RMAI Update June – 2021

CONTENTS

Executive Summit 2021          Federal Activity          State Legislative
Court Decisions      Legislative Fund          Education          Certification
Membership     Industry Events        Good News

Please click the banner headers below for more information on your chosen topic.

Register for the Executive Summit! Add Golf for Monday while spots are still available. In-person networking, education and more are all in store for you at Stowe. Top off Tuesday and Wednesday with after-hours at the fire pit. Reconnect with friends, family and colleagues and catch up on industry developments and guidance.

Reserve your room at The Lodge at Spruce Peak. The RMAI room block closes July 9. Review the online Agenda to plan your super Summit experience.

The Comprehensive Debt Collection Improvement Act passed the House on a party-line vote and is now in the Senate Banking Committee. RMAI Federal Counsel is closely monitoring activity and is in contact with key congressional staff to determine how best to engage. RMAI will work with Chair Brown’s office to provide education, supplemented by available data demonstrating the unintended consumer harm caused by many of the proposals contained in this omnibus package.

Rohit Chopra continues to await Senate confirmation as the new CFPB Director. We do not expect to see a vote scheduled until the Senate confirms President Biden’s nominee, Lina Kahn, for the vacant FTC Commissioner position. To date, a confirmation hearing has not been set for Ms. Kahn.

The deadline for comments for the CFPB proposed extension of the implementation date of the debt collection rule has passed. Although we expect the CFPB will extend the implementation date, as of now, they have not issued a final rule. RMAI continues to monitor all activity coming from the CFPB and is seeking meetings where appropriate.

STATE LEGISLATIVE ACTIVITY

Last week RMAI submitted comments on the California Department of Financial Protection’s proposed regulations on the new Collection Agency Licensing Act which takes effect on January 1, 2022. You can read RMAI’s comments.

The following are some recent developments at the state legislative level that might be of interest:

California AB 1020 – This bill would among other things prohibit the sale of hospital debt to debt buyers. [RMAI strongly opposes the provision of the bill which prohibits the sale of an entire asset class of debt. We view this as a dangerous precedent which could be used in the future to prohibit the sale of other asset classes.]

California SB 531 – This bill would require collection agencies to provide certain data and documents to a consumer upon request. The data and documents are identical to the requirements for debt buyers contained in the California Fair Debt Buying Practices Act which was adopted in 2013. The bill would also prohibit creditors from selling or assigning consumer debts to a third party unless the creditor provides the debtor a notice (“Goodbye Letter”) within five days of the sale or assignment that contains the dollar amount of the outstanding debt and the name of the party to whom the debt was sold or assigned. [The author has already amended the bill to address several concerns raised by RMAI. RMAI continues to work with the author on additional amendments.]

Nevada SB 248 – On June 2nd, this bill was signed into law as Chapter 291 of the Laws of 2021 and is effective July 1, 2021. The law limits interest charged by a collection agency to 5% when collecting on a medical debt and prohibits a collection agency from bringing suit on a medical debt if the value of the medical debt is $10,000 or less. “Medical debt” is broadly defined and would include medical debt charged on a credit card. On June 11th, the State of Nevada Financial Institutions Division (NFID) sent an email to all Nevada licensed collection agencies to inform them of this new law. NFID stated, “SB248 is for medical debt collections only and may not apply to your agency. Should you have any questions, please email fidmaster@fid.state.nv.us with a subject line of SB248. We will answer your questions as soon as possible.” [RMAI, through our Nevada lobbyist, negotiated a carve-out from the definition of “medical debt” for open and closed credit lines, provided that the credit lines were not created exclusively for medical debt. RMAI would strongly recommend that our members who collect medical debt share this law with their legal counsel for additional analysis.]

