RMAI Update May 2022

Congressional activity continues to revolve around getting inflation under control, the war in Ukraine, and now the Supreme Court leak regarding a potential Roe v Wade decision.  All of these big issues are being considered under the overarching umbrella of the upcoming midterm elections.  We are seeing very little movement of individual pieces of legislation, although we remain vigilant to ensure industry related proposals are not amended into larger pieces of legislation.  The focus of the administration continues to drive many proposals as they focus on the environmental, social, and governance (ESG) impact of a myriad of topics, including financial services.

With Congress’s attention focused elsewhere, the regulators are stepping up their activities.  The FTC has increased their activities in the privacy and antitrust arenas.  Closer to home, the CFPB continues with a flurry of activity in all forms including enforcement actions, proposals, and simply warnings that they are looking into various financial services and products.  We appear to be returning to a “regulation by enforcement” environment.  Nonetheless, RMAI continues to be engaged with the CFPB with requests for meetings with Director Chopra, CFPB staff participating in the Executive Summit Regulatory panel, and other meetings engaging CFPB staff.

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. RMAI is currently tracking 218 bills in states that are still in session (down from 352). Here are some recent developments at the state level that might be of interest:

California SB 975 – This bill would prohibit a debt collector from collecting or attempting to collect a consumer debt if the consumer provides documentation to the debt collector that the debt, or any portion of the debt, is the result of economic abuse. The bill defines economic abuse to be when a person causes another person “to have impaired financial stability by maintaining control over the individual’s financial resources . . .” Sufficient documentation to determine the occurrence of economic abuse would include a copy of a protective order; a police report indicating the individual was a victim of domestic violence or elder abuse; a  Federal Trade Commission identity theft report; or documentation from a licensed medical professional, domestic violence counselor, a sexual assault counselor, licensed health care provider, attorney, social worker, or counselor stating that the debt was incurred as a result of economic abuse. [RMAI opposes this bill, as drafted, given the unqualified background of some of the individuals who can determine the existence of economic abuse. There are similar bills that were introduced in Florida and Illinois that RMAI supports given appropriate protections contained in those bills.]

California SB 1200 – This bill would reduce the post-judgment interest rate from 10% to the federal prime rate not to exceed 5% if the judgment is on a claim related to personal debt or personal credit. The bill would also prohibit the renewal of a 10-year judgment for another 10 years, except in instances where a lien was created. [RMAI is working with our California lobbyist and an industry coalition to fight this bill.]

California SB 1477 – This bill would increase the disposable earnings that are exempt from wage garnishment by increasing the minimum wage multiplier from 40x to 80x. This would effectively exempt incomes under $70,000 from wage garnishment. This bill would also set the maximum amount of disposable earnings of a judgment debtor that is subject to levy at 10% of the amount by which the individual’s disposable earnings for a given week exceed 80 times the state minimum hourly wage. [RMAI is working with our California lobbyist and an industry coalition to fight this bill. Higher wage multipliers are becoming a priority issue for consumer advocates.]

Connecticut SB 6 [Public Act No. 22-15] – This bill was enacted into law on May 10^th. This law provides comprehensive consumer data privacy protections to the residents of Connecticut. See related RMAI Member Alert.

Connecticut SB 268 – This is an omnibus bill making specific reforms to the Banking Code. Impacting debt collectors, Section 9 of the bill (starts on page 27) increases the bond for a collection agency from $25,000 to $100,000 for the main office and $50,000 for each branch office. [This bill has passed both houses and it is anticipated that Governor Lamont will sign it into law.]

