In July 2022, the California Department of Financial Institutions (DFPI) published proposed regulations that would impact licensing, reporting, and record retention. On August 29, 2022, the Consumer Relations Consortium (CRC) submitted comments to the DFPI to address the proposal’s conflicts with other California laws, confusing definitions, and unreasonably burdensome requirements.

The CRC’s comments were prepared by Legal Advisory Board (LAB) members Joann Needleman of Clark Hill, Brit Suttell of Barron and Newburger, along with Stefanie Jackman and Jonathan Floyd* of Troutman Pepper.  

In its comments, the CRC asked the DFPI to modify its proposed regulations as follows: 

• Update licensing requirement definitions to ensure they are not duplicative of other California laws. Duplicative licensing requirements place an unnecessary burden and expense on debt collectors. By clarifying the definition to reference other California licensing laws, the DFPI would resolve potentially duplicative requirements.

• Clarify that “goods sold” includes “services rendered.” The proposed regulation requires licensees to calculate the “net proceeds generated by California debtor accounts.” However, “goods sold” does not accurately reflect the services debt collectors perform for their clients. By clarifying the definition, the DFPI would more accurately reflect the variety of services that debt collectors provide to their clients. 

• Reduce the proposed records retention requirement of seven years down to three years. Seven years is longer than any other state or federal requirement. This time period conflicts with other California record retention requirements and puts consumer data at risk long after an account is resolved. 

• Update the records requirement with appropriate definitions to provide clarification and more accurately reflect the debt collection process. The proposed regulation requires licensees to maintain records regarding “direct” or “indirect” communication but fails to define either term. It also requires debt collectors to provide a summary of a contact or message that results in payment but fails to explain how a debt collector should determine which communication led to a payment or how to address scenarios where a payment is made after a string of several communications.  

The complete comment filed by the CRC can be found here. 

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About the Consumer Relations Consortium

The Consumer Relations Consortium(CRC) is an organization comprised of more than 60 national companies representing the diverse ecosystem of debt collection including creditors, data/technology providers and compliance-oriented debt collectors that are larger market participants. Established in 2013, CRC is evolving the debt collection paradigm by engaging stakeholders—including consumer advocates, Federal and State regulators, academic and industry thought leaders, creditors and debt collectors—and challenging them to move beyond talking points and focus on fashioning real-world solutions that actually improve the consumer experience. CRC’s collaborative and candid approach is unique in the market.  CRC is managed by The iA Institute. Follow the CRC on LinkedIn here. 

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*not member of the Legal Advisory Board

ARLINGTON, Va. – September 7, 2022 – Convoke, a leader in SaaS solutions for the debt collection market, is pleased to announce the launch of a new product: Freeform – a secure and auditable file-sharing tool built for collaboration between credit issuers and third parties.

Freeform

Freeform is designed to be a flexible, secure, and easy-to-use collaboration platform for credit issuers, collection agencies, law firms, and debt buyers. With Freeform, users can upload, share, view, and download files easily – all in one centrally managed location. With its clear, intuitive design, Freeform provides endless flexibility for its users’ needs. Whether for background checks, third-party audits, ad hoc document sharing, or any other use case, Freeform can support it. It is built with security in mind on Convoke’s trusted, independently audited architecture with no data stored in the public cloud. Whether it’s commercial sharing systems, other shared drives, or email, all current solutions pose serious security issues and lack systemic organization. Freeform overcomes these problems by allowing Convoke customers to share files securely and easily.

“We are very pleased to present this new product to the recovery industry,” said David Pauken, CEO of Convoke. “Credit issuers and their third parties need an easy, flexible, and secure method to send and receive unstructured files on a trusted platform which they can audit to ensure it meets their strict security protocols. Until today, no such solution existed in the market. Convoke is confident that Freeform will add significant value to what we offer to our customers through our existing platform.”

Convoke will continue to develop and expand the capabilities of Freeform to fit the changing business and regulatory requirements of credit issuers. Freeform adds to the existing value that Convoke provides to the collections market and foreshadows more innovative products still to come.

About Convoke

Convoke is an oversight management system that is transforming the way credit issuers manage third-party debt collection, leveraging a decade of experience for the issuers it serves. It provides unprecedented transparency and accountability, facilitating issuer debt validation and third-party oversight.  With its powerful reporting, tracking, and auditing capabilities, issuers are able to have confidence that they are in compliance with internal and regulatory requirements. Convoke enables credit issuers to grow recovery, reduce costs, improve compliance, and protect their brand. Convoke is headquartered in Arlington, VA. For more information on Convoke, please visit www.convokesystems.com. 

