RMAI Update January 2024

Congress returned from winter break to again face an expiring Continuing Resolution, forcing leadership to immediately start negotiations on passing the federal budget.  Our federal team at K&L Gates monitors these large bill packages such as the appropriation bills for amendments being “slipped in” that are harmful to the accounts receivables management industry.  As the 2024 elections loom, leadership positions on the House Financial Services (HFS) Committee and Senate Banking Committee are part of a larger game of chess.  Key retirement announcements by Congressman McHenry and Congressman Luetkemeyer, both long term members of HFS and friends of the ARM industry, will create a void.  RMAI is working to educate who we believe will be the future leaders of this key committee.

The CFPB continues to be extraordinarily active both on the policy-setting side and with enforcement actions. RMAI filed Comments at the end of December on the CFPB’s proposed rulemaking on Personal Financial Data Rights. Additionally, the Small Business Administration published the final SBREFA Report on the CFPB’s Consumer Reporting Rulemaking. The SBREFA hearings were held in October. The CFPB is required to review this report which highlights the proposed rule’s impact on small business. A proposed rule is expected to be published in Spring, 2024.

Be sure to attend the Federal Regulatory panel at the RMAI Annual Conference where representatives from the CFPB, OCC and FTC will discuss the activities of their respective agencies.

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, Michigan, New York, New York City, and Oregon. 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 dreid@rmaintl.org. The following is a sample of the legislative activity over the prior month that has direct impact on the industry:

California AB 1160 – This bill would prohibit a college from refusing to provide a diploma for a current or former student on the grounds that the student owes a debt or using the issuance of a diploma as a tool for debt collection. [RMAI is neutral on this bill. RMAI was initially opposed to the bill as the original language contained a provision which prohibited the use of collection agencies for the collection of student debt and prohibited the sale of student debt. RMAI successfully worked to have these provisions removed from the bill.]

Massachusetts SB 629 – 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, 2024. [RMAI has been opposing this bill since 2014 when it was first introduced. After eight years of negotiations and countless amendments, RMAI and the consumer advocates agreed to amendments that will remove RMAI’s opposition to the bill once the bill is amended. 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”; and (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 met with the bill sponsors and key legislators on October 24^th and 25^th to express our concern. This bill will carry over into 2024. We suspect the earliest it could be considered is in April. In the meantime, RMAI will continue to express our concerns with the existing text.]

New York AB 1035 – This bill would prohibit debt collectors from communicating with consumers through the use of email, text messaging, or private communication tools offered by social media companies. [RMAI is strongly opposed to this bill and has the resources of RMAI’s New York lobbyist to help ensure that the bill is not considered.]

New York SB 666-A / AB 4088-A – This bill would establish a state-wide debt collector license in New York under the authority of the Department of Financial Services (the same agency that licenses the banking and insurance industries and which for the last 10 years has promulgated rules for debt collectors). [RMAI has been working with the legislature on amendments to various versions of this bill for years and recently was able to get virtually all our requested amendments incorporated into the latest version.]

Washington HB 2119 – This bill would prohibit wage garnishment on medical debt. “Medical debt” is defined as any obligation for the payment of money arising out of any agreement or contract, express or implied, for the provision of health care services as defined in RCW 48.44.010. “Health care services” means and includes medical, surgical, dental, chiropractic, hospital, optometric, podiatric, pharmaceutical, ambulance, custodial, mental health, and other therapeutic services. [The question RMAI is analyzing is whether a payment of medical debt made on a credit card would qualify it for the garnishment prohibition. If it does, the industry will need to advocate for a credit card exemption.]

Washington HB 2149 – This bill would prohibit any entity that conducts business in the state who collects personal information from a consumer at a point of sale from selling or sharing that consumer’s personal information unless the transacting entity first receives express permission from the consumer that the transacting entity is affirmatively authorized to share or sell that consumer’s personal information. [RMAI is opposed to this bill as it would, with certain asset classes, prevent debt buyers from being able to purchase accounts.]

