In response to the CFPB Request for Comments regarding the CARD Act, RMA filed comments on June 8. The comments focused on three specific areas:
- How the RMA Certification program has set a higher standard in the debt collection industry and the resulting benefits for consumers and businesses.
- The importance of the sale and resale market.
- The need for first-party inclusion in the rulemaking process as it relates to account data and documentation.
As was covered heavily in the industry press, the CFPB did provide an update on the rulemaking process, in which RMA was pleased to see that the CFPB recognizes the need for first-party inclusion in any rules regarding substantiation of debt.
State Legislative Activity
RMA is currently tracking more than 160 bills at the state level that impact the receivables industry in both positive and negative ways. Here are a few noteworthy bills that have had recent activity:
California SB 16 – This bill would restrict garnishment orders for the collection of private student loans. [RMA and its California lobbyist are working with an industry coalition in opposition to this bill.]
California SB 298 – This bill would exempt the first $4,800 dollars in a deposit account from a bank levies as a means to satisfy court-ordered judgments. [RMA and its California lobbyist are working with an industry coalition in opposition to this bill.]
Colorado SB 216 – This bill clarifies what is required of a debt buying company to bring legal action on a debt. The bill was passed and signed into law after RMA was able to obtain extensive amendments for the protection of the debt buying industry. See related RMA member alert and press release.
Maine LD 1199 (HP 836) – This bill would require debt buying companies to: (1) possess certain data and documents prior to collecting or attempting to collect a debt and (2) provide specific data and documents in the complaint and to the court prior to judgment. [RMA was the only national trade association representing the collection industry to testify in opposition at an April hearing. RMA’s proposed edits to the bill were supported by the Governor’s office and Maine’s Bureau of Consumer Credit Protection and have resulted in substantial amendments to the bill. Among the provisions removed from the bill through the efforts of RMA and its lobbyist: (i) a prohibition on courts from issuing a garnishment order for the benefit of a debt buyer to enforce payment of a judgment; (ii) a prohibition on debt buyers from providing an affidavit as prima facie evidence; (iii) a prohibition on the sale of receivables; (iv) a requirement that all debt buying employees be licensed by the state; and (v) the establishment of a Class C crime.]
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 to oppose the bill in its current form.]
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 E&O insurance. [RMA lobbyist has been retained to oppose the bill in its current form; bill reported to Ways & Means Committee where it awaits further action.]
If you are interested in obtaining a copy of the RMA state tracking list, please contact David Reid at firstname.lastname@example.org.
The following are noteworthy court decisions recently handed down that may impact RMA members:
U.S. Supreme Court Holds Debt Purchaser Collecting Its Own Debt Is Not Subject to FDCPA
Henson v. Santander Consumer USA, Inc., United States Supreme Court, No. 16-349 (June 12, 2017)
A purchaser of a defaulted debt who then seeks to collect the debt for itself is not a “debt collector” subject to the federal Fair Debt Collection Practices Act under an opinion delivered by the U.S. Supreme Court. The issue before the Court was whether a purchaser of defaulted debt meets the FDCPA’s definition of a “debt collector” as one who “regularly collects or attempts to collect . . . debts owed or due . . . another.” 15 U. S. C. §1692a(6). Here, Santander Consumer USA Inc. acquired defaulted loans from CitiFinancial Auto and then began to collect on those loans. The petitioners argued this activity made Santander a debt collector subject to the FDCPA. The Fourth Circuit Court of Appeals disagreed because the debt purchaser was not seeking to collect a debt “owed . . . another.” The Supreme Court affirmed in a unanimous decision. The opinion did not consider whether a purchaser of defaulted debt is engaged “in any business the principal purpose of which is the collection of any debts.” §1692a(6). RMA urges caution when interpreting the applicability of Henson to your operations.
2nd Cir. Upholds Dismissal of Data Breach Action for Lack of Standing, Distinguishes 7th Cir. Rulings
Whalen v. Michaels Stores, Inc., Second Circuit Court of Appeals, Nos. 16-260 (L), 16-352 (XAP) (May 2, 2017)
The U.S. Court of Appeals for the Second Circuit recently affirmed a lower court’s ruling dismissing a complaint arising from a retailer’s data breach resulting in disclosure of credit card information. The trial court granted the retailer’s motion to dismiss finding the plaintiff’s allegations did not establish Article III standing because she did not allege any charges were made to her credit card and did not allege, with any specificity, that she had spent time or money monitoring her credit to prevent identity theft or fraudulent credit activity.