LENEXA, Kan. — One True Holding Company d/b/a/ TrueML, a financial technology software company developing machine learning-driven products that revolutionize the debt collection process, today announced that Steve Carlson will join the company as president. He joins as TrueML readies to accelerate its growth, with plans to expand its industry leading software solution, doubling run rate to reach more consumers with a digital first experience.

TrueML develops software including patented machine learning technology to create a digital-first debt collection process that aligns with consumer communication preferences. Formerly One True Holding Company, the financial technology company rebranded in July 2022 as TrueML to bring more focus to its machine learning software development, which is a key aspect of its overall growth strategy. As a mission-driven company, TrueML aims to bring solutions to the marketplace that redefine how creditors and consumers engage in debt collection. 

TrueML’s mission is supported by data scientists, financial services industry experts and customer experience enthusiasts collectively building technology to serve people in a digital-first way by recognizing their unique needs and preferences as human beings and endeavoring toward ensuring nobody gets locked out of the financial system. 

“TrueML is building solutions to help consumers navigate financial distress, which is a mission around which I am excited to rally,” said Carlson. “We have seen how the adoption of digital-first platforms has expanded the reach of consumer credit offerings, but tools for managing the rest of the credit life cycle remain underdeveloped, especially for consumers living a digital-native life. TrueML has built a tremendous team of innovators who are working to solve this problem, and I look forward to the opportunity to lead the company to even farther-reaching success.”

With more than 20 years of leadership experience in financial services at companies such as HSBC, Chase and Intuit, Carlson is a versatile and strategic fintech executive, advisor and board director who delivers increased value by scaling companies for accelerated growth. Previously the CEO at ForwardLine Financial, where he now serves as executive chairman, Carlson also serves as a consultant and advisor to numerous venture capital and private equity funds, as well as multiple early-stage and mid-market financial services firms in the U.S. and Latin America. He is recognized as a mission-driven industry innovator and collaborative, high-impact leader who has delivered results in diverse emerging-growth and large-scale businesses. A veteran of working with regulators and having served on the CFPB’s Consumer Advisory Board, Carlson brings invaluable experience with the fintech landscape, regulatory challenges and market dynamics that impact TrueML’s business.

“We’re thrilled to have Steve join our team as we expand our capabilities and accelerate our mission to revolutionize the way consumers engage with financial services,” said Ohad Samet, co-founder and CEO of TrueML. “As a founder, CEO and board member, Steve has extensive industry experience and brings his broad and deep fintech network to our ecosystem, which will support us in our continued expansion with more tech-oriented prospects and clients. His addition to the team will increase our span of management, allow us to streamline decision making, and add a depth of experience that will undoubtedly advance our business goals.”

TrueML was born in 2013 after Samet had a negative experience with an overdue bill, and he and his brother Nadav set out to create better experiences and more productive outcomes for distressed borrowers and creditors alike. Since then its subsidiaries have served more than 20 million consumers with a compliant digital-first approach. To learn more about TrueML, its subsidiaries and their products, visit www.TrueML.co, and follow on social media @TrueMLco.

About TrueML

TrueML is a software company developing machine learning-driven products that prioritize customer experience and revolutionize the experience of consumers seeking financial health. The mission-driven team of data scientists, financial services industry experts and customer experience fanatics are building technology to serve people in a way that recognizes their unique needs and preferences as human beings and endeavoring toward ensuring nobody gets locked out of the financial system.

Show Notes

Ensuring #fairness at all levels in financial services is the new norm. But how do you do it and how do you know when it is achieved? Kareem Saleh, CEO and Founder of FairPlay AI stops by #CreditEcoToGo to talk about his platform and new #ai fairness methodologies, which do a better job in assessing risk, while at the same time expanding opportunities for credit access. Kareem tells us that “fairness through awareness” and machine-learning algorithms always need to be challenged and refined. Rather than settling for one result, Fairplay exposes their algorithms during model development for alternative outcomes that might not have been well-represented in the first round of data, making the data more sensitive to disadvantaged groups. Kareem hopes this philosophy will enable all financial service entities within the credit cycle, to continue to harness data for the benefit of all consumers. #financialservice #equalaccess #fintech 

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DISCLAIMER – No information contained in this Podcast or on this Website shall constitute financial, investment, legal and/or other professional advice and that no professional relationship of any kind is created between you and podcast host, the guests or Clark Hill PLC. You are urged to speak with your financial, investment, or legal advisors before making any investment or legal decisions.

