RMAI Update September 2024

With less than two months before the November elections, an air of uncertainty lingers throughout Washington. Regardless of the outcome in the U.S. House and Senate elections, current Members of Congress will hold a lame duck session that could be filled with activity.

We’re likely to see utilization of the Congressional Review Act (CRA), an oversight tool that Congress can use to overturn final rules issued by federal agencies. While not always successful, this is a powerful tool that can be utilized to review recent activity from the CFPB, among other federal agencies. Timing restrictions are built into the CRA, though it’s possible to see Members of Congress raise concerns through the CRA process on rules like medical debt reporting. Rep. Ogles (R-TN) recently introduced a resolution of disapproval under the CRA at nullifying the Consumer Financial Protection Bureau (CFPB) Final Rule on Registry of Nonbank Covered Persons Subject to Certain Agency and Court Orders (the “repeat offender” rule).

While Congress failed to move an artificial intelligence (AI) bill through this year, there continues to be increased activity at the federal regulatory level. Last month the Federal Communications Commission (FCC) voted to propose new rules that would set definitions for what constitutes an AI robocall or text. The U.S. Department of Treasury is also seeking information on the use of AI. The department issued a Request for Information on the uses, opportunities, and risks of AI in the financial services sector. These acts, and those of other federal agencies, are indicative of the federal government desiring to move towards formal regulatory proposals.

On September 5, 2024 the CFPB issued its annual Fair Debt Collection Practices Act report. Medical debt, rental debt, and consumer complaints were among the topics focused on in the report. The report stated that the CFPB received approximately 109,900 debt collection complaints in 2023. The number one complaint type was “attempts to collect debt not owed.” In a June 2024 meeting with RMAI leadership, Director Chopra shared that the CFPB expects a high number of debt collection complaints simply by nature of the business.

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 to 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 is furnished to a consumer credit reporting agency. The bill narrowly defines medical debt to mean “a debt owed by a consumer to a person whose primary business is providing medical services, products, or devices, or to the person’s agent or assignee, for the provision of medical services, products, or devices.” [RMAI had opposed earlier versions of this legislation due to those versions having a broad definition of “medical debt” that would have included credit cards, home equity lines of credit, general-purpose lines of credit, and general-purpose unsecured installment loans. RMAI had advocated for a narrower definition, which was ultimately adopted in the final weeks of the legislature, which mirrors the definition used by the CFPB in their proposed rulemaking.]

California SB 1286 – This bill would expand the scope of the Rosenthal Fair Debt Collection Practices Act to prohibit debt collectors from engaging in unfair or deceptive acts or practices in the collection of commercial debts owed by a natural person of $500,000 or less that were entered into, renewed, sold, or assigned on or after July 1, 2025. [RMAI and a coalition of industry participants were adamantly opposed to this bill. While the industry was not opposed to a new act that statutorily mandated certain best practices in the collection of commercial debt, placing these provisions within a consumer collection act is misguided and fundamentally unworkable. We believe this broad scope will result in an overwhelming burden on businesses and creditors alike, leading to significant operational challenges.  For example, while individual consumers have the right to demand that creditors cease contact, it is unclear under SB 1286 whom a creditor or collector may contact concerning the covered commercial debts. This ambiguity raises concerns about potential violations of privacy and confidentiality, particularly regarding the disclosure of debt details to employees handling accounts payable. This bill passed both houses of the legislature, with the minority party in opposition. The industry has written a letter to Governor Newsom requesting a veto and has had several calls with senior staff to the Governor.]

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 has had in-person meetings with the bill sponsors and key legislators, followed by several virtual meetings with the Senate sponsor, to express our concerns. We recently received several amendments proposed by the sponsor which are currently under review but would appear to make the bill much more acceptable.]