District of Columbia B 357 – The bill would make permanent a number of provisions related to D.C.’s debt collection laws, including: (1) expanding the prohibitions on deceptive behavior; (2) prohibiting debt collectors from making more than four phone calls to a consumer in seven days; (3) requiring consumers to opt-in to e-communications and limiting communications to five per week; (4) requiring debt collectors to have complete documentation related to the consumer debt being collected; (5) requiring debt collectors to provide extensive data and documents to the consumer within 15 days of a written request; (6) requiring lengthy consumer notices informing consumers of their rights; (7) requiring debt collectors who enter into a payment schedule or settlement to provide a written copy of the schedule or agreement; (8) adding specific requirements for a debt collector when initiating a cause of action against a consumer for consumer debt; and (9) increasing damages that can be awarded to a consumer for violation of the act. [RMAI retained a D.C. lobbyist to advocate on behalf of the industry. The DC City Council heard public testimony from RMAI and other industry participants on November 29, 2021, on the adoption of a permanent law based on the text contained in temporary bill # 348. RMAI and an industry coalition were successful in amending the emergency and temporary bills by: (a) adding exemptions to the call cap limitation, (b) eliminating pre-charge-off itemization of credit card debt; (c) eliminating the requirement for 24 months of statements; (d) eliminating unsolicited mailing requirements foisted upon debt collectors involving sensitive consumer data; (e) eliminating a requirement that the “original account number” be in the bill of sale; (f) eliminating mandatory punitive damages; and (g) eliminating a “per violation” penalty. More work needs to be done on the “permanent” bill. RMAI and a coalition of associations, debt collectors, and creditors are seeking additional amendments to the permanent statutory language. More to come!]

Massachusetts SB 2858 – This bill among other things: (1) increases the garnishment exemption from 50x state minimum wage to 65x state minimum wage; (2) once the consumer exceeds the exemption threshold, the bill limits garnishment to 10% of the income above the threshold; (3) reduces the statute of limitations in an action for the collection of a consumer debt from six to four years; (4) prohibits the revival of a debt that is beyond the statute of limitations through the making of a payment; and (5) reduces 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 September 1, 2023. [RMAI has retained a lobbyist to oppose the bill in its current form. RMAI participated in a stakeholder roundtable requested by the committee chair in January 2020 and April 2022. Working with a receivables industry coalition, RMAI has exchanged several redlines with proponents of the bill. While we have made significant progress, such as the removal of debt expungement from the bill, more work is needed on the wage garnishment provisions.]

New York AB 7363 – This bill would prohibit a hospital or health care professional from pursuing liens against a patient’s primary residence and the use of wage garnishment due to money judgments arising from actions brought by them. debt buyers. [The prohibition applies only to hospitals and health care professionals, which leaves open the question whether it could apply to businesses that purchase the accounts from said entities. This bill has passed both houses and it is anticipated that Governor Hochul will sign it into law.]

New York Retroactive Judgment Interest Law Blocked by Federal Judge
Greater Chautauqua Fed. Credit Union v. Marks, No. 1:22-cv-2753 (MKV), 2022 U.S. Dist. LEXIS 77620 (S.D.N.Y. Apr. 28, 2022)

On Dec. 31, 2021, New York legislation was signed into law lowering judgment interest on “consumer debt” from nine to two percent. The law takes effect on April 30.

While this poses no concern for covered judgments entered after April 29, the law also applies to unsatisfied judgments retroactively “from the date of the entry of judgment on any part of a judgment entered before [April 30, 2022].”  Accrued but unpaid interest at nine percent will have to be recalculated at the new rate of two percent, and some interpretations suggest that even paid interest on unsatisfied judgments is subject to reduction.

In response, three New York credit unions filed an action in federal court alleging the law is an unconstitutional taking and requested a preliminary injunction to prevent its enforcement.

On April 28, a New York federal judge temporarily enjoined three New York sheriffs from refusing to enforce judgment executions which seek to collect judgment interest “calculated with the interest rate in effect at the time the judgment was obtained.”

There are 62 counties with 62 sheriffs in New York. This order enjoins only three. The enjoined sheriffs are in three contiguous counties in western New York along Lake Erie and includes Buffalo, New York.  With a little over 19 million New Yorkers, the affected counties are home to just over 1.3 million people. The court, though, required that its order be served on all New York sheriffs.

At this stage of the litigation, the court was asked only to determine whether the plaintiffs, the three credit unions, are likely to prevail on their claims. The court found that the retroactive judgment interest reduction is likely an unconstitutional “regulatory taking.”

