RMA Update May 2018

/RMA Update May 2018
Contribute Now
Contribute Now
Contribute Now

The CFPB continues to issue Requests for Information on a wide range of topics effecting the industry.  To date, RMA has responded to two RFI’s.  The first was on Civil Investigative Demands (CIDs) and the second on Enforcement Activities.  In the next few months, there are eight additional CFPB RFI’s that RMA will develop responses for.

RMA Leadership had a very successful trip to DC meeting with the FTC, OCC, and CFPB as well as several key meetings on Capitol Hill and a meeting with the Online Lending Association (OLA).

A bankruptcy working group has been formed to proactively address pending bankruptcy rules as well as state level issues that arise.

RMA is currently tracking more than 190 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:

Connecticut HB 5490 – This is an omnibus banking law bill introduced by the Joint Committee on Banking. The provisions impacting the collection industry can be found in sections 78 and 79 of the bill. The bill would: (1) authorize the Banking Department to use the Nationwide Multistate Licensing System (NMLS) to license consumer collection agencies (a very common development as more states are joining NMLS to streamline their licensing requirements); (2) clean up how debt buying companies are referenced in parts of the Consumer Collection Agency Act (technical non-substantive amendments); and (3) exempt debt buying companies from the requirement of maintaining a minimum tangible net worth of fifty thousand dollars. [This bill has passed both Houses of the Legislature and is awaiting action by the Governor.]

Connecticut HB 5491 – This bill would impose an automatic $1,000 exemption on garnishments of consumer bank accounts. [RMA opposes this bill as the average bank garnishment is below the $1,000 threshold, thereby effectively ending this practice in CT. The legislative session has ended without passage of this bill.]

Illinois HB 5480, HB 5483, HB 5484, HB 5485, HB 5486, and HB 5487 – This is a package of consumer protection bills that would significantly impact the collection of defaulted accounts in Illinois. [RMA opposes these bills and is working with a coalition of industry participants to kill or amend them. RMA understands that portions of these bills are likely to be combined into a single legislative proposal that will become the focus of passage by consumer advocates.]

Massachusetts HB 1982 – This bill would require passive debt buyers to be licensed as debt collectors in Massachusetts. Currently, third party collection agencies and active debt buyers are regulated and licensed by the Massachusetts Division of Banks while passive debt buyers are regulated by the Attorney General’s Office and not required to be licensed. This bill would also exempt debt buying companies from bonding requirements and allow affiliated companies to be licensed under a single license and subject to a single examination [RMA has been advocating for uniformity and consistency in state licensing laws. Maintaining the Massachusetts bifurcated regulatory scheme does not make sense and adds to industry and consumer confusion. RMA has retained a Massachusetts lobbyist to assist us in our efforts. RMA testified in support of this bill at a legislative hearing in Boston on September 26th. There was no opposition to the bill. The bill was unanimously reported out of committee with the recommendation to pass on 2/7/18.]

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 has retained a lobbyist to oppose the bill in its current form. RMA testified in opposition of this bill at a legislative hearing in Boston on September 25th. The bill was reported out of committee to the Ways & Means Committee on 12/18/17.]

Rhode Island HB 7929 – Creates the “Expired Debt Act” which would among other things: (1) prohibit consumer contact until the collector “possesses verifiable information documenting” chain of title, the amount of the debt, and the connection of the debtor to the debt; (2) require consumer notices on out of statute debt in every communication when the debt is beyond the statute of limitations; (3) prohibits default judgments on out of stat debt; and (4) provides damages for mental distress and emotional anguish. [RMA opposes this bill in its current form. RMA testified in opposition to the bill during committee testimony on April 11th—the bill was held in committee for further study.]

Vermont HB 482 – This bill would among other things: (1) reinforce the six year statute of limitations on credit card debt and thereby eliminate any possible use of a borrowing statute or choice of law in Vermont; (2) prohibit filing litigation on a credit card debt that is beyond the statute of limitations; (3) prohibit a payment on a credit card debt that is made after the statute of limitations has expired from reviving the statute; and (4) require a consumer notice when collecting on debt that is beyond the statute of limitations. [RMA retained a lobbyist and testified in opposition to a prior harmful version of the bill. Through active negotiations, RMA was able to eliminate the following provisions from the bill; (i) a prohibition on debt collectors contacting consumers after the statute of limitations expired; (ii) a reduction of the statute of limitations from six to three years on credit card debts; and (iii) the establishment of a new civil penalty. The legislative session has ended without passage of this bill.]