New York SB 153 – This bill which is known as the “Consumer Credit Fairness Act” would: (1) reduce the statute of limitations from six to three years on consumer credit transactions; (2) prohibit the revival of a debt that is beyond the statute of limitations through the making of a payment; (3) require the mailing of a notice by the court clerk after filing proof of service of the summons and complaint; (4) require specific data to be included in the complaint; and (5) require the provision of form affidavits. [This bill has passed both houses of the State Legislature and the Governor is expected to sign the bill into law. RMAI had been actively opposing this bill since it was first introduced in 2009. After years of industry offers to negotiate the bill being rejected, the sponsors finally expressed a desire to discuss our concerns. After 13 months of negotiations, the industry was successful at: (1) removing language which would have expunged all debt at the expiration of the statute of limitations; (2) removing pre-charge-off itemization requirements on revolving lines of credit; (3) changing the point of reference on data and documents from origination to charge-off; (4) clarifying a provision of existing law, that some judges were misinterpreting, to make clear that creditors are not required to inform consumers when their accounts are sold in order for the successor parties in interest to be able to collect on those accounts; and (5) extending the effective date by six months to provide the industry time to adjust operational controls as well as accelerate any legal actions under existing law.

June 2021

Second Circuit Reaffirms Avila as it Applies to Settlement Offers
Cortez v. Forster & Garbus, LLP, No. 20-1134, 2021 U.S. App. LEXIS 16730 (2d Cir. June 4, 2021)

A collection law firm sent a letter to a consumer offering three options to settle a debt for less than the total amount owed. The offers required payment of specific amounts by specific dates. The consumer filed suit claiming that the letter violated the FDCPA, as interpreted in Avila v. Riexinger & Associates, LLC, 817 F.3d 72 (2d Cir. 2016), “by failing to disclose that interest was continuing to accrue on his balance.”

The trial court denied the law firm’s motion for summary judgment despite its argument that Avila held a debt collector does not violate the FDCPA if it makes a settlement offer “clearly stat[ing] that the holder of the debt will accept payment of the amount set forth in full satisfaction of the debt if payment is made by a specified date.”

The trial court entered summary judgment in favor of the consumer, denied the law firm’s motion for reconsideration, and the law firm appealed.

The U.S. Court of Appeals for the Second Circuit acknowledged its holding in Avila, “that the FDCPA requires debt collectors, when they notify consumer of their account balance, to disclose that the balance may increase due to interest and fees.” However, it also recited the safe harbors:

[A] debt collector will not be subject to liability under Section 1692e for failing to disclose that the consumer’s balance may increase due to interest and fees if the collection notice either [1] accurately informs the consumer that the amount of the debt stated in the letter will increase over time, or [2] clearly states that the holder of the debt will accept payment in the amount set forth in full satisfaction of the debt if payment is made by a specified date.

The Court of Appeals noted that the trial court relied on a suggestion made in Avila that a consumer’s understanding could be simplified if, when an offer is made to settle a debt for a specific amount by a specific date, the debt collector also advised “that the amount due would increase by the accrual of additional interest of fees if payment is not received by that date.” Nevertheless, the Court of Appeals explained that despite that suggestion, “Avila held only that a debt collector must ‘either’ disclose that interest and fees continue to accrue ‘or’ offer to extinguish the debt in exchange for a specified payment.”

Also disagreeing with the trial court’s finding that it was “debatable” whether the letter clearly stated the debt would be fully discharged upon payment, the Court of Appeals opined that the letter “could only reasonably be read one way: as extending an offer to clear the outstanding debt upon payment of the specified amount(s) by the specified date(s).”

Based on this, the Court reversed the trial court’s decision and directed it to enter judgment in favor of the law firm.

Seventh Circuit Holds, Again, That FDCPA Violation Alone Does Not Confer Standing
Markakos v. Medicredit, Inc., No. 20-2351, 2021 U.S. App. LEXIS 14339 (7th Cir. May 14, 2021)

The consumer filed a lawsuit against a debt collector for alleged violations of the FDCPA because two letters she received from the debt collector recited different amounts owed and because the creditor was not clearly identified. The trial court granted the debt collector’s motion to dismiss for lack of standing and failure to state a claim, and the consumer appealed.

The U.S. Court of Appeals for the Seventh Circuit began its decision by stating: “In the last five months, we’ve held eight times that a breach of the Fair Debt Collection Practices Act (‘FDCPA’) does not, by itself, cause an injury in fact. We now repeat that refrain once more.”