First, it determined that interest on unsatisfied judgments is the property of the judgment creditor and so it is “constitutionally protected.”  Second, although the law is not akin to a condemnation or appropriation of property, its effect is “so onerous that its effect is tantamount to a direct appropriation. . .”

The case will continue to be litigated and the injunction will continue until the court (or an appellate court) decides otherwise.

There are several ways to interpret the retroactive judgment interest reduction under this recently adopted law and judgment creditors are struggling to determine its scope. While covered judgments paid and satisfied prior to April 30 are not subject to adjustment, unpaid judgments present a more complex problem.

The text of the law is subject to at least two conflicting interpretations on how paid interest on unsatisfied judgments must be treated. While the law does not require a creditor to return interest paid at the nine percent rate, new sections (a)(ii) and (c) of CPLR § 5004 are confusing and unclear as to how such paid interest on unsatisfied judgments is to be treated beginning April 30.

Seventh Circuit Vacates Large Verdict for Lack of Article III Standing
Pierre v. Midland Credit Mgmt., Nos. 19-2993, 19-3109, 2022 U.S. App. LEXIS 8770 (7th Cir. Apr. 1, 2022)

A consumer received a collection letter on a time-barre debt.  The debt collector informed the consumer “that because of the age of the debt, [the debt collector] would neither sue her for it nor report it to a credit agency and that her credit score would be unaffected by either payment or nonpayment.”

The consumer took no action other than to dispute the debt and file a class action lawsuit against the debt collector claiming that the letter confused her as to whether she could be sued and “falsely represented the character and legal status of the debt, 15 U.S.C. § 1692e(2); was a deceptive means to attempt to collect the debt, id. § 1692e(10); and was an unfair or unconscionable means to attempt to collect the debt, id. § 1692f.”

The trial court entered summary judgment in favor the consumer, and a jury awarded over $350,000.  The court twice rejected the debt collector’s arguments that the consumer lacked  Article III standing.

On appeal, the Seventh Circuit explained that the consumer “needed to establish standing with evidence offered at summary judgment, and her standing must remain adequately supported in the face of any adverse evidence introduced at trial.”

Rejecting the consumer’s argument that the confusing could have resulted in a payment that might have restarted the statute of limitations, the Court noted the consumer “didn’t make a payment, promise to do so, or otherwise act to her detriment in response to anything in or omitted from the letter. That aligns Pierre with the plaintiffs in [Casillas v. Madison Ave. Assocs., 926 F.3d 329 (7th Cir. 2019)] and [Larkin v. Fin. Sys. of Green Bay, 982 F.3d 1060 (7th Cir. 2020)], who received allegedly defective letters but who did not experience any harm—or even a risk of real harm, which we now know isn’t enough—caused by the defects.”

As for the consumer’s alleged confusion and emotional distress, the Court, citing its recent decisions, stated “[c]onfusion, we have held, is not a concrete injury in the FDCPA context,” and “worry, like confusion, is insufficient to confer standing in this context.”

Thus, the Court vacated the trial court’s judgment and instructed it on remand to dismiss the case for lack of subject matter jurisdiction.

Eleventh Circuit Holds Res Judicata Effect of Prior CFPB Lawsuit Dictated by Terms of Consent Judgment
Consumer Fin. Prot. Bureau v. Ocwen Fin. Corp., 29 Fla. L. Weekly Fed. C 994 (U.S. 11th Cir. 2022)

In 2013, CFPB filed a lawsuit against a mortgage loan servicer  alleging that the servicer’s practices violated federal law. The lawsuit resulted in a consent judgment that released the servicer from liability for the conduct alleged in the lawsuit and established a three-year period during which the servicer had to comply with specific servicing standards enforced through a monitoring and compliance regime.

The terms of the consent judgment expired in 2017, and shortly thereafter the CFBP filed another lawsuit against the servicer alleging violations that occurred between January 2014 and February 2017.  The trial court granted summary judgment in favor of the servicer “on res judicata grounds, reasoning that the 2013 action barred the CFPB’s follow-on suit.”

