities to meet new people, connect with friends, and learn more about the latest news in the industry.

This year’s Summit featured 12 education sessions and 15 networking events, including golf at Twin Warriors Golf Course, dancing and artisans at our Taste of New Mexico event, and relaxing around the firepit in the evenings. Our Keynote Address was delivered by Congressman Mike Lawler, providing a comprehensive update on the latest developments from Capitol Hill.

Both chambers of Congress have adjourned for their August recess and will return for work in September. Congress is expected to spend most of their time next month working on a spending bill that will keep the government open beyond October 1. They’ll then hit the campaign trail in October in advance of the November election.

Last week, CFPB Director Rohit Chopra participated in a social media engagement program with the public. Responding to “live” written questions on Reddit’s Ask Me Anything series, Director Chopra defended the bureau’s medical debt rule proposal. Despite being encouraged to Ask [Director Chopra] Anything, nearly all of the questions he responded to were related to medical debt.

The Q&A largely focused on participant inquiries about the process of submitting medical debt rulemaking comments, the likelihood of the rule proposal surviving legal opposition, and the relevance of credit reporting. Director Chopra made clear his position that the predictive power of medical debt reporting is limited, the “status quo isn’t really working” when it comes to credit reports, and the positive economic benefit that’ll come from this rule.

He shared with participants that “any potential final rule will be on a strong legal foundation” and that the proposed rule is being pursued “using explicit authority that Congress granted to the CFPB.”

Public comments to the rule proposal were due August 12, 2024. RMAI submitted comments, which can be viewed here.

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 [email protected]. 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 prohibit 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.]

Sixth Circuit Holds No Indemnification or Contribution for Financial Institutions Under the EFTA
Mich. First Credit Union v. T-Mobile USA, Inc., No. 23-1952, 2024 U.S. App. LEXIS 17393 (6th Cir. July 16, 2024)

Certain customers of a financial institution became victims of a “SIM swap” scam whereby their cell phone numbers were hijacked through their cellular phone service company, and two-factor authentication codes allowing account access were intercepted. The scam resulted in numerous unauthorized electronic transfers being made from the customers’ accounts at the financial institution.

The plaintiff financial institution reimbursed its customers for the unauthorized transactions as mandated by the federal Electronic Fund Transfer Act (EFTA).  The EFTA requires financial institutions to “reimburse their customers for unauthorized electronic transfers of money from the customers’ accounts,” except in certain limited circumstances not relevant here.

The plaintiff financial institution filed a putative class action for indemnification or contribution from the affected cellular phone service company, alleging that the cellular service provider’s failure to prevent the scam constituted grounds for recovery. More specifically, the plaintiff financial institution sought indemnification and contribution from the cellular service provider under the EFTA and its implementing regulation (Regulation E), the Michigan Electronic Funds Transfer Act (MEFTA), and state common law.

The trial court dismissed the financial institution’s complaint, concluding that the financial institution failed to establish a claim for indemnification or contribution under the EFTA and state law. The financial institution appealed, arguing that the EFTA implicitly provides a right to indemnification or contribution, that the MEFTA is not preempted by the EFTA, and that their state common-law indemnification claim was also not preempted by the EFTA.

On appeal, the U.S. Court of Appeals for the Sixth Circuit noted that “[c]laims for indemnification or contribution under a federal statute may be created in two different ways: (1) through action by Congress, either expressly or implicitly; or (2) by federal common law through the exercise of judicial power to fashion appropriate remedies for unlawful conduct.”

The Court held that the EFTA does not imply a right to indemnification or contribution for financial institutions, as “[t]he  EFTA provides a comprehensive framework governing the rights, liabilities, and responsibilities of both consumers and financial institutions” without providing any express right to indemnification or contribution, its primary purpose is consumer protection, and “none of the relevant factors weighs in favor of finding an implied right to indemnification or contribution for financial institutions under the EFTA.”

For similar reasons, the Sixth Circuit also rejected the plaintiff financial institution’s invitation to provide a “federal common law” right to indemnification or contribution in an EFTA action.

The Court also ruled that the EFTA preempts the MEFTA and any state common-law claims for indemnification or contribution, as such claims would interfere with the EFTA’s comprehensive regulatory framework designed to protect consumers from unauthorized electronic fund transfers.

Based on this, the Court affirmed the dismissal of the financial institution’s putative class action lawsuit against the cellular service provider.

Seventh Circuit Rejects Consumer’s FCRA and FDCPA Claims Arising from Post-Bankruptcy Collection and Reporting
Freeman v. Ocwen Loan Servicing, LLC, No. 23-2512, 2024 U.S. App. LEXIS 17093 (7th Cir. July 12, 2024)

A consumer obtained a loan to purchase her home. After falling behind on her mortgage payments, the mortgagee initiated a foreclosure action. The consumer filed for bankruptcy and eventually cured her pre-petition mortgage default through her bankruptcy plan payments.

Unfortunately, after the successful completion of her bankruptcy plan, the servicer allegedly inaccurately reported her loan as delinquent and began rejecting her subsequent monthly payments, leading the mortgagee to file a second foreclosure action, which was later dismissed.

The consumer sued the mortgagee and the servicer alleging violations of the FCRA and the FDCPA. The trial court dismissed the consumer’s FCRA claim as she failed to identify the consumer reporting agency (CRA) that she supposedly notified of her credit dispute. The trial court also granted summary judgment against the consumer on her FDCPA claim, citing lack of standing. This appeal followed.