AURORA, Colo. — Wakefield & Associates, one of the largest healthcare revenue cycle solutions companies in the nation, announced today that industry veteran Joseph Partain has joined the  organization in an executive role to provide attorney-driven complex claims solutions to healthcare providers nationwide. 

“As one of the leading revenue cycle solutions companies in the nation, Wakefield & Associates makes vital contributions to the financial health of medical providers through innovative and proven Revenue Cycle Management (RCM) solutions,” said Matt Laws, CEO of Wakefield. “Joe adds 30 years of legal and revenue cycle operational expertise to Wakefield’s array of service lines and is known in the industry as a well-regarded, versatile and strategic leader, with a history of success leading results-oriented legal operations.”  

Prior to joining Wakefield & Associates, Partain served as the long-standing SVP of Legal RCM Operations & General Counsel/Chief HIPAA Compliance Officer & Corporate Secretary (Chief Legal Officer) at ACT Holdings, Inc. (the parent company for the ACT, Inc. and the Convergent companies, including Convergent Revenue Cycle Management, Inc).

“I am excited to be joining Wakefield & Associates and its leadership team.  I really look forward to taking on this role and building upon the successes and growth that the company is already experiencing.  I am anxious to contribute to future accomplishments to the benefit of Wakefield’s employees, stakeholders and clients,” Joseph Partain said.   

About Wakefield & Associates

Established in 1933, Wakefield & Associates specializes in Revenue Cycle Management Solutions, which includes System Conversions, Call Center Partnerships, Insurance Billing, Process & System Workflow Design, Eligibility Assistance Programs, Out-of-Network Claims resolution, Primary & Secondary Bad Debt Collections, Legal Solutions for over 5,000 medical clients nation-wide. Wakefield & Associates has and continues to make significant investments in people, processes, and technologies that allow us to develop and implement quality solutions that accelerate cash flow and A/R liquidation. Wakefield & Associates has developed effective recovery techniques and partnership collaborations that result in a positive patient experience.

In a recent blog post, the CFPB reported on research into various factors considered significant in explaining current credit card interest rates.  The CFPB reported that over 175 million Americans have at least one credit card, half of which carry a balance that continues to accrue increasingly high interest rates.  In an era that has seen the Federal Reserve Bank aggressively raise interest rates to combat inflation, Americans’ increasing reliance upon credit cards to cover every day expenses has sparked renewed interest in the practices of the credit card industry with respect to interest rates and fees charged.

The research collected in the blog post shows credit card interest rates increased following the Great Recession despite a number of industry indicators suggesting the risk of credit card lending has fallen to an all-time low.  The factors presented include (1) record low charge-off rates (the measure of accounts deemed uncollectable after sustained delinquency); (2) a stagnant percentage of subprime cardholders; and (3) historically low prime rates. 

From these factors, the CFPB blog post posits that the recent increase in credit card interest rates compared to significantly lower risk could account for historic profit numbers reported by credit card banks in 2021, 7% annualized return on assets – the largest reported return in over twenty years.  The blog does not mention, however, that the same Federal Reserve Bank’s Report to Congress noted profitability of only 2.4% in the previous year, nor that the same Report ascribes much of the increased profitability to changes in provisioning for loan losses and not to increases in credit card interest rates.

The blog post focusing on these factors is an indication that the CFPB is poised to increase its scrutiny on the credit card industry in the near future.  It is worth noting, however, that the CFPB is prohibited from imposing a usury ceiling under Section 1027(o) of the Dodd-Frank Act.  Despite the fact that the CFPB blog focuses on a topic (interest rates) over which it is powerless to act, and it does not mention credit card late fees, the CFPB has recently announced that it will be reviewing the maximum permitted late charge under the CARD Act.

Another disquieting statement in the CFPB blog is the observation that the high interest rates may be the result of the dominance in the industry of “a few key players” and a symptom of anti-competitive practices.  Whether that is true or not (and the CFPB has not provided any data to corroborate the statement), the CFPB does not have jurisdiction to enforce antitrust laws.  This has not stopped Director Chopra from repeatedly evoking anti-competitive behavior as the root-cause for many results he does not like. 