Regulatory Reminder
The California Department of Financial Protection & Innovation (DFPI) will be requiring debt collectors that are licensed prior to January 1, 2024, to file a 2023 Annual Report by March 15, 2024. The requirements for the annual report can be found in California Financial Code section 100021(a) (1) – (4), (6) and (7). The annual report must be filed through the DFPI portal.

In December, DFPI sent out messages to try and get all licensees set up with designated emails in the DFPI portal system.  If you are licensed in California, please make sure that you have a designated email for the portal. If you have not received an email with instructions on filing the annual report, there is a good chance you have not designated an email. Those designated emails are also used by DFPI for transmitting complaints. Please note, DFPI only uses NMLS for general information.

Third Circuit Holds Losing a Collection Lawsuit Not Enough for FDCPA Violation
Gwiazda v. LVNV Funding, LLC, No. 22-3295, 2023 U.S. App. LEXIS 32747 (3d Cir. Dec. 12, 2023)

A consumer defaulted on her credit card account which was subsequently purchased by a debt buyer that retained a law firm to collect the debt.  The law firm filed suit in municipal court, but the court found the “documentary evidence failed to establish a chain of custody between the original creditor and [the debt buyer].”

The consumer then filed a lawsuit in federal court alleging the debt buyer “misrepresented [its] status as an assignee and sought to collect from her a debt she did not owe, in violation of 15 U.S.C. §§ 1692e and 1692f.”  Those sections of the Fair Debt Collection Practices Act prohibit the use of “false, deceptive, or misleading representation[s],” and “unfair or unconscionable means to collect or attempt to collect any debt,” respectively.  The court granted the debt buyer’s motion for summary judgment and the consumer appealed.

In a non-precedential opinion, the U.S. Court of Appeals for the Third Circuit observed that the consumer’s claims were simply based on the municipal court’s ruling.  This, the Court explained, was insufficient to support her claims since the municipal court’s finding only established the debt buyer’s failure to meet its burden of proof, not whether it was the owner of the account.

Affirming the decision of the trial court, the Court of Appeals noted that “[t]he United States Supreme Court has recognized that losing a debt collection lawsuit does not in itself mean a defendant violated the FDCPA,” citing Heintz v. Jenkins, 514 U.S. 291, 115 S. Ct. 1489, 131 L. Ed. 2d 395 (1995). It was still incumbent upon the consumer to “provide sufficient evidence upon which a reasonable juror could conclude that the [debt buyer and law firm] made false or deceptive statements to succeed at summary judgment.”

Second Circuit Holds No FDCPA Violation for Consumer-Initiated “Breach of the Peace”
Labadie v. NU Era Towing & Serv., Inc., No. 22-2064-cv, 2023 U.S. App. LEXIS 33407 (2d Cir. Dec. 18, 2023)

A consumer defaulted on her car loan and the creditor retained an automobile recovery company to collect the debt or repossess the car.  When the consumer left a mall, she found her car blocked by the company’s vehicle and was told by a company employee that the car was being repossessed.  The consumer objected to the repossession at that time, and several times thereafter.  Ultimately, the consumer relinquished her keys and then proceeded to file an action in federal court against the company “for repossessing a vehicle in a manner that violated Section 1692f(6) of the FDCPA.”

The trial court granted the company’s motion to dismiss for failure to state a claim and the consumer appealed.

The U.S. Court of Appeals for the Second Circuit explained that § 1692f(6) prohibits, in part, “[t]aking or threatening to take any nonjudicial action to effect dispossession or disablement of property if – there is no present right to possession of the property claimed as collateral through an enforceable security interest.”

The consumer argued there was no “present right to possession” because New York law only  “allows a secured party to ‘take possession of the collateral . . . without judicial process, if it proceeds without breach of the peace.’” N.Y. U.C.C. Law § 9-609(b)(2). Of course, the consumer claimed that her own verbal objections to the repossession constituted a “breach of the peace.”

