RMAI Update November 2021

Do you know someone who should be recognized for their work in the receivables management industry over the past year? Now is your chance to nominate them for one of RMAI’s prestigious awards: the Bud Reitzel Award and the Integrity Award.  Learn more and nominate today. Awards will be presented at the RMAI 2022 Annual Conference.

RMAI continues to closely monitor activities on Capital Hill with specific attention paid to the National Defense Authorization Act (NDAA) which is the vehicle used to fund the military. This major piece of legislation, which Congress must pass, is a prime vehicle for amendments to be slipped in which can impact the accounts receivables management industry.  There are rumors that the rate caps imposed on loans to military personnel could be extended to the general public, and therefore, several financial services industries are also watching this bill closely.  To date, we have not seen any FDCPA related amendments being added to this piece of legislation.

We are at T-15 days to the launch of the CFPB Debt Collection Rule.  It was nine years ago when the CFPB first started the process of FDCPA rulemaking with the publishing of the Advanced Notice of Proposed Rulemaking (ANPR).  It is hard to believe we are finally at the implementation date.  RMAI has a myriad of resources available to you to help make sure you are in compliance on November 30th.

• View our recorded online education, including our 2021 Annual Conference CFPB Rule & Keynote Bundle
• Access our “Getting Ready for Reg F Checklist”

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 about the industry and the negative impacts or unintended consequences bills would have on businesses and consumers. In 2021, RMAI continued with its impressive track record of success. The following are some recent developments at the state legislative level for the District of Columbia and New York that might be of interest:

District of Columbia B 348 – The Washington, D.C. City Council will hear public testimony on Monday, November 29, 2021, on the adoption of a permanent law based on the text contained in temporary bill # 348. 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 three phone calls to a consumer in seven days; (3) requiring debt collectors to have complete documentation related to the consumer debt being collected; (4) requiring debt collectors to provide extensive data and documents to the consumer within 15 days of a written request; (5) requiring lengthy consumer notices informing consumers of their rights; (6) requiring debt collectors who enter into a payment schedule or settlement to provide a written copy of the schedule or agreement; (7) adding specific requirements for a debt collector when initiating a cause of action against a consumer for consumer debt; and (8) 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. RMAI and an industry coalition were successful in: (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 an additional 23 amendments to the permanent statutory language. More to come!]

New York SB 153 [Chapter 593 of the Laws of 2021] – 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. [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. As a result, after 13 months of negotiations, the industry was successful in: (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 for credit cards 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.]

New York SB 5724-A – This bill would set post-judgment interest at 2% per annum and would apply this interest rate retroactively to judgments entered prior to its effective date. The bill would also require filing an amended execution. [This bill has passed both houses and is awaiting the Governor’s signature. RMAI and a broad-based coalition is seeking chapter amendments to this bill that would remove the retroactive nature of the law. Realistically, obtaining a veto is unlikely given the politics of New York State.]

11th Circuit Vacates Hunstein I; New Opinion Falls Short of Expectations

Hunstein v. Preferred Collection & Mgmt. Servs., Inc., No. 19-14434, 2021 U.S. App. LEXIS 32325 (11th Cir. Oct. 28, 2021)

The U.S. Court of Appeals for the Eleventh Circuit issued an opinion on October 28 (“Hunstein II”), vacating its earlier decision (“Hunstein I”) and holding for a second time that Hunstein has standing to maintain his case in federal court and that his complaint states a claim under the federal Fair Debt Collection Practices Ace, 15 U.S.C. § 1692c(b).

Regarding standing, the plaintiff in a federal lawsuit must allege (among other things) that he has suffered a concrete injury.  He can do this by alleging a tangible harm, a risk of real harm, or an intangible injury that is nonetheless treated by courts as concrete. Hunstein’s alleged statutory violation falls into this third category.