If you are interested in obtaining a copy of the RMA state tracking list, please contact David Reid at dreid@rmassociation.org.

9th Cir. Rejects FDCPA Claim That Collector Did Not ‘Meaningfully Participate’ in Collection
Echlin v. Peacehealth, Ninth Circuit Court of Appeals, No. 1535324 (April 17, 2018)

The U.S. Court of Appeals for the Ninth Circuit recently rejected a so-called “flat-rating” claim, holding that a company that sent letters demanding that hospital patients pay their overdue medical bills did not create a false or misleading impression that the company was actually participating in collecting the debts in violation of the federal Fair Debt Collection Practices Act (FDCPA), because the company meaningfully participated in the hospital’s efforts to collect debts.

A copy of the opinion in Echlin v. PeaceHealth is available HERE.

The collection agency sent three demand letters to the plaintiff.  In response to the third letter, the plaintiff disputed the debt and the collection agency marked the account as disputed and returned the account to the hospital.

In March 2014, the plaintiff filed a putative class action against the collection agency and hospital alleging violations of the FDCPA, including but not limited to 15 U.S.C. §§ 1692e and 1692j. The plaintiff alleged that the letters she received “created a false or misleading belief that [the collection agency] was meaningfully involved in the collection of a debt prior to the debt actually being sent to collection” — a practice commonly known as flat-rating.

The Ninth Circuit noted that meaningful participation in the debt collection process may take a variety of forms.  It considered the amount of control the entity exercised over the collection letters it sends, the amount of contact the entity had with the debtors, whether the entity invited and responded to debtor inquiries, whether the entity received or negotiated payments, whether the entity received or retained full debtor files, and whether the entity was involved in further collection activities if the debt remained unpaid.

Above all, the Ninth Circuit stated that the key is whether the entity genuinely contributed to an effort to collect another’s debt.

The Ninth Circuit found that while the collection agency did not process payments, it participated in the attempts to collect debts owed to the hospital because: (1) it independently screened accounts for barriers to collection, (2) it drafted and mailed the collection letters without input from the hospital, (3) its letters invited the debtor to contact the collection agency and its personnel handled such inquiries, (4) it in fact received approximately 500 calls a week from debtors and received hundreds of pieces of mail from debtors, (5) it provided debtors with information about the debts and how to repay them, (6) it maintained a website where debtors could access information about their debts and submit documents, and (7) it sometimes received and forwarded to the hospital payments it received from debtors.

Therefore, the Ninth Circuit determined that the collection agency’s efforts were enough to have participated meaningfully in the attempts to collect debts like the plaintiff’s.

 8th Cir. Applies ‘Materiality’ Requirement to FDCPA Action, Joining Other Circuits
Hill v. Accounts Receivable Services, LLC, Eighth Circuit Court of Appeals, No. 164356 (April 19, 2018)

The U.S. Court of Appeals for the Eighth Circuit recently joined with the Third, Fourth, Sixth, Seventh, and Ninth Circuits in applying a materiality standard to section 1692e of the federal Fair Debt Collection Practices Act (FDCPA).

In doing so, the Eighth Circuit affirmed the trial court’s order granting judgment in favor of a debt collector and against a borrower. A copy of the opinion in Hill v. Accounts Receivable Services, LLC is available HERE.

The borrower alleged that the debt collector violated 15 U.S.C. § 1692e by using “false, deceptive, or misleading representation or means in connection with the collection of any debt.” Further, the borrower alleged that the debt collector threatened “to take any action that cannot legally be taken or that is not intended to be taken” in violation of 15 U.S.C. § 1692e(5). Finally, the borrower claimed that the debt collector violated 15 U.S.C. § 1692f, by using “unfair or unconscionable means to collect or attempt to collect any debt.”

The Eighth Circuit observed that the Seventh Circuit previously addressed “whether a materiality standard applies to § 1692e.”  Specifically, in Hahn v. Triumph Partnerships LLC, 557 F.3d 755 (7th Cir. 2009), the Seventh Circuit found that the FDCPA “is designed to provide information that helps consumers to choose intelligently, . . . immaterial information neither contributes to that objective (if the statement is correct) nor undermines it (if the statement is incorrect).” Id. at 757-58 (citations omitted). Further, because “[a] statement cannot mislead unless it is material, a false but non-material statement is not actionable.” Id. at 758.