WILMINGTON, Del. — Phillips & Cohen Associates, Ltd. (PCA), the global leader in deceased account management and debt settlement servicing, with clients in the United States, Canada, United Kingdom, Ireland, Australia, New Zealand, Spain, and Germany, welcomes Janneen Jackson to lead the latest of PCA’s technology launches, The Debt Settlement Registry (powered by SettleNOW).

PCA’s proprietary platform, The Debt Settlement Registry (DSR) provides creditors and debt settlement agencies (DSA’s) access to streamlined and strategic oversight of consistently growing debt settlement portfolios. Powered by SettleNOW, PCA’s settlement offer strategy engine, The DSR is currently integrated with 150+ DSA’s and top industry payment platforms.  Using real-time business intelligence through Tableau, The DSR enhances and streamlines the end-to-end debt settlement process including offers, payments, and letters.

Janneen will lead the introduction of the The Debt Settlement Registry to new and existing clients and partner with DSAs to demonstrate how the DSR will improve their efficiencies, at no cost to them or their consumers. Prior to joining PCA, Janneen served as VP of Operations and VP of Business Relationships at Americor. Her depth of knowledge is highly regarded across the debt settlement industry as a result of the dynamic and steadfast leadership she has consistently shown throughout her nearly 20-year career in the ARM industry.  She also served on the AFCC Creditor Relations Advisory Board and is a current member of Women of Debt Relief.

Jackson commented, “I am so excited to be joining a company that I have always held in such high esteem. I look forward to working with the entire team at Phillips & Cohen Associates and being a part of bringing The Debt Settlement Registry to the market.” 

Adam S. Cohen, Co-Chairman/CEO commented, “The Debt Settlement Registry brings a much-needed innovation to a complex and growing industry. The efficiencies this platform creates for consumers, creditors and debt settlement agencies are significant and we are excited to introduce it to the market. Janneen’s depth of experience and drive for success make her the ideal leader for this launch. We could not be more excited to have her join the team.”

Matthew Saperstein, SVP, Business Development North America, commented, “The Debt Settlement Registry significantly accelerates the much-needed innovation in the debt settlement industry. With Janneen’s proven leadership, we are confident our new and existing clients will benefit greatly, as will their customers.”

About Phillips & Cohen Associates, Ltd.

Phillips & Cohen Associates, Ltd. is a specialty receivable management company providing customized services to creditors in a variety of unique market segments.  Phillips & Cohen Associates, Ltd is domestically headquartered in Wilmington, DE, with additional offices in Colorado and Florida as well as international offices in the UK, Canada, Spain, Germany, and Australia.  For more information about Phillips & Cohen Associates visit www.phillips-cohen.com. PCA provides Equal Employment Opportunity for all individuals regardless of race, color, religion, gender, age, national origin, disability, marital status, sexual orientation, veteran status, genetic information, and any other basis protected by federal, state, or local laws.

FORT WORTH, TX – DRN is honored to announce that receivables management veteran Mike Colby has joined the team to take on the role of Outside Sales, with his primary focus on marketing a cutting-edge skip tracing product designed specifically to enhance legal strategy in the accounts receivable management industry. 

“To have a well-known and well-respected ARM guru such as Mr. Colby coming on board is a noteworthy testament to the efficacy of the product we’ve worked hard to develop. We’re proud of what we have to offer and excited to have Mike on the team,” said Jeremiah Wheeler, President at DRN.  

Mr. Colby brings over forty years of experience and executive leadership in the accounts receivables management industry. He has built long-term relationships and invested time with multiple major industry participants, sourcing acquisitions and developing successful, sustainable, and strategic business partnerships. 

As a Board Member of RMAI for nearly four years, Mr. Colby has continually demonstrated his commitment to forging industry progress, increasing advocacy, and marketing high-quality products. His reputation for professionalism and integrity serves him well in multiple roles as he provides contractual services across the industry. 

“I’m impressed with the creative product DRN has developed and I look forward to engaging in conversations with new and long-time colleagues about its potential. The value is there and is, to my knowledge, unrivaled and unique to anything I’ve seen before. It’s exciting to be a part of showing that to the world,” said Mr. Colby. 

An avid traveler, people-person, and proud septuagenarian, Mr. Colby welcomes calls and meetings from those interested to catch up on life and business. 