On appeal, the CFPB argued that the consent judgment, and not the complaint, should control the effect of res judicata, and that “the underlying settlement agreement shows that the parties didn’t intend to preclude a challenge to any conduct occurring from 2014 onwards.”

On the first point, the U.S. Court of Appeals for the Eleventh Circuit agreed with the CFPB.  Citing several of its previous decisions, the Court explained that “when two parties settle a lawsuit, that suit’s res judicata effect is ‘controlled by the Settlement Agreement into which the parties entered,’ not by ‘the original complaint.’”

However, on the second point, the Court disagreed with the CFPB as to the intent demonstrated by the terms of the settlement agreement.

The Court noted that “there are three ways in which the parties’ ‘intent’ might be understood: Either (1) the CFPB can sue [the servicer] for all alleged legal violations occurring between January 2014 and February 26, 2017; (2) the CFPB can’t sue [the servicer] for any alleged violations occurring during that period; or (3) the CFPB can sue [the servicer] only for legal violations not covered by the settlement’s terms.”

Ultimately, the Court determined that the third interpretation to be the best.

Rejecting the first interpretation urged by the CFPB, the Court observed that “as a practical matter, the settlement agreement would be impossible to enforce if the CFPB could unilaterally decide when to invoke it and when to ignore it. [The servicer] couldn’t possibly have intended to get so little security from the parties’ bargain.”

Rejecting the second interpretation urged by the servicer, the Court stated that “[r]eading the agreement to preclude the CFPB from suing [the servicer] for any alleged misconduct during the consent judgment’s term would require us to conclude that the CFPB silently relinquished its authority to enforce the law. It can’t be that the CFPB agreed to let [the servicer] violate the law so long as it didn’t violate a servicing standard.”

Thus, the Court settled on the third interpretation: “On the one hand, for conduct that occurred between January 2014 and February 26, 2017 and is covered by the consent judgment’s servicing-standards-and-monitoring regime, the parties established a particular enforcement mechanism that the CFPB must follow. On the other hand, the CFPB may sue Ocwen to enforce legal violations that occurred during that period and are not covered by that regime.”

Accordingly, the Court vacated the trial court’s ruling and remanded the matter with instructions to determine which counts in the CFPB’s current complaint should be barred by the terms of the consent judgment.

Executive Summit Silent Auction Fundraiser for the Legislative Fund – NEW FORMAT
The Executive Summit 2022 Silent Auction opens soon! Watch for the announcement and then browse the online auction catalog for the available items. “Buy it Now” if you find something you can’t live without! Prior to when the Executive Summit begins on August 2nd, the “Buy it Now” feature will end. Then any silent auction items not purchased using the “Buy it Now” feature will be solely available to Executive Summit attendees for on-site bidding using the bid sheets.

Browse our Amazon Wishlist for ideas of items to donate. Companies donating items to the silent auction fundraiser get brand recognition on the donor list as well as the auction catalog. Stay tuned for additional information on the silent auction and how you can participate.

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. If you’d like to contribute to the Legislative Fund, you can Donate Here. We will add your company name to our list of contributors on our website.  Click Here to see a list of current contributors on the right side bar.

Chief Compliance Officer Webinar Series (CCO Series)
Register for RMAI’s six-part webinar series which begins May 26th and ends on November 1st and focuses on recent updates and changes in the compliance world since the implementation of Regulation F. Topics include Credit Reporting, Letters, Communication Restrictions, Vendor Oversight, Text Message/SMS, and Payments. While this series is designed for chief compliance officers, the content is beneficial for anyone working in or wanting to learn more about these topic areas.