The Eighth Circuit found the Seventh Circuit’s reasoning persuasive and joined the circuits that “applied a materiality standard to § 1692e.” Id. at 757-58; Elyazidi v. SunTrust Bank, 780 F.3d 227, 234 (4th Cir. 2015); Jensen v. Pressler & Pressler, 791 F.3d 413, 421 (3d Cir. 2015); Miller v. Javitch, Block & Rathbone, 561 F.3d 588, 596 (6th Cir. 2009); Donohue v. Quick Collect, Inc., 592 F.3d 1027, 1033 (9th Cir. 2010).

The borrower also argued that the debt collector made materially false representations by representing that the documents it submitted to the state trial court were authentic. The borrower did not deny that his family received the healthcare services at issue or that his healthcare provider assigned the debt to the debt collector.  Instead, the borrower maintained that the documents the debt collector submitted did not establish the assignment and contained other false statements.

The Eighth Circuit rejected the borrower’s argument as “a debt collector’s loss of a collection action — standing alone — does not establish a violation” of the FDCPA. Hemmingsen v. Messerli & Kramer, P.A., 2 674 F.3d 814, 820 (8th Cir. 2012).

Further, just because “a lawsuit turns out ultimately to be unsuccessful” does not mean that filing the suit constitutes pursuing “an action that cannot legally be taken.” Id. (quoting Heintz v. Jenkins, 514 U.S. 291, 295-96 (1995)).

Here, the Eighth Circuit found that the debt collector’s failure to prove the assignment “did not constitute a materially false representation, and the other alleged inaccuracies in the exhibits are not material.”

RMA has many educational opportunities coming your way! If you’re looking to get individually certified, renew your certification, or stay on top of the newest industry information, then look no further.

EXECUTIVE SUMMIT (July 31 – August 2): Need those last few education credits to complete your certification? Attend RMA’s Executive Summit at Cliff House in Maine. This is a great way to earn a lot of credits while staying at a beautiful location!

FREE MONTHLY WEBINARS: RMA’s live monthly webinar series schedule is almost here! Get ready for 11 amazing presentations on relevant and timely topics. Don’t forget that RMA members receive one (1) free registration for each monthly webinar!

NEXT WEBINAR: The Debt Buyer Identity Crisis; Active, Passive, or Something Different?–  Wednesday, May 23rd | 9:00 am PT/ 12:00 pm ET

RECORDED WEBINARS: Did you miss a live webinar? All recorded monthly webinars are FREE to our members. Special series and select required courses for certification are paid at member rate.

  • Are you currently purchasing debt portfolios? If so, your company may need to get certified. Contact the RMA office to get more details on getting your Certified Professional Receivables Company (CPRC) designation.
  • Become a part of our ever-growing list of certified individuals! Earn your Certified Receivables Compliance Professional (CRCP) designation simply by taking continuing education! Click here for full details.
  • Renewing your company certification? Check out the newest updates in Version 6.0 of the Receivables Management Certification Program, including a change from a 2-year renewal cycle to a 3-year renewal cycle with the compliance audit taking place between the 16th and 20th month.

Congratulations to our new and renewed companies and individuals!

New Companies
Law Offices of Daniel C Consuegra, PL
PMGI, LLC
Pharus Funding, LLC

Renewed Companies
Dalty Acquisitions Inc
Cavalry Investments,  LLC
Portfolio Group Investors LLC
LCS Capital LLC
NDS LLC
eCast Settlement Corporation

New Individuals
Richard Brown, VP of Compliance, JH Capital Group, Inc.
Bill Schmiederer, Senior Vice President – Operations, Hilco Receivables, LLC
Paul Tossonian, President, Heritage Capital Group

Renewed Individuals
Serhan Akca, Chief Investment Officer, Turkasset Yarlik Yonetim A.S.
Greg Delev, Managing Attorney, Delev & Associates, LLC
Michael Druckman, CCO, Pharus Funding
Duke Edwards, Attorney, J. Duke Edwards, P.C.
Todd Lansky, Chief Compliance Officer & Managing Partner, Resurgence Capital, LLC
Thomas Ludwig, General Counsel and Executive Vice President, National Loan Exchange
Paul Andrew McLoughlin, Director of Operations, National Judgment Recovery Center
Neno Nastevski, Managing Partner, Steel Tower Holdings dba Atlantic Recovery Solutions LLC
Michael Roskam, Officer & CCO, Acctcorp International, Inc.
Leo Stawiarski, Manager/CCO, LCS Capital, LLC
Jan Stieger, Executive Director, RMA

View all certified companies and certified individuals on our website.