The Court provided its usual analysis of the requirements for Article III standing, landing on the need for an injury in fact. The consumer argued “that her injury in fact [was] informational in nature – the FDCPA entitled her to certain information about her debt amount and the name of her creditor, and she didn’t get it.”

However, the Court noted that the consumer failed to show how the alleged misinformation in the letters harmed her in any way. Citing its numerous recent decisions denying standing based on similar facts, the Court affirmed the trial court’s dismissal, concluding:

[The consumer] has failed to show an injury in fact for a commonsense reason: she has not paid a dime, and she has properly disputed her debt. Thus, “[w]inning or losing this suit would not change” [the consumer’s] prospects. If this case went forward and [the consumer] lost, she would continue disputing her debt based on the inadequacy of the services provided. And if she won, she would do just the same; not a penny would change hands, and not a word or deed would be rescinded.

Sixth Circuit Finds No Standing for Violation of FACTA Truncation Requirement
Thomas v. Toms King (Ohio II), LLC, No. 20-3977, 2021 U.S. App. LEXIS 13884 (6th Cir. May 11, 2021)

A consumer made a purchase at a fast-food restaurant location where she allegedly received an electronically printed receipt containing the first six and last four digits of her credit card number. She then filed a putative class action complaint against the restaurant and its related corporate entities alleging the restaurant’s receipts violated the federal Fair and Accurate Credit Transactions Act (“FACTA”) “truncation requirement” which is an identity theft measure that provides “no person that accepts credit cards or debit cards for the transaction of business shall print more than the last five digits of the card number or the expiration date upon any receipt provided to the cardholder at the point of sale or transaction.” 15 U.S.C. § 1681c(g)(1).

The trial court dismissed the complaint without prejudice on the basis it lacked subject matter jurisdiction over the claims because the consumer failed to demonstrate any harm to her identity based upon the restaurant’s technical violation of FACTA, and that allegations of hypothetical future injury were insufficiently concrete to confer standing under Article III. The consumer appealed.

On appeal, the Sixth Circuit noted that “to satisfy Article III standing requirements, Plaintiff must show that (1) she suffered an injury in fact, (2) caused by defendants, that (3) is redressable by a judicial decision. (Spokeo v. Robins, 136 S. Ct. 1540, 1547 (2016).” The Court further noted that the injury-in-fact requirement is not automatically satisfied by a statutory violation, but requires a “concrete injury even in the context of a statutory violation.”

The consumer contended that she suffered a concrete injury based on a congressional grant of a statutory right and remedy. The Sixth Circuit disagreed, stating that “[a]fter Spokeo, we know there is no such thing as an ‘anything-hurts-so-long-as-Congress-says-it-hurts theory of Article III injury.’ In other words, this argument is without merit.”

While acknowledging that “the violation of a procedural right granted by statute can be sufficient in some circumstances to constitute injury in fact,” the Sixth Circuit rejected the consumer’s claim that the risk of identity theft constituted a concrete injury, aligning itself with the findings of the Second, Third, Ninth and Eleventh Circuits when presented with identical facts.

The consumer further claimed that the increased risk of injury constituted real harm, arguing that FACTA creates a concrete interest “vest[ing] consumers with an interest in using their credit and debit cards without facing an increased risk of identity theft,” citing Jeffries v. Volume Servs. Am., Inc., 928 F.3d 1059, 1064 (D.C. Cir. 2019). In Jeffries, the D.C. Circuit held that the plaintiff did suffer an injury in fact because the receipt, which contained all 16 digits and the expiration date, “contained enough information to defraud [the plaintiff].”

The Sixth Circuit reasoned that the Jeffries court found standing because the complaint alleged sufficient facts to establish that a violation of the statute actually caused harm or risk of harm, but that no such risk existed here because the consumer’s complaint failed to allege how “the challenged violation of [her] statutory right harmed or created a risk of real harm to the concrete interests protected by FACTA.” The consumer did not “allege that the receipt was lost, stolen, or seen by a third set of eyes, inside or outside of Defendants’ employ.”

Similarly, because there was no allegation of third-party disclosure, the Sixth Circuit rejected the consumer’s argument that the intangible harm caused by the purported violation was akin to the common law torts of breach of confidence and invasion of privacy.