Registration Options

Entire CCO Webinar Series: REGISTER
Regular: $299 for members

Individual Webinars: $64 per webinar for members

Credit Reporting – May 26th REGISTER
June Coleman – Messer Strickler Burnette
Catherine Calko – Spring Oaks Capital
Addison Crawford – Midland Credit Management

Letters – June 23rd REGISTER
John Bedard – Bedard Law Group
Amy Brown – Gurstel Law Firm
Brian Glass – Halsted Financial Services

Communication Restrictions – July 26th REGISTER
Crystal Duplay – Kodak Law
Stefanie Jackman – Troutman Pepper

Vendor Oversight – September TBD REGISTER
Sara Woggerman – ARM Compliance Business Solutions
TBD

Text Message/SMS – October 13th REGISTER
Tim Caraveo – Synergetic Communication
Mike Frost – Malone Frost Martin

Payments – November 1st REGISTER
Rozanne Andersen – Finvi
Michael Kane – Unifund

Upcoming Monthly Webinars – Free for Members
Best Practices and Considerations for an Effective Estate Recovery Strategy – May 18th at 9:00am PT/12:00pm ET

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), new and renewed Certified Receivable Businesses (CRB) and renewed Certified Receivables Vendor (CRV) for March & April!

CRCP – New
Nicole Cummins – InDebted
Karan Grover – Provana
Rebekah Luebcke – Crown Asset Management
Sergio Martinez – Unifin, Inc.
Daniel McCusker – First Financial Asset Management, Inc.
Mike Melrose – Oliphant United/Accelerated Inventory Management
Angela Reed-Becker – D & A Services, LLC
Michael Sheehan – Revenue Assistance Corporation DBA Revenue Group
Demetrios Tsarouhis – Tsarouhis Law Group, LLC

CRCP – Renewals
Joe Adams – Hampton Pryor Group
Neil Bloom – Bloom & Associates, P.A.
Brian Bowers – Financial Recovery Services, Inc.
Jennifer Cristao – 640 Financial Group, LLC
Jenny DeHoyos – Capio
Rebecca Garland – VeriFacts, Inc.
Isaac Goldman – Vertican Technologies, Inc.
Nicole Green – Cascade Capital LLC
Adam Katz – NMRC
Jill Katz – NMRC
Bill Kolz – Kolz & Associates/Zenarate
Todd Lansky – Resurgence Capital, LLC
David Lippman – Lippman Recupero
Frank Moore – SCJ Commercial Financial Services
Christi Pavia – McNall & Associates, P.C
Andrew Roskam – Acctcorp International
William Shaulis – The Cadle Company
Jan Stieger – RMAI

CRB – New
CBE Companies

CRB – Renewals
Plaza Services, LLC
Velo Law Office

CRV – Renewals
EverChain

Chief Compliance Officers for Certified Businesses Must Earn 12 In-Person Credits
As of March 2022, the Receivables Management Certification Program adopted version 10.0. The updated education requirements for Chief Compliance Officers of certified businesses require a minimum of 12 in-person credits (previously eight (8) in-person credits were required).

Additional Employees Earning Individual Certification Can Take All Credits Online
The updated education requirements also allow additional employees who are not the Chief Compliance Officer for business certification and are earning the Certified Receivables Compliance Professional (CRCP) designation to take all 24 education credits online.

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

For questions about certification, contact Shannon Parod direct at 916-482-2590 or email cert@rmaintl.org.

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

RMAI 2022 Executive Summit | August 2-4, 2022

RMAI 2022 Washington D.C. Regional Event | September 26-27, 2022

Please note, the RMAI office will be closed May 30, 2022 for the Memorial Day Holiday.

Thank you to our May 2021 – May 11  2022 Legislative Fund Contributors!

Diamond $25,000
Cavalry Investments, LLC

Crown Asset Management, LLC

Financial Recovery Services, Inc.

Midland Credit Management

Portfolio Recovery Associates, LLC

Resurgent Holdings, LLC

Titanium $15,000

Velocity Portfolio Group, Inc.

Platinum $10,000

National Credit Adjusters

Unifund CCR LLC

Gold $7,500

EverChain

Pressler, Felt and Warshaw, LLP

Silver $5,000

Digital Recognition Network

NCB Management Services, Inc.

Pharus Funding, LLC

Bronze $2,500

Absolute Resolutions Corp.

Investment Retrievers, Inc.