For help with certification, contact Michelle Wren at (916) 482-2462 or mwren@rmassociation.org.

Welcome new RMA members!
The RMA membership continues to grow. Welcome to our newest members:
AGORA Data, Inc. — Affiliate
Brownstein Hyatt Farber Schreck, LLP — Associate Law Firm
Capital Alliance Solutions, Inc. — Associate Collection Agency
Seventy Two Pixels — Affiliate
Sunset Solutions Group, LLC — Associate Debt Buyer

Read more about these members and other members on the Member Search page

Are you displaying the RMA member logo?
If you don’t have the rebranded RMA member logo displayed on your company’s home page, you’re missing out!
Many organizations and businesses choose to display logos of associations they belong with to convey a commitment to their industry profession. To display the member logo, email Barbara Souza at bsouza@rmassociation.org.

RMA is entering into a partnership with Insperity. The partnership between Insperity and RMA provides preferred member pricing on select Insperity® HR solutions.  As a RMA member company, you can customize your back office from the many products and services Insperity offers. Visit their website HERE to find out more on what they offer to RMA members.

HR Spotlight Brought to You by the RMA & Insperity Partnership:
Workplace Discrimination and Harassment: Are Your Managers Ready?

RMA works hard to open new markets and promote the industry at various conferences and events—look for us at these events.
The National Creditors Bar Association (NCBA) | May 16-19
Visit RMA at Booth #C6!

22nd Annual Non-Prime Auto Financing Conference (NAF) | May 30-June 1

National Independent Automobile Dealers Association (NIADA) Convention & Expo | June 18-21

Executive Summit 2018

Early bird savings are sailing away on June 1st! Register today and book your room before the room block fills up. RMA’s 2018 Executive Summit will take place in scenic Maine, July 31–August 2. To catch your early bird savings and hotel booking, visit rmassociation.org/ES18.

Sponsorship opportunities are available.

Contribute Now

Thank you 2017-2018 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!

Diamond ($25,000)
Certified Debt Buyer
Portfolio Recovery Associates, LLC

Titanium ($15,000)
Certified Debt Buyer
Cavalry Investments, LLC

Platinum ($10,000)
Certified Debt Buyer
Encore Capital Group
Associate Collection Agency
Financial Recovery Services, Inc.

Gold ($7,500)
Certified Debt Buyer
Unifund CCR LLC

Silver ($5,000)
Certified Debt Buyer
CKS Financial
Crown Asset Management, LLC
JH Capital Group
Plaza Services, LLC
Velocity Portfolio Group

Associate Debt Buyer
U.S. Equities Corp.

Associate Collection Agency
Credit Control, LLC

Affiliate
Digital Recognition Network
National Loan Exchange NLEX

Bronze ($2,500)
Certified Debt Buyer
Absolute Resolutions Corp.
Cornerstone Support
Galaxy Asset Management, LLC
Integras Capital Recovery LLC
RAzOR Capital
Security Credit Services, LLC

Associate Collection Agency
Glass Mountain Capital, LLC

Affiliate
EZ Messenger

Brass ($1,000)
Certified Debt Buyer
Acctcorp International, Inc.
Collins Asset Group
Jormandy, LLC
Mjollnir Group
Resurgence Capital, LLC
The Bureaus, Inc.
The Cadle Company

Certified Collection Agency
Stoneleigh Recovery Associates
Halsted Financial Services, LLC
Certified Law Firm
Peroutka, Miller, Klima & Peters, P.A.

Associate Debt Buyer
Balbec Capital
International Debt Buying Consultants, LLC
dba Portfolio Management Group
Western States Financial Management, LLC

Associate Law Firm
Andreu, Palma, Lavin & Solis, PLLC
Bedard Law Group, P.C.
Mullooly, Jeffrey, Rooney & Flynn, LLP
Simmonds & Narita, LLP
The Law Offices of Ronald S. Canter, LLC
Tobin & Marohn
Vargo & Janson, P.C.