On appeal, the consumer argued that the trial court “abused its discretion in denying her leave to amend to cure deficiencies in her FCRA claim,” and that the servicer violated the FCRA by failing to conduct a reasonable investigation after being notified by CRAs of her dispute over the delinquent loan reporting. She also argued that the servicer’s allegedly erroneous reporting and collection practices caused her various injuries sufficient to confer standing.

The U.S. Court of Appeals for the Seventh Circuit affirmed the trial court’s dismissal of the FCRA claim, finding that the consumer failed to specify which CRA she notified, thus not providing the servicer with fair notice of the claim.

The Court also upheld summary judgment in favor of the servicer on the consumer’s FDCPA claim, concluding that the consumer lacked standing. The Court determined that the consumer did not provide sufficient evidence of concrete injuries, such as monetary harm or intangible injuries closely related to common law analogues like defamation or invasion of privacy. The Court also noted that “hiring a lawyer to resolve confusion about the proper course of action is also insufficient to confer standing.”

The consumer’s claims of emotional and reputational injury arising from the foreclosure action were likewise rejected, the Court noting that “anxiety, embarrassment, and stress are not concrete injuries in fact,” and “stress by itself with no physical manifestations and no qualified medical diagnosis does not amount to a concrete harm.”

Accordingly, the Seventh Circuit affirmed the trial court’s dismissal of the claims.

RMAI continues to engage and educate legislators across the country, to advocate for the industry and protect the business interests of our members. RMAI puts every dollar donated towards this continued advocacy, and we thank those who have made contributions to the Legislative Fund this year.  If you have not yet donated this year, please consider making a contribution to the RMAI Legislative Fund. You can make a one-time donation, or even sign up for quarterly or monthly donations. Remember that together, we can make a difference!

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. (A special THANK YOU to those contributors highlighted in bold font for having donated 5 years in a row.)

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.

Upcoming Webinar
Register for our August 28th webinar, The Fight Over Medical Debt where our presenters will discuss what new laws and regulations have been adopted in 2024 related to medical debt and where this trend is likely to lead the nation in the future.

Recorded Webinar
Recorded on July 31 2024, you can register for Lending 101: Perspectives from Borrowers and Lenders.  In this webinar attendees with gain an understanding of how to effectively negotiate between lenders and sellers, including the challenges that may arise during the process.

Click here for more information on our live and recorded educational webinars. Contact Shannon Parod at [email protected] 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
Emily Adkins, Security Credit Services, LLC
Tonya Henderson, Resurgent Capital Services
Nicholas Hood, January Technologies
Jamie Rieman, National Debt Holdings, LLC

CRCP Renewals
Susan Appel, Unifund CCR LLC
Jon Gluckner, The Cadle Company
Monica Johnson, Absolute Resolutions Corp.
Jonathan Koop, Bankrupt Debt Services
Scott Kulaga, Halsted Financial Services
James Magnuson, Absolute Resolutions Corp.
Amber Russo, Kino Financial Co., LLC
William Shaulis, The Cadle Company

CRB New
Orbita Capital Group, LLC
Shepherd Outsourcing, LLC

CRB Renewals
Jefferson Capital Systems, LLC
Resurgence Capital, LLC

Submit Your Education Credits from the Executive Summit or Other Industry Events for Individual Certification
With the multitude of industry events that have happened this summer, now is the perfect time to complete your individual certification, which is also the first step of getting your business certified. See below for the simple steps to complete the process.

A) Complete 24 Credits of Continuing Education (We accept education going back two (2) years).

1. Ensure all required courses are completed.

B) Submit any certificates of completion, education credit forms or transcriptsprovided to you from industry events or webinars.

1. Didn’t receive a certificate of completion? Use our Blank Education Credit Form, which will serve as your certificate of completion.
2. Missing your credit form from an RMAI conference? Find the Conference Credit Form you need from our events for the past two (2) years.

 C) Complete the Individual Certification Application

1. Submit your application with proof of education credits.

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 [email protected] to set up a call.

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

Welcome, New Members
USCB Corporation | PA
Kaleo Legal | VA
Roach & Murtha Attorneys at Law, P.C. | NY
Fister Equities, LLC. | NJ

Help RMAI Grow!
Membership dues are 50% off until September 30^th, 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!

Add a Representative to Your Membership | $75/year
Do you have an employee or coworker who is interested in joining a committee or is pursuing or already earned individual certification? If so, now is a great time for them to enroll them as an Additional Membership Representative on your company’s membership! In addition to receiving information critical to certified individuals, Additional Membership Representatives also receive access to the following members-only communications and privileges:

• Member Directory
• Member Alerts
• RMAI Insights (Fall print and digital magazine)
• RMAI Digital Dispatch (Spring digital publication)
• RMAI Update (monthly e-newsletters – like this one!)
• And More!

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

2025 RMAI Annual Conference | February 10-13, 2025

Please note, the RMAI offices will be closed September 2nd, in observance of Labor Day.

Thank you to our August 13, 2023 – August 13, 2024 Legislative Fund Contributors!

DIAMOND
Crown Asset Management, LLC
Portfolio Recovery Associates, LLC

TITANIUM
Financial Recovery Services, Inc.

PLATINUM
Cavalry Investments, LLC
EverChain
T & I Enterprises, LLC
Unifund CCR LLC

SILVER
Blitt and Gaines, P.C.
FirstSource
InvestiNet, LLC
National Credit Adjusters, LLC
Velo Law Office

BRONZE
First Financial Portfolio Services, LLC dba FFAM360 Capital
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
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
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.
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, Inc.
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
Tratta
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.
Womble Bond Dickinson