Two types of intangible harms can be sufficiently concrete to exist in federal court: (1) harms that bear a close resemblance to a harm historically recognized as actionable, such as that associated with a common-law tort claim; and (2) intangible (but nonetheless real) harms that were previously inadequate at law, but which Congress has elevated to the status of legally cognizable injuries.

In Hunstein I, the  panel explained that the harm associated with the disclosure to a mail vendor of information related to Hunstein’s debt and his son’s medical condition was sufficiently analogous to the common-law tort of public disclosure of private facts. Hunstein II takes a deeper look at how closely an intangible harm must resemble the harm associated with a common-law cause of action, and ultimately holds that those harms need only be similar in kind, not in degree.

A public disclosure of private facts occurs when one gives publicity to the private matter of another. Courts have traditionally held that a plaintiff can recover only when the private matter was publicized, which means it must have been made known to the public or to a large group of people. Hunstein’s allegation that Preferred disclosed his information to the employees of a mail vendor, a relatively small group, appears to fall well short of the publicity required for a public-disclosure-of-private-facts claim. However, the majority in Hunstein II said that the difference is a matter of degree not of kind, and thus held that Hunstein’s alleged harm bore a sufficiently close relationship to a harm traditionally recognized by American courts.

As you might recall, the Supreme Court in TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021), held that class members whose credit reports contained misleading information related to a terrorist list had standing only if their reports were published to third parties.  According to the Hunstein II majority, TransUnion does not foreclose Hunstein’s standing but rather confirms that the Eleventh Circuit struck the right balance by drawing a line between kind and degree.

However, the Eleventh Circuit had to address TransUnion’s footnote 6, addressed whether TransUnion “published” class members’ information to its own employees and to the vendors that printed notices and mailed them to the members of the class. The Supreme Court noted that “[m]any American courts did not traditionally recognize intra-company disclosures as actionable publications for purposes of the tort of defamation. . . [n]or have they necessarily recognized disclosures to printing vendors as actionable publications.”

The Supreme Court also suggested that a plaintiff who alleges damages based on internal publication to employees or publication to third-party vendors would have to show that the defendant “brought an idea to the perception of another” and that “the document was actually read and not merely processed.”

Hunstein II treats the TransUnion footnote as mere dicta, noting that the plaintiffs in TransUnion forfeited that argument by raising it for the first time on appeal.  The Hunstein II majority also observed that TransUnion went to trial, whereas it was reviewing a motion to dismiss.  As a result, the Eleventh Circuit had “no ‘evidence’ by which to evaluate whether anyone at [the mail vendor] ‘actually read and not merely processed’ Hunstein’s sensitive information.”  Instead, the court had to accept as true Hunstein’s allegation that the defendant debt collector did disclose his son’s medical information to the mail vendor’s employees. The court used this allegation, along with the defendant’s concession that its transmittal of information to the mail vendor was a “communication” under the FDCPA, to distinguish Hunstein’s standing from that of certain class members in TransUnion.

The Hunstein II majority also suggests that requiring Hunstein to show that mail-vendor employees actually read his information would “transform Spokeo’s ‘close relationship’ test into a ‘perfect match’ test . . . [and] would do the very thing that the Court [in TransUnion] said it was not doing, namely, ‘requir[ing] an exact duplicate’ of a common-law claim.”

Recall that in TransUnion the Supreme Court analogized the plaintiffs’ Fair Credit Reporting Act claim to the common-law tort of defamation, even though a statement generally must be false to be defamatory and the statements at issue in TransUnion were merely misleading. The credit reports at issue in that case did not say that the class members were terrorists, only that their names potentially matched names on a list of suspected terrorists. Thus, the publication of private information to a handful of people (or to a corporate entity) is not publicity to the degree usually required for a public-disclosure-of-private-facts claim, but the majority held that it sufficiently resembles the type of harm associated with that tort to confer standing (at least in this case).