Because the consumer failed to satisfy Article III’s injury in fact requirement, the trial court’s dismissal of her FACTA claim was affirmed.

Eighth Circuit Addresses Privity of Contract for Reassigned Accounts
Klein v. Affiliated Grp., Inc., 994 F.3d 913 (8th Cir. 2021)

A consumer obtained services from a healthcare provider which denied her application for financial assistance to pay for the services. The healthcare provider retained a debt collector (“Collector 1”) to collect the outstanding debt, and Collector 1 sent a letter to the consumer in November 2017 informing her that “the below listed account(s) has been turned over to us by our client, who has given you an opportunity to satisfy this obligation.” The letter did not reference the provider’s financial assistance policy.

In January 2018, all of Collector 1’s contracts, assets, employees, obligations, and rights including its written agreement with the medical provider for debt collection services, were assigned or transferred to a successor entity (“Collector 2”), and all accounts were consolidated under Collector 2’s name. In March 2018, Collector 2 sent a similar letter to the consumer seeking to collect the outstanding medical debt and also omitting information regarding the provider’s financial assistance program.

Of note, the Minnesota Attorney General has a requirement that certain healthcare providers enter into written contracts with third-party debt collectors obligating them to “comply with federal law and [requiring the provider] to confirm that the patient was given a reasonable opportunity to apply for charitable care or other need-based relief.”

The consumer filed suit alleging the collectors violated the FDCPA by: (1) failing to have a written contract with the provider as required; (2) failing to include information about the provider’s financial assistance program; and (3) making false, deceptive, or misleading statements in the March 2018 letter.

The trial court granted the debt collectors’ motion for summary judgment, entering judgment in the debt collectors’ favor and the consumer appealed.

On appeal, the consumer first argued that the trial court “erred by granting summary judgment while there was still a genuine dispute over material facts.” Specifically, she alleged the record did not evidence a merger between the collectors and, thus, no contract between the provider and successive entity, Collector 2.

Although both sides argued over facts related to the integration and assignments of contract rights between the debt collector entities, the Eighth Circuit reasoned that the issue of whether there was a formal merger was immaterial if the assignment of contract rights from Collector 1 to Collector 2 created a contract between the provider and Debt Collector 2 that would satisfy the state’s written contract requirement.

Based on Minnesota contract and assignment law, the Eighth Circuit determined that because the trial court established that there was a written agreement between the provider and Collector 1, the assignment placed Collector 2 in privity with the original parties. Accordingly, no dispute of a material fact existed on that issue.

The Eighth Circuit next considered the consumer’s claim that the debt collectors violated § 1692e(5) and § 1692f(1) of the FDCPA by attempting to collect her debt without notifying her of the provider’s financial assistance policy.

The trial court concluded that because the debt collectors “are not hospital organizations” and “do not operate hospital facilities,” the Treasury Department regulations requiring the provider to include its financial assistance policy in its billing statements did not apply.

Accordingly, the Eighth Circuit held that the trial court did not err in granting summary judgment in favor of the debt collectors.

Silent Auction Coming Soon!
RMAI’s Summer Virtual Silent Auction is almost here! Starting on July 12th and ending at the Executive Summit on August 3rd, you can bid virtually on amazing items and help support RMAI’s Legislative Fund. The silent auction is open to all RMAI members. You can even invite your friends, family and colleagues to participate.

We are accepting silent auction item donations now as we prepare for our launch date.

Donate an item or donate to the Legislative Fund directly by donating online or sending a completed contribution form via email or by mail.

For suggested donation items, feel free to take a look at the Amazon Wishlist.

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

Call for Presentations for the 2022 Annual Conference
RMAI is calling on our members to submit proposals for the 25th Annual Conference held at the Aria Resort & Casino in Las Vegas, February 7-10, 2022. We are seeking proposals for 50-minute educational sessions sharing your expertise and experience while addressing important issues, relevant industry information and best practices. View the requirements for submission and then submit your proposal here. Deadline to submit proposals is Monday, August 9, 2022.