RAzOR Capital, LLC

Resurgence Capital, LLC

SAM, Inc. – Solutions for Account Management

Security Credit Services, LLC

Spire Recovery Solutions, LLC

Brass $1,000

Andreu, Palma, Lavin & Solis, PLLC

Complete Credit Solutions, Inc.

FLOCK Specialty Finance

Halsted Financial Services, LLC

Hunt & Henriques

Kino Financial Co., LLC

Levy & Associates, LLC

Simmonds & Narita, LLP
T&I Enterprises, LLC

The Cadle Company

Tobin & Marohn

VeriFacts, Inc.

Other

Accelerated Data Systems

Acctorp International, Inc.

Action Collection Agencies, Inc.

Advancial Federal Credit Union

Aldridge Pite Haan, LLP

Alliance Data

Alliant Capital Management LLC

Arko Consulting LLC

ARM Compliance Business Solutions

Atlas Acquisitions

Attunely Inc.

Autovest, LLC

Ballard Spahr, LLP

Beam Software

Blitt & Gaines, P.C.

Business and Professional Collection Service, Inc.

Butler & Associates, P.A.

C&E Acquisition Group, LLC/ Diverse Funding Associates

Capio

Capital Collection Management, LLC

Capital Link Management, LLC

Cascade Capital, LLC

Client Services Incorporated

CMS Services

Commercial Credit Group Inc.

Complete Credit Solutions, Inc.

Comtronic Systems, LLC

Conficio Capital, Inc.

Converging Capital, LLC

Convoke, Inc.

Cornerstone Support, Inc.

Couch Lambert

Credit Control, LLC

Credit Corp Solutions, Inc.

Credit Management Corporation

CSS Impact!

Debt Recovery Solutions, LLC

Dyck-O’Neal, Inc.

Dynamic Recovery Solutions

Equabli

Experian

Finvi

First Financial Portfolio Services, LLC (FFAM360)

First American Acceptance Co., LLC

First Solutions Debt Management, LLC

FMS, Inc.

FocusOne, Inc.

G. Reynolds Sims & Associates, P.C.

Gaskell & Giovannini, LLC

Genesis Recovery Services

Guglielmo & Associates, PLLC

Harvest Strategy Group, Inc.

Indiana Receivables, Inc.

Interim Capital Group, Inc.

Invenio Financial, a Phillips & Cohen Associates Company

Jefferson Capital Systems, LLC

Jormandy

Keith D. Weiner & Associates Co., LPA

Kelly Knepper -Stephens

Kirschenbaum & Phillips, P.C.

Klima, Peters, & Daly, P.A.

Law Offices of Steven Cohen, LLC

Lockhart, Morris & Montgomery, Inc.

Malone Frost Martin PLLC

Maurice Wutscher LLP

Metronome Financial LLC

Monarch Recovery Management, Inc.

National Debt Holdings, LLC

National Loan Exchange

National Recovery Associates, Inc.

National Recovery Solutions, LLC

Nationwide Recovery Systems

Nelson & Kennard

NRA Group, LLC

PCI Group Inc.

Phin Solutions, LLC

Portnoy Schneck, L.L.C.

Poser Investments, Inc.

Premier Forty Financial, LLC

Premium Asset Recovery Corp (PARC)

Pro Forma Inc

Provana, LLC

ProVest LLC

Quall Cardot, LLP

Quantum3 Group

RAS LaVrar LLC

Rausch, Sturm, LP

Repay

Resource Management Services, Inc.

RevSpring

RIP Medical Debt

Scott & Associates, PC

Sentry Credit, Inc.

Slovin & Associates

SMS Financial, LLC

State Collection Services, Inc.

Stone, Higgs & Drexler

Superlative RM

Suttell & Hammer

Synchrony Financial

Synergetic Communication, inc.

Tag Process Service, Inc.

Techno Brain BPO ITES Limited

TransUnion

Troy Capital, LLC

USASF Servicing

Vargo & Janson, P.C.

Velo Law Office

Venable LLP

VoApps

Zenarate, Inc