Eleventh Circuit Holds Self-Inflicted Harm Does Not Establish Article III Standing
Matos v. Lexington Place Condo. Ass’n, No. 22-11875, 2024 U.S. App. LEXIS 19071 (11th Cir. Aug. 1, 2024)

A consumer purchased a condominium and, in conjunction, agreed to pay homeowner’s association assessments and administrative late fees.  After several months of ownership, he began leasing the condominium and gave a friend power of attorney to collect the rent.

Eventually, debt collectors hired by the association sent several letters to the consumer seeking payment of allegedly past-due assessments. When the consumer failed to pay, the collectors filed a lien foreclosure complaint, and the consumer responded with a lawsuit alleging violations of the federal Fair Debt Collection Practices Act and the Florida Consumer Collection Practices Act.

The association settled with the consumer, and the consumer and the collectors filed motions for summary judgment. Because the consumer began leasing the property shortly after purchase, the issue was whether “the homeowner’s association assessments qualified as actionable debt under the federal and state Acts. To be actionable ‘consumer debt’ under the Acts, the debt needed to be ‘primarily for personal, family, or household purposes.’”

Agreeing with the collectors that “the obligation to pay condominium assessments was not for a consumer purpose,” the trial court entered judgment in favor of the collectors and the consumer appealed.

The U.S. Court of Appeals for the Eleventh Circuit, in a non-precedential decision, bypassed the arguments made before the trial court and instead addressed Article III standing.  The Court explained that the consumer “had to present evidence that showed the ‘irreducible constitutional minimum’ of standing: (1) injury in fact, (2) traceability, and (3) redressability,” and focused on the injury in fact requirement.

In this case, the consumer failed to meet that requirement “The witnesses he called and the exhibits he introduced into evidence did not show an injury that was traceable to the letters the debt collectors sent or the lien foreclosure complaint they filed.

The consumer argued that “he did not touch the money he made from renting the condo because of the debt he owed on the assessments,” and that this “established a concrete injury because the inability to have and use money to which a party is entitled is a concrete injury.”

The Court found this unpersuasive because the consumer had testified “that he decided not to use his rent revenue to pay for the debts because he didn’t know what the charges were for,” which fell short showing he had an “inability to have and use the money.”  On this issue, the court concluded that “plaintiffs cannot manufacture standing merely by inflicting harm on themselves.”

The Court, therefore, vacated the trial court’s judgment and remanded with instructions to dismiss the case without prejudice.

Contribute to the Legislative Fund with Your 2025 Renewal
Renewal invoices will begin distribution on October 1^st, 2024, and continue through the end of the year. This is a great time to contribute to RMAI’s Legislative Fund while you renew your membership dues. This year, RMAI has worked diligently across the country to represent our members, with our most recent success being California SB 1061. Earlier versions of this bill included a broad definition of “medical debt” and were opposed by RMAI. In the final weeks of the legislature, following RMAI’s advocacy for it, a narrower definition was adopted which mirrors the CFPB’s definition (see the “State Update” in this newsletter for more detail). We hope to make 2025 another great year for state and federal advocacy, and your donations help those efforts. Please consider donating to RMAI’s Legislative Fund with your renewal this year.

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. Click here to see a list of current contributors on the right-side bar.

Upcoming Webinar
Register for our September 24th webinar, How State Exemptions Impact Legal Collections Debt where our presenters will discuss the legislative changes that are impacting garnishment laws, statutes of limitation, and property exemptions with a focus on Arizona & Florida.

Recorded Webinars
Recorded on August 28, 2024, you can register for The Fight Over Medical Debt. In this webinar 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.

CLE Webinar Series Coming Soon
The Education Committee is developing a CLE webinar series of four (4) to five (5) webinars geared for attorneys and will also qualify for CLE credit. More details to come!

Click here for more information on our live and recorded educational webinars. Contact Shannon Parod-Tsui at [email protected] to find out more about sponsoring an RMAI webinar.