As for the merits of Hunstein’s claim, the panel again held that he stated a claim under § 1692c(b), even while acknowledging once more that its decision “runs the risk of upsetting the status quo in the debt-collection industry” and that preventing collectors from using vendors “may not purchase much in the way of ‘real’ consumer privacy.”  Nevertheless, the Hunstein II majority believed the wording of the statute compelled its decision, and the remedy, therefore, is to seek relief from Congress.

While the Supreme Court’s decision in TransUnion did not resolve the mail-vendor-disclosure claim in the way some anticipated, it did convert one of the panel’s three judges. That judge’s dissent explains his revised conclusion that Hunstein lacked Article III standing and failed to state a claim. The dissent also highlighted several strong arguments that defendants can use to fight similar claims in other circuits.

Maryland High Court Holds Judgments Obtained by Unlicensed Collector are Not Void

Cain v. Midland Funding, LLC, 475 Md. 4, 256 A.3d 765 (2021)

The Maryland Court of Appeals recently held that judgments obtained by an unlicensed debt buyer were not void, and that the consumers’ claims for unjust enrichment and money damages under the Maryland Consumer Protection Act (MCPA) and the Maryland Consumer Debt Collection Act (MCDCA) were subject to Maryland’s general three-year statute of limitations.

The case arose out of two separate putative class action cases brought against a debt buyer by consumers.  In both cases, the consumers alleged that debt buyer obtained judgements against them during a time period when the debt buyer did not have a license under the Maryland Collection Agency Licensing Act.

The cases were resolved by motions at the trial court level, and both were appealed to the Maryland Court of Special Appeals, which held the judgments obtained when the debt buyer was not licensed were not void.  The court relied on the decision in LVNV Funding LLC v. Finch which held, in part, that collateral attacks on enrolled judgements are disallowed.

The Court of Special Appeals also held that because the judgments had been satisfied, the consumers were not entitled to injunctive relief as the debt buyer was no longer attempting to collect.  The court found the consumers’ claims for unjust enrichment and money damages were barred by the general three-year statute of limitations, Md. Code Ann., Cts. & Jud. Proc. § 5-101.

The consumers filed petitions for writ of certiorari which the Court of Appeals granted.

On the question of whether the judgments were void, the Maryland Court of Appeals agreed with the intermediate appellate court and its reliance on Finch.  As the consumers did not seek review of the decision regarding injunctive relief, the Court next focused its attention on determining whether the consumers’ claims were time barred.

In determining when accrual of a statute of limitations occurs, Maryland applies the discovery rule which provides that “a claim accrues when the plaintiff knew or should have known of the wrong.”  The Court upheld the lower court’s determination that the accrual of the actions began when the consumers made their first payments on their judgments. As such, the actious would be barred by the 3-year statute of limitations unless: “(1) an alternative limitations period applies; (2) it was extended under a continuing harm theory; or (3) it was tolled.”

The Court found the consumers’ argument that they were subject to Md. Code Ann., Cts. & Jud. Proc. § 5-102, which provides for a 12-year statute of limitations for “actions on a judgment,” unpersuasive. After ascertaining the purpose and intent of the General Assembly in enacting the statute, a review of case law and the other specialties actions listed in the statute, the Court determined that “actions on a judgment” referred to actions enforcing a judgment not any action that involves the entry of a judgment as consumers argued.

The consumers also argued that the continuing harm doctrine applied, because they made payments to the debt buyer over a period of time. The Court again rejected the consumers’ argument, as the wrongful conduct at issue was the unlicensed status of the debt buyer when it filed the collection actions and obtained judgments against the consumers, and the collection activities that the consumers sought to extend their accrual date for limitations purposes occurred after the debt buyer became licensed.

The consumer in the first class action also argued that the statute of limitations should have been tolled because he was a putative member of a class action prior to the filing of that action.  However, the Court declined to extend the American Pipe class action tolling doctrine to include successive class actions rather than just individual claims. The Court found tolling of successive class action suits to be inconsistent with the notions of judicial economy and efficiency that form the basis of the Maryland’s class certification process.