The Court disagreed, siding with the trial court that “three verbal objections to the repossession did not suggest anything remotely approaching facts sufficient to create a breach of the peace.”  The Court relied on guidance provided by the New York Court of Appeals which “defined a breach of the peace as ‘a disturbance of public order by an act of violence, or by any act likely to produce violence, or which, by causing consternation and alarm, disturbs the peace and quiet of the community.’”  The court noted that a “breach of the peace” has typically been found “where the debtor’s verbal objections were followed by actions taken by the repossessor that resulted in violence or were likely to lead to violence.”

Accordingly, in its unpublished opinion, the Court of Appeals affirmed the judgment of the trial court dismissing the consumer’s claims.

Donate an Item for the Annual Conference Silent Auction
RMAI is continuing to accept donations for the 2024 Annual Conference Silent Auction, sponsored by Kino Financial Co., LLC, benefiting the RMAI Legislative Fund. The silent auction will begin Tuesday, February 6^th during the Opening Reception and will end during the Networking Reception in the Exhibit Hall on Wednesday, February 7^th. We are seeking 50 fantastic and unique items for the auction catalog. If you have an item you would like to donate, please complete this Donor Form. Or you can view the Silent Auction webpage to view the auction catalog, register as a bidder, and donate an item.  We look forward to seeing some great donations and generous bidding!

Legislative Fund Donor Appreciation Reception at the Annual Conference
RMAI invites 2023 and 2024 Legislative Fund donors to the annual Legislative Fund Donor Appreciation Reception which will take place at the RMAI Annual Conference in the Atrium on Monday, February 5^th from 4:30-5:30 pm. If you haven’t donated to the Legislative Fund and would like to attend the reception, make your donation online before the Annual Conference.

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.

2024 Educational Webinars
2024 is underway, and RMAI’s Education Committee is hard at work to plan our new webinar programming. Topics for the beginning of the year include Mergers & Acquisitions, Debt Settlement, and Process Servers. We will have more information soon, but in the meantime feel free to register for any of our recorded webinars from 2023 and get caught up on any individual certification credits you may still need.

Recorded Webinars
Recorded on December 20^th you can register for Navigating Wyoming HB 284: Demystifying the Application Process and Q&A. This moderated webinar by Manny Newburger with Barron & Newburger, dives into licensing requirements and challenges along with Bradley Chapman with Wyoming Collection Agency Board and Joel May with Crown Asset Management.

Click here for more information on our live and recorded educational webinars. Contact Shannon Parod at sparod@rmaintl.org 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) and Certified Receivables Vendors (CRV).

CRCP New
Deidra Bowman-Alexander, Crown Asset Management
James Prawel, Independence Capital Recovery

CRCP Renewals
Celeste Anderson, Equifax
Craig Antico, ForgiveCo
Catherine Calko, Spring Oaks Capital, LLC
Andrew Hagerman, Unifund CCR LLC
Chuck Riter, Emergent Business Group
Zach Schwartz, Debt Recovery Solutions, LLC
Brett Soldevila, Security Credit Services, LLC
Tim Sullivan, HS Financial Group

CRB New
Independence Capital Recovery, LLC

CRB Renewals
SCJ Financial Services, LLC

CRV Renewals
Connect1, LLC

Ready to renew or earn your CRCP designation? The upcoming RMAI Annual Conference offers the required initial courses.

EFFECTIVE MARCH 1, 2024: PRE-CERTIFICATION AUDIT IS REQUIRED FOR DEBT BUYERS, COLLECTION AGENCIES & COLLECTION LAW FIRMS PURSUING CERTIFICATION
As previously announced, effective March 1, 2024, the RMAI Receivables Management Certification Program will require debt buyers, collection agencies, and collection law firms  to undergo a pre-certification audit prior to submitting their application for business certification. Through February 29, 2024, the only audit requirement is a full compliance audit conducted at the mid-way point of the three-year certification.