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

CRCP New
Edward Celenza, Crown Asset Management, LLC
Amanda Kenney, On the Run Legal Solutions, LLC
Sharon Messer, SMS Financial Services, LLC
Kimberly Monty, Jormandy, LLC
Nana Osei, EverChain
Aurora Sain, RMAI
Robert Winters, Crown Asset Management, LLC

CRCP Renewals
Addison Crawford, Midland Credit Management/Encore Capital Group
Anne Gonzales, Crown Asset Management, LLC
Patrick Green, Crown Asset Management, LLC
Karan Grover, Provana
Elizabeth Haug, Poser Investments, Inc.
Anthony Kuhns, Convergence Acquisitions, LLC
Seth Miller, CASA Receivables Management, LLC
Kelli Moes, Financial Recovery Services, Inc.

CRB Renewals
Acctcorp International
Accelerated Portfolio, Inc
Poser Investments, Inc.

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

Get Your Business Certified Before January 1st!
With only a few months left in 2024, now is the time to get your business certified before the year is over and just in time to see your company on our list of Certified Businesses at the 2025 Annual Conference.

Requirements to complete the business or vendor certification are below:

1. Ensure you have one individual certified by completing 24 credits of continuing education
2. Review the certification standards outlined in Appendix A (debt buyers, collection agencies, and collection law firms) or Appendix B (vendors, brokers, process servers, defense law firms) of the Certification Governance Documentv to ensure you are in compliance
3. Schedule a pre-certification audit using one of RMAI’s Authorized Audit Providers.
   • Auditors will review your policies in procedures to help ensure compliance
4. Submit your certification application once your pre-certification audit is approved.
   • Certified Receivables Business Application
   • Certified Receivables Vendor Application

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-Tsui at [email protected] to set up a call.

View educational requirements for certified individuals.

Renew Your Membership and Help RMAI Grow
It’s that time of year! Renewal invoices for RMAI membership will be sent out next month. As renewal invoices are distributed, our Q4 offer will also take effect, making it a great time to refer a peer to join RMAI. If you know someone who would make a great member, let them know that new members joining October 1st – December 31st, 2024 will receive membership until 2026. Offer to be a reference for them and direct them to our online application to take the first step towards membership. RMAI thanks you for your membership and your continued support, and we look forward to another amazing year with you!

Welcome, New Members
Atlas Collections, Inc. | IN
LTD Acquisitions, LLC. | TX
Advanced Business Computers of America, Inc. | FL
Rockdale Capital Management | OH
Credit Recovery Systems, LLC | NY
Pronto Connects | CO

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

Thank you to our Leg Fund Contributors (September 1, 2023 – September 12, 2024)!

DIAMOND
Crown Asset Management, LLC
Portfolio Recovery Associates, LLC
Resurgent Holdings, LLC
Second Round, LP

TITANIUM
Financial Recovery Services, Inc.
TRAKAmerica

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

SILVER
Andreu, Palma, Lavin & Solis,  PLLC
Blitt and Gaines, P.C.
DebtNext Software, LLC
FirstSource
InvestiNet, LLC
Klima, Peters & Daly, P.A.
National Credit Adjusters, LLC
Velo Law Office

BRONZE
Equabli, Inc
First Financial Portfolio Services, LLC dba FFAM360 Capital
Security Credit Services, LLC
Superlative RM
Tromberg, Morris & Partners, PLLC

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
Exelero Corp.
FDR Alliance LLC
FMA Alliance, Ltd
General Collection Co.
Genesis Recovery Services
Glass Mountain Capital, LLC
Gordon, Aylworth & Tami, P.C.
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
Non-Member Transactions
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
Smith Debnam Narron Drake Saintsing & Myers, LLP
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.
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
Caddis Funding LLC
CMS Services
Cohen & Cohen Law, LLC
Comtronic Systems, LLC
Connect International
Consuegra & Duffy, PLLC
Converging Capital, LLC
Convoke, Inc.
David Reid
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.
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