However, the Court did extend the doctrine to include cross-jurisdictional tolling, reasoning that once the trial court has decided that a putative class action cannot proceed as a class (including by dismissal, denial of class certification, or forum non conveniens), the putative class members should be permitted to file their individual claims without regard to whether the class action was pending in Maryland state court, federal court, or another jurisdiction.

After making these determinations, the Court found that the individual claims of the consumer in the first class action were timely filed as the statute of limitations was tolled via cross-jurisdictional tolling and that the claims of the consumer from the second class action were time barred as no applicable tolling applied.

Finally, the consumer from first class action argued that the intermediate appellate court did not have jurisdiction to review the trial court’s ruling because the trial court’s ruling and declaratory judgment did not constitute a final judgment. However, the Court of Appeals found that the trial court had rendered a final judgment in disposing of the debt buyer’s motion to dismiss and granting the consumers’ motion for summary judgment.

Thus, the Maryland Court of Appeals affirmed the decision of the Court of Special Appeals, except as to time barring of the consumers’ claims in the first action, as the Court found the statute of limitations was cross-jurisdictionally tolled as to those claims.

Support the Legislative Fund When You Renew Your Membership

Membership renewal invoices were emailed and mailed on October 1, and provide an easy opportunity to contribute to the RMAI Legislative Fund when you pay your renewal dues. RMAI membership ensures your voice is heard at both the state and federal level.  Your single RMAI membership gets you double the representation. Donate to the Legislative Fund at any time.

RMAI recently updated the Legislative Fund infographic which shows where donations have gone this year.  Every dollar goes to state and federal advocacy. 2021 has been another wild year for the receivables management industry. Thanks to our members, RMAI has been able to secure lobbyists to help fight unfavorable legislation in several states. Additionally, you can see which states are the most active as well as other RMAI state and federal advocacy efforts.

View the Infographic  |  Donate to the Legislative Fund

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.

WATCH WEBINARS
Register for RMAI’s next monthly webinar on November 17th, Reg F’s Impacts on Purchasing Online Installment Loans, sponsored by Wipfli. 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 October 20th, Current Trends in Bankruptcy Litigation, sponsored by Verisk Financial | LCI. All recorded monthly webinars are FREE to RMAI members. (Special series and select required courses for certification are offered at a discounted 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.

ANNUAL CONFERENCE EDUCATION
The 2022 Annual Conference will offer 14 hours of education for earning or renewing your certification or just staying current on the receivables management industry. Watch for your email and visit our website for details.

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 new and renewed Certified Receivable Businesses (CRB)!

CRCP – New
Andrew Hagerman – Unifund CCR, LLC
Jeffrey Koberg – HS Financial Group, LLC
Erin Larys – Portnoy Schneck, LLC
Lee Morris – Capio

CRCP – Renewals
Ryan Banda – Denali Capital, LLC
Brian Glass – Halsted Financial Services, LLC
Stacy Stein – Mountain Peak Law Group, P.C.
Bridget Myers – CDS Software
Thomas Balcerzak – AACANet, Inc.
Chris Russell – Plaza Services, LLC

CRB – Renewals
HS Financial Group, LLC
Oak Harbor Capital, LLC

CERTIFY YOUR BUSINESS TO GAIN EXPOSURE
RMAI offers two (2) types of business certification: Certified Receivables Business (CRB) which is for debt buying companies, collection agencies, and collection law firms; and Certified Receivables Vendors (CRB) which is for Affiliate Members and brokers.

CRB Resources
7 Steps to Earning Certified Receivables Business – includes pricing details
Governance Document (Appendix A)
CRB Application

• Provide proof of E&O Insurance (Standard A2)
• Register on the CFPB Complaint Portal (Standard A8)
• Update your company website(s) (Standard A14)

CRV Resources
7 Steps to Earning Certified Receivables Vendor – includes pricing details
Governance Document (Appendix B)
CRV Application

• Requires a Pre-Certification Audit prior to submitting application.
• Provide proof of E&O Insurance (Standard 104)
• Update your company website (Standard 106)

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@ramintl.org.

