Archives for January 2019

Last week in Compliance Weekly, we looked at the tension between two competing/conflicting Massachusetts regulations:

• 940 CMR 7.00: Debt Collection Regulations, published by the Attorney General’s office
• 209 CMR 18.00: Conduct of the Business of Debt Collectors and Loan Servicers, published by the Division of Banks and Loan Agencies

Both regulations exist at the same time, and they don’t agree with each other. The best illustration of this was highlighted in the conflicting guidance provided to the industry by the regulators in question:

• The Mass. Attorney General believes that the Attorney General’s Debt Collection Regulations, 940 C.M.R. 7.00 et seq., apply to both creditors and third-party debt collectors.
• The Mass. Division of Banks believes that the Attorney General’s Debt Collection Regulations, 940 C.M.R. 7.00 et seq., do not apply to third party debt collectors.

So much for clarity and consistency.

Who is a creditor, and when?

Perhaps the biggest tension between the two documents is that the Attorney General’s office lumps third-party debt collectors and some debt buyers under the umbrella “creditor,” whereas the Division of Banks and Loan Agencies separates the two (I’ve bolded certain passages for emphasis):

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• Attorney General: “Creditor means any person and his or her agents, servants, employees, or attorneys engaged in collecting a debt owed or alleged to be owed to him or her by a debtor and shall also include a buyer of delinquent debt who hires a third party or an attorney to collect such a debt provided, however, that a person shall not be deemed to be engaged in collecting a debt, for the purpose of 940 CMR 7.00, if his or her activities are solely for the purpose of serving legal process on another person in connection with the judicial enforcement of a debt.”
• Division of Banks and Loan Servicers: “Creditor means any person who offers, or extends credit creating a debt or to whom a debt is owed, but such term does not include any person to the extent that he receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such a debt for another.”

I cannot give you legal advice for a variety of reasons, probably the strongest being that I am not a lawyer no matter how many times I attempt to argue in front of the Supreme Court. But I can offer some suggestions. You should absolutely be in conversation with your own legal counsel about this.

Suggestions

• Familiarize yourself with both sets of rules (linked above).
• When there appears to be conflict between the rules (and I’ll show some examples in a titch), go with the more prohibitive version.

Examples

940 CMR 7.04 Contact with Debtors, sec. (d) v. 209 CMR 18.16 False or Misleading Representations, sec. (16)

An early frustration you may find in familiarizing yourself with the two sets of regulations is that they don’t necessarily overlap cleanly. In this example, we have to look at a section on contact in one, and false or misleading representations in another.

They primarily agree with each other, and require that collectors must identify themselves, either with their given name, or, if an alias, the collector must use the same alias for the duration of their employment with that agency. The main difference: the Division of Banks and Loan Servicers wants a list of employee aliases sent to the Commissioner while the Attorney General has no such requirement.

Suggestion: follow the Division of Banks and Loan Servicers instructions.

940 CMR 7.04 Contact with Debtors, sec. (i) v. 209 CMR 18.14 Communication in Connection with Debt Collection, sec. (1)(e)

Again, both regs primarily agree with each other; if you are going to communicate with a consumer at his or her place of employment, you have to send a “Notice of Important Rights.” The main difference – but it is a difference, and therefore must be accounted for – is in what that Notice of Important Rights looks like.

The Division of Banks and Loan Servicers wants the language to look like this:

NOTICE OF IMPORTANT RIGHTS

You have the right to make a written or oral request that telephone calls regarding your debt not be made to you at your place of employment. Any such oral request will be valid for only ten days unless you provide written confirmation of the request postmarked or delivered within seven days of such request. You may terminate this request by writing to the debt collector.

The Attorney General’s office wants to see the notice in all-caps:

NOTICE OF IMPORTANT RIGHTS

YOU HAVE THE RIGHT TO MAKE A WRITTEN OR ORAL REQUEST THAT TELEPHONE CALLS REGARDING YOUR DEBT NOT BE MADE TO YOU AT YOUR PLACE OF EMPLOYMENT. ANY SUCH ORAL REQUEST WILL BE VALID FOR ONLY TEN DAYS UNLESS YOU PROVIDE WRITTEN CONFIRMATION OF THE REQUEST POSTMARKED OR DELIVERED WITHIN SEVEN DAYS OF SUCH REQUEST. YOU MAY TERMINATE THIS REQUEST BY WRITING TO THE CREDITOR.

The language is almost the same; because the Attorney General classifies debt collectors as creditors, you’ll note that requests in writing are sent to the creditor. The presentation is different.

Suggestion: follow the Attorney General’s formatting, but use “debt collector” rather than “creditor” so as not to confuse the least sophisticated consumer.

940 CMR 7.05 Contact with Persons Residing in the Household of a Debtor, sec. (2) v. 209 CMR 18.14 Communication in Connection with