Watch Webinars 
RMAI’s Education Committee is continuing to plan relevant webinars for our members, including the upcoming June 22nd webinar, In Case You Missed It: An Update of the Receivables Management Industry, which will cover various topics you may have missed amidst the flurry surrounding the recent Hunstein case and Regulation F. View our Live Webinar page on the RMAI website for future webinars.

View our Online Education selection and register for previously recorded webinars including the most recent webinar hosted on June 9th, Returning to the Workplace: Considerations for a New Normal. All recorded monthly webinars are FREE to RMAI members. (Special series and select required courses for certification are paid at member rate.)

Sponsor Webinars
Get your business name and logo in front of a captive audience of your colleagues and RMAI members when you sponsor a webinar! View our Webinar Sponsorship Flyer for details and benefits of a sponsorship.

Contact Shannon Parod at sparod@rmaintl.org or 916.482.2590 with any questions.

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

CRCP – New
Sarah Daley – Galaxy Capital Acquisitions
Angelica Morgana – River Heights Capital
Rebecca Napier – DebtTrader
Susan Rockhold – Paramount Recovery Systems

CRCP – Renewals
Michael Adams – Integras Capital Recovery LLC
Kimberlee Basha – Autovest LLC
Mark B. Naiman – Absolute Resolutions Corp
Katherine O’Brien – United Holding Group
Shannon Parod – Receivables Management Association International
Gerald Terrill, Jr. – Superlative RM
John Touhey – The Law Office of John P. Touhey, PLLC

CRB – New
Paramount Recovery Systems
Steel River Systems LLC

CRB – Renewals
Portfolio Group Investors (PGI)

Start earning your CRCP with this Certification Starter Bundle featuring recorded education sessions from the 2021 Annual Conference! If you’re looking to earn your CRCP individual certification, we offer this Certification Starter Bundle which includes the three (3) required courses that are part of the 24 credits needed to complete the certification process. This bundle costs $275 for RMAI members, which is a savings of $113 compared to purchasing individually! The three (3) courses are:

• Introductory Survey Course on Receivables Management (4 credits)
• Ethics as the Cornerstone of a Compliance Management System (2 credits)
• Diversity, Inclusion and Elimination of Bias: Reimagining the Post Pandemic Workplace (1 credit)

You can take your remaining credits from our recorded webinars found on the online education section of the RMAI website (many FREE with Membership)! Due to COVID-19, RMAI is temporarily waiving the live/in-person credit requirements through December 31, 2021. 

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

Independence Day I RMAI Office Closed I July 5, 2021

2021 ACA International Convention | July 28-30

RMAI Executive Summit 2021 | August 2-4, 2021

Good News Stories
We hope you enjoy RMAI’s Thursday “Good News” posts highlighting the good deeds of RMAI members.  If you or your company are doing positive things in your community, let us know. We share those accomplishments on RMAI’s website and social media accounts. Please email your good news to Penny Cunha, RMAI Deputy Director, at pcunha@rmaintl.org. Thank you!

Thank you to our June 2020 – June 10, 2021 Legislative Fund Contributors!

Diamond $25,000
Cavalry Investments, LLC
Crown Asset Management, LLC
Financial Recovery Services, Inc.
Portfolio Recovery Associates, LLC
Resurgent Holdings, LLC

Titanium $15,000
Velocity Portfolio Group, Inc.

Platinum $10,000
C&E Acquisition Group, LLC/Diverse Funding Associates, LLC/DNF Associates
CKS Financial
Crown Asset Management, LLC
Encore Capital Group, Inc.
Unifund CCR LLC

Gold $7,500
First Financial Portfolio Service, LLC

Silver $5,000
Collins Asset Group LLC
NCB Management Services, Inc.
Oliphant United, LLC
Superlative RM
The Bureaus, Inc.
U.S. Equities Corp.