Avoid the extra expense and time commitment of a pre-certification audit, by certifying your business NOW. Please contact Director of Certification & Education, Shannon Parod at sparod@rmaintl.org to get more information.

EFFECTIVE JANUARY 1, 2025: ASSOCIATE DEBT BUYER MEMBERS MUST BECOME CERTIFIED
Also as previously announced, per our recent Bylaws change in 2023, effective January 1, 2025, existing RMAI Associate Debt Buyer members will be required to obtain business certification through RMAI to maintain their RMAI membership.

To certify your company, your Chief Compliance Officer (CCO) must also be individually certified. This requires 24 education credits to be completed every two years, with at least 12 credits obtained through in-person attendance. The RMAI Annual Conference offers the required initial courses and fulfills the 12 in-person credit requirement.

View all certified businesses and vendors.
View all certified individuals.
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 Annual Conference | February 5-8, 2024

2024 RMAI Executive Summit | August 6-8, 2024

The RMAI office will be closed during Annual Conference. If you need to contact us regarding Conference matters during this time, reach out by email or call our cell phones. Non-Conference related requests may have a delayed response.

The RMAI office will also be closed February 19th for President’s Day.

Thank you to our January 1, 2023 through January 15, 2024 Legislative Fund Contributors!

DIAMOND

Cavalry Investments, LLC

Crown Asset Management, LLC

Financial Recovery Services, Inc.

Midland Credit Management

Portfolio Recovery Associates, LLC

Resurgent Holdings, LLC

Velocity Portfolio Group, Inc.

TITANIUM

EverChain

Second Round, LP

TRAKAmerica

PLATINUM

Blitt and Gaines, P.C.

Cascade365 Family of Companies

InvestiNet, LLC

T & I Enterprises, LLC

GOLD

Rausch Sturm, LLP

SILVER

Andreu, Palma, Lavin & Solis,  PLLC

FMA Alliance, Ltd

Klima, Peters & Daly, P.A.

National Credit Adjusters, LLC

National Loan Exchange, Inc.

Provana, LLC

Ragan & Ragan, PC

Velo Law Office

BRONZE

DebtNext Software, LLC

First Financial Portfolio Services, LLC dba FFAM360 Capital

Kredit Financial Inc.

Resurgence Capital, LLC

Troutman Pepper

TrueAccord

BRASS

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

CSS Impact

D & A Services, LLC

Debt Recovery Solutions, LLC

Dynamic Recovery Solutions

FDR Alliance LLC

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.

Hinshaw & Culbertson

Huntington Debt Holding LLC

Imagined.Cloud LLC

InDebted

International Debt Buying Consultants, LLC

Invenio Financial, a Phillips & Cohen Associates company

January Technologies, Inc.

Jefferson Capital Systems, LLC

Kino Financial Co., LLC

Lateral Technology

Law Office of James R. Vaughan, P.C.

Levy & Associates, LLC

Lockhart, Morris & Montgomery, Inc.

Mandarich Law Group LLP

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

Nuvei Technologies Inc.

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

Sequium Asset Solutions, 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

Unifund CCR LLC

Universal Fidelity LP

Vertican Technologies, Inc.

VoApps, Inc.

Womble Bond Dickinson

OTHER

Actuate Law, LLC

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.

Credit Corp Solutions Inc.

David Reid

D1AL

Dynamic Collectors, Inc.

Equabli, Inc

Equifax, Inc.

Gaskell & Giovannini, LLC

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.

Roosen, Varchetti & Olivier, PLLC

Sandia Resolution Company, LLC

Smith Debnam Narron Drake Saintsing & Myers, LLP

Sonnek & Goldblatt, Ltd.

The Oakes Law Firm, LLC

Vargo & Janson, P.C.

Venable LLP

Venandi Systems, LLC

WebRecon LLC