Affiliate
CBC Companies
CMS Services
Resource Management Services, Inc.
VeriFacts, Inc.

Individual / Non-members
Century Support Services, LLC
Dara Tarkowski
Mike Colby
Other

Certified Debt Buyer
Autovest, LLC
Cascade Capital, LLC
Converging Capital, LLC.
Credit Management Corporation
Debt Recovery Solutions, LLC
eCAST Settlement Corp.
Gemini Capital Group, LLC
HS Financial Group, LLC
Icon Equities, LLC
Indiana Receivables, Inc.
Investment Retrievers, Inc.
Jefferson Capital Systems
NCB Management Services, Inc.
Poser Investments, Inc.
Quantum3 Group, LLC
Troy Capital, LLC
United Debt Holdings
West Bay Recovery, Inc.

Certified Broker
DebtTrader.com

Certified Collection Agency
Frontline Asset Strategies, LLC

Certified Law Firm
Dobberstein Law Firm, LLC
G. Reynolds Sims & Associates, P.C.
Law Offices of Steven Cohen, LLC
Lawgix Lawyers, LLC

Associate Debt Buyer
ABC Collections LLC
Allen & Durrant Corp.
Alliance Credit Services, Inc.
Atlas Acquisitions
Convergence Acquisitions LLC
Emergent Business Group Inc.
Fair Collections & Outsourcing, Inc.
Genesis Recovery Services
National Check Resolution, Inc.
Oliphant Financial, LLC
PerSolve, LLC
Pharus Funding, LLC
Phoenix Asset Group, LLC
Premier Forty Financial, LLC
RIP Medical Debt
Universal Fidelity LLC

Associate Collection Agency
A-1 Collection Service
Adams London & Weiss, LLC
Allied Collection Services, Inc.
Alpha Recovery Corp.
Apple Recovery, LLC
Crisis Consulting and Marketing
DRS Processing, LLC
ExpertSource Global Services Private Ltd.
FMS, Inc.
Lockhart, Morris & Montgomery, Inc.
Midwest Recovery Systems, LLC
SIMM Associates, Inc.
TCF & Associates
Universal Fidelity LLC

Associate Law Firm
Butler & Associates, P.A.
Delev & Associates, LLC
Faloni & Associates, LLC
Harrington, Anderson & DeBlasio
Hinshaw & Culbertson (added 1-16)
Hudson Cook, LLP
Hunt & Henriques
Keith. D. Weiner & Associates,
Kirschenbaum & Phillips, P.C.
Law Offices of Daniel C. Consuegra, P.L.
Law Office of James R. Vaughan, P.C.
Linebarger Goggan Blair & Sampson, LLP
Malone Akerly Martin PLLC
McNall & Associates, P.C.
Pressler and Pressler, LLP
Rausch, Sturm, Israel, Enerson & Hornik, LLC
Schachter Portnoy, LLC, Attorneys at Law
Venable, LLP
Winn Law Group, APC

International Debt Buyer
CBV Collection Services Ltd.

Affiliate
Accelerated Data Systems
Acumen Solutions Group
ComplyARM, Inc.
Comtronic Systems, LLC
Contact Relief
Convoke, Inc.
Court Appearance Professionals
DAKCS Software Systems, Inc.
Debt Sales Partners
Diversified Consultants, Inc. (added 1-16)
Equifax, Inc.
Garnet Capital Advisors, LLC
FLOCK Specialty Finance
Harvest Strategy Group, Inc.
JS Technologies, Inc.
Metronome Financial, LLC
MicroBilt Corporation
MRS BPO, LLC
PCI Group Inc.
SAM, Inc. – Solutions for Account Management
TransUnion
ProVest LLC
Quantrax Corporation Inc.
Solutions by Text
The Blacklist Alliance
Vertican Technologies, Inc.
WebRecon LLC
Y2Payment Systems, Inc.

Individual(s) / Non-member(s)
Central Portfolio Control, Inc.
Consumer Asset Management
Dan Crowley
David Reid
FMA Alliance, Ltd.
Gatestone & Co. International Inc.
Greenberg Advisors
Jan Stieger
Mac Murray & Shuster, LLP
PayNearMe
Receivables Management Association
Seventy Two Pixels, LLC
Welch & Company, LLC

2018-05-15T10:16:39+00:00 May 9, 2018|RMA Update|