Bronze $2,500
Absolute Resolutions Corp.
Central Portfolio Control, Inc.
Investment Retrievers, Inc.
National Loan Exchange, Inc.
RAzOR Capital, LLC
SAM, Inc. – Solutions for Account Management
Security Credit Services, LLC
Spire Recovery Solutions, LLC
Synergetic Communication, inc.
Tobin & Marohn

Brass $1,000
Andreu, Palma, Lavin & Solis, PLLC
Balbec Capital, LP
Ballard Spahr LLP
Bayview Solutions, LLC
Butler & Associates, P.A.
Capio
Digital Recognition Network
Equifax, Inc.
Halsted Financial Services, LLC
Investinet, LLC
Jefferson Capital Systems, LLC
Jormandy, LLC
Kino Financial Co., LLC
Plaza Services, LLC
Pressler, Felt and Warshaw, LLP
Resurgence Capital, LLC
Stenger & Stenger P.C.
Stephen L. Bruce & Associates
The Cadle Company
The Law Offices of Ronald S. Canter, LLC
TrueAccord
United Holding Group
Verifacts, Inc.
Vertican Technologies, Inc

Other
Accelerated Data Systems
Acctorp International, Inc.
Action Collection Agencies, Inc.
Aldridge Pite Haan, LLP
Alliance Credit Services, Inc.
Alpha Recovery Corp.
Applied Innovation, Inc.
Arko Consulting LLC
ARM Compliance Business Solutions, LLC
ATKB Portfolio Management
Attunely Inc.
Ballard Spahr, LLP
Bloom & Associates, P.A.
Capital Collection Management, LLC
Cascade Capital, LLC
Central Research, Inc.
CMS Services
Collins Asset Group
Commercial Credit Group Inc.
Complete Credit Solutions
Comtronic Systems, LLC
Convergence Acquisitions, LLC
Converging Capital, LLC
Convoke, Inc.
Credit Control, LLC
Credit Management Corporation
CSS Impact!
D & A Services, LLC
D. Scott Carruthers, APLC
David Reid
DebtTrader
Delev & Associates, LLC
Delta Outsource Group, Inc.
Dynamic Recovery Solutions
Faloni Law Group, LLC
FLOCK Specialty Finance
FMS, Inc.
FocusOne, Inc.
Full Circle Financial Services, LLC
G. Reynolds Sims & Associates, P.C.
Gaskell & Giovannini, LLC
Genesis Recovery Services
Glass Mountain Capital, LLC
Harvest Strategy Group, Inc.
Hunt & Henriques
Indiana Receivables, Inc.
International Debt Buying Consultants, LLC
Invenio Financial, a Phillips & Cohen Associates Company
Jan Stieger
Keith D. Weiner & Associates Co., LPA
Kelly Knepper- Stephens
Kirschenbaum & Phillips, P.C.
Law Office of James R. Vaughan, P.C.
Law Offices of Daniel C. Consuegra, P.L.
Law Offices of Steven Cohen, LLC
Lippman Recupero
Lockhart, Morris & Montgomery, Inc.
Logicoll, LLC
London & London
LTD Financial Services
Malone Frost Martin PLLC
Maurice Wutscher LLP
Mercantile Adjustment Bureau, LLC
Metronome Financial LLC
Monarch Recovery Management, Inc.
MRS BPO, LLC
Mullooly, Jeffrey, Rooney & Flynn, LP
National Check Resolution, Inc.
National Enterprise Systems, Inc.
National Recovery Associates
National Recovery Solutions
NDS, LLC
Nelson & Kennard
Neustar, Inc.
Ontario Systems, LLC
Orion Capital Solutions, LLC
Palinode, LLC
PCI Group, Inc.
PerSolve, LLC
Pharus Funding, LLC
Phin Solutions, Inc.
Portnoy Schneck, L.L.C.
Poser Investments, Inc.
Premier Forty Financial, LLC
ProVest
Quantum3 Group, LLC
Resource Management Services, Inc
RevSpring
RIP Medical Debt
Robinson Hoover & Fudge, PLLC
SCORE Statistical Consulting
Simmonds & Narita LLP
Slovin & Associates
Solutions by Text
Sonnek & Goldblatt, Ltd.
Stone, Higgs & Drexler
Superlative RM
Troy Capital, LLC
Universal Fidelity LP
US Mortgage Resolution, LLC
USI Solutions, Inc.
VanDerHeyden Law Office PA
Vargo & Janson, P.C.
Venable LLP
Venandi Systems, LLC
Viking Client Services, Inc.
VoApps
Wipfli LLP