4th Cir. Vacates $11M FCRA Class Action Judgment Citing Spokeo
Dreher v. Experian Information Solutions, Inc., Fourth Circuit Court of Appeal, No. 15-2119 (May 11, 2017)
The U.S. Court of Appeals for the Fourth Circuit recently vacated and remanded for dismissal a trial court’s summary judgment ruling in favor of the plaintiff in an $11 million, 69,000-member class action under the federal Fair Credit Reporting Act (FCRA). The defendant credit reporting agency had listed a tradeline in its consumer reports under the name of a defunct credit card issuer when in fact the information was being provided by a servicer. The consumer disputed the reporting to the defunct issuer, but never received a response. The Fourth Circuit was not convinced plaintiff suffered any injury, finding that the agency’s failure to identify the correct furnisher had no practical effect on the plaintiff. The appeals court applied the recent U.S. Supreme Court ruling, Spokeo v. Robins, explaining that, a plaintiff cannot allege a “bare procedural violation, divorced from any concrete harm” and still gain standing to sue. So while the agency’s reporting may have been inaccurate, that inaccuracy, absent a concrete harm, cannot serve as a basis for FCRA liability.
211 Unanswered Collection Calls, Alone, Not Sufficient to Sustain WVCCPA Claim
Valentine & Kebartas, Inc. v. Lenahan, Supreme Court of Appeals of W.V., No. 16-0127 (June 12, 2017)
West Virginia’s highest court reversed a judgment against a debt collector under the West Virginia Consumer Credit and Protection Act, finding that although the debt collector had placed 211 collection calls to a consumer over an eight-month period, the mere making of the calls, alone, is not sufficient to demonstrate the calls were placed by the debt collector with the “intent to annoy, abuse, oppress or threaten” under West Virginia Code § 46A-2-125(d). According to the decision, a violation can only be demonstrated by evidence that the debt collector’s purpose for the calls was not to collect the debt, but to harass the recipient. The opinion found it dispositive that the consumer never answered any of the calls, the calls were otherwise made in compliance with state and federal law and the consumer never communicated with the collector, even to dispute the debt. The consumer’s silence in response to the call would not be used to impute knowledge to the debt collector that the consumer did not want to receive the calls.
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 pre-recorded sessions that are available 24/7.
RMA offers a robust lineup of educational programs for professional development and credits towards your individual Certified Receivables Compliance Professional (CRCP) designation.
- CCO: How to Survive an External Audit or Regulatory Exam – Tuesday, June 13, 2017
- Getting Your Feet Wet: Purchasing a New Type of Debt – Tuesday, June 20, 2017
- Recorded Webinars: Did you miss a live webinar? No worries, they are all recorded and available on our website.
Working towards your Certified Receivables Compliance Professional designation and need live education credits? Earn up to 15 credits towards certification at RMA’s 2017 Executive Summit August 1-3 at the Resort at Squaw Creek in Lake Tahoe, California. Check out the agenda for more information on speakers and activities. Register today!
Certification Help: Contact Michelle Wren at (916) 482-2462 or email@example.com.
Congratulations to our newly certified individuals and companies!
Garon Robinett, JH Capital Group
Daniel Consuegra, Law Offices of Daniel C Consuegra, PL
Diaz & Associates, Inc.
New Members (from May 13, 2017 – June 14, 2017)
Welcome new RMA members!
The RMA membership continues to grow. Welcome our newest members:
Heritage Funding, LLC, Minnesota
Line, LLC, Florida
National Check Resolution, Inc., Georgia
Quality Business Management Resolution, Inc., California
Read more about these members and other members on the Member Search page.
Did you Know?
RMA archives all of its member communications. If you’ve missed a Member Alert or want to read a past issue of RMA Insights, click here to access these and other communications.
- For newer RMA members learning about the industry, RMA has informative white papers that provide an excellent overview of the industry.
- RMA’s Compliance & Legal section is a resource center for members to quickly assess what each state requirements are to ensure compliance on collection-related matters.
- Submit an idea for a webinar or live session. If you have a topic that would resonate with our membership, submit a proposal.
Going once, going twice—don’t miss your opportunity to participate in the Executive Summit silent auction! All proceeds will go to RMA’s Legislative Advocacy Fund. Items already up for bid include golf clubs, Apple products, college football tickets, quality wine, and much more! For information about donating an item, contact Barbara Souza. For more information about the Executive Summit—held this year in Lake Tahoe, California—please visit the Executive Summit page.
2017 Legislative Fund Contributors
Thank you 2017 Legislative Fund contributors. Your support allows us to influence threatening legislation, while also promoting and preserving the best interests of our members. Make your contribution today!
Cavalry Investments, LLC
Digital Recognition Network
U.S. Equities Corp.
Capital Alliance Financial, LLC
Full Circle Financial Services, LLC
International Debt Buying Consultants, LLC dba Portfolio Management Group Maurice Wutscher, LLP
Mjollnir Group, Inc.
The Bureaus, Inc.
A-1 Collection Service
Atlantic Credit & Finance, Inc.
Capital Collection Management, LLC
Faloni & Associates, LLC
First Financial Asset Management, Inc. FFAM360
Jefferson Capital Systems
National Check Resolution, Inc.
National Recovery Solutions
Nationwide Credit & Collection, Inc.
TCF & Associates
US Asset Management
USI Solutions, Inc.