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

Thanksgiving Observed | November 25-26, 2021 – RMAI Office Closed

RMAI 2022 Annual Conference | February 7-10, 2022

RMAI 2022 Executive Summit | August 2-4, 2022

Thank you to our November 2020 – November 9, 2021 Legislative Fund Contributors!

Diamond $25,000

Cavalry Investments, LLC

Crown Asset Management, LLC

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

Midland Credit Management

Nationalk Credit Adjusters

Unifund CCR LLC

Gold $7,500

Everchain

Silver $5,000

Collins Asset Group LLC

NCB Management Services, Inc.

Oliphant United, LLC

Pharus Funding, LLC

Superlative RM

U.S. Equities Corp.

Bronze $2,500

Absolute Resolutions Corp.

Investment Retrievers, Inc.

National Loan Exchange, Inc.

RAzOR Capital, LLC

SAM, Inc. – Solutions for Account Management

Spire Recovery Solutions, LLC

Synergetic Communication, inc.

Brass $1,000

Andreu, Palma, Lavin & Solis, PLLC

Bayview Solutions, LLC

Equifax, Inc.

FLOCK Specialty Finance

Halsted Financial Services, LLC

Invenio Financial, a Phillips & Cohen Associates Company

Jormandy, LLC

Kino Financial Co., LLC

Resurgence Capital, LLC

Stenger & Stenger P.C.

The Cadle Company

TrueAccord

United Holding Group

VeriFacts, Inc.

Other

Accelerated Data Systems

Acctorp International, Inc.

Action Collection Agencies, Inc.

Aldridge Pite Haan, LLP

Alpha Recovery Corp.

Arko Consulting LLC

Attunely Inc.

Ballard Spahr, LLP

Beam Software

Business and Professional Collection Service, Inc.

Butler & Associates, P.A.

Capio

Capital Collection Management, LLC

Cascade Capital, LLC

CMS Services

Collins Asset Group

Commercial Credit Group Inc.

Complete Credit Solutions

Comtronic Systems, LLC

Consuegra & Duffy, PLLC

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

Delev & Associates, LLC

Delta Outsource Group, Inc.

Dynamic Recovery Solutions

Faloni Law Group, LLC

Financial Recovery Services, Inc.

First Solutionis 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.

Hunt & Henriques

Indiana Receivables, Inc.

International Debt Buying Consultants, LLC

Keith D. Weiner & Associates Co., LPA

Kelly Knepper- Stephens

Kirschenbaum & Phillips, P.C.

Klima, Peters, & Daly, P.A.

Law Offices of Steven Cohen, LLC

Lippman Recupero

Lockhart, Morris & Montgomery, Inc.

London & London

Malone Frost Martin PLLC

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.

NRA Group, LLC

Ontario Systems, LLC

Orion Capital Solutions, LLC

Palinode, LLC

PCI Group, Inc.

PerSolve, LLC

Phin Solutions, Inc.

Portnoy Schneck, L.L.C.

Poser Investments, Inc.

Premier Forty Financial, LLC

Pressler, Felt and Warshaw, LLP

Provana

ProVest

Quantum3 Group, LLC

Ras LaVrar

Rausch, Sturm, LP

Resource Management Services, Inc

RevSpring

RIP Medical Debt

Security Credit Services, LLC

Simmonds & Narita LLP

Slovin & Associates

Solutions by Text

Stone, Higgs & Drexler

Superlative RM

Troy Capital, LLC

Universal Fidelity LP

US Mortgage Resolution, LLC

USI Solutions, Inc.

VanDerHeyden Law Office PA

Velo Law Office

Venable LLP

Venandi Systems, LLC

Verifacts, Inc.

Viking Client Services, Inc.

VoApps