About DRN

Digital Recognition Network (DRN) provides vehicle location data and analytics for Financial Services, Insurance, and Auto Recovery clients to help optimize their portfolios, reduce losses, detect fraud, and manage risk. Our vehicle location data and analytics are new alternative data and insights that clients can’t get anywhere else. Over 1,000 clients rely on DRN data and technology to find vehicles faster, drive decisions, lower risk and increase revenue.

CINCINNATI, OH — Members of Unifund’s Legal Department recently partnered with LIFT D.C. in providing an education series for consumers on improving consumers’ financial health.

LIFT D.C. is a national non-profit headquartered in Washington, D.C. whose mission “is to break the cycle of poverty by investing in parents.”  LIFT works with parents to help their families achieve economic mobility through, among other things, education and coaching.

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This summer, Unifund attorneys Trudy Weiss Craig, General Counsel, and Susan Appel, Legal Counsel, along with Unifund paralegal, Heather Richardson, hosted a series of webinars with LIFT consumers. Panel discussions featured videos from Unifund’s Learn and Earn Program, in which Unifund consumers who complete educational sessions earn credit toward their debts.  Topics of discussion included Budgeting and Financial Stress, Debt Reduction and Debt Snowball, Credit and Identity Theft, and Buying versus Renting and Car Buying.  The women also shared resources which LIFT members can consult as they seek to improve their financial situation.

“We were honored to spend time assisting LIFT members on their journey for financial well-being, and to interact with consumers in their efforts to improve their economic situation,” said Trudy Weiss Craig.  “The sessions were followed with well-thought out questions and discussions, and we enjoyed the positive exchange.  We are grateful LIFT offered us this opportunity.”

About Unifund CCR Partners and Unifund CCR, LLC

Founded in 1986, Unifund CCR Partners and Unifund CCR, LLC has been a leading manager and purchaser of distressed consumer receivables. Unifund specializes in managing, servicing, purchasing, and liquidating non-performing judgments and defaulted consumer portfolios from major banks, creditors, originators, financial institutions, and owners of distressed receivables. We believe that our success is interdependent with the well-being of the communities in which our employees live and work and actively partner with multiple charitable organizations each year. Unifund is headquartered in Cincinnati, Ohio.

Banking trade groups are challenging a request for information (RFI) issued by the Consumer Financial Protection Bureau (CFPB) regarding customer service at large financial institutions. In a joint letter dated August 22, the Bank Policy Institute, Consumer Bankers Association, and the American Bankers Association objected to the CFPB’s insinuation that big banks are providing a sub-par customer experience and challenged the CFPB’s authority to regulate customer service.

“Customer service is an important and essential priority for banks. The CFPB’s statements in the RFI unfairly characterize the quality of customer service provided by banks and appear to reflect the CFPB’s pre-determined conclusions that banks do not provide high quality customer service. This approach is unhelpful to consumers … and is likely to confuse them.” The groups cite to recent studies reporting high overall customer satisfaction to support their claim.

The letter takes aim at the CFPB’s authority under the Dodd-Frank Act, noting that it says nothing about customer service or relationship banking and does not “grant the CFPB the authority to dictate, via regulation or otherwise, the type of customer service banks provide or the manner in which they provide service.” Although the CFPB maintains its authority under Section 1034(c) of the Dodd-Frank Act, which requires depository institutions with more than $10 billion in assets to provide timely responses to consumers requests for information about a financial product or service that the consumer obtained from the depository institution, the groups dispute the CFPB’s asserted authority under this section, stating “a bank’s obligation to provide a consumer particular information or data ‘in a timely manner’ in response to a specific request for such information is very different from an obligation to serve customers on particular terms or in a certain manner more generally … it appears that the CFPB is attempting to use this RFI to create a legal authority that it does not have: the right to dictate the type of customer service banks provide and the manner in which they do so.”

The groups also challenge the notion that the embrace of technology by financial institutions has led to a decrease in customer satisfaction, stating that the RFI “creates the false impression that the adoption of digital banking tools diminishes customer service. In reality, consumer demand drove banks to develop these tools and continued and increasing demand has encouraged banks to retain and grow these platforms.”

In the RFI published in late June, the CFPB invited comments from the public regarding what customer service obstacles consumers face in the banking market, and specifically, what information would be helpful for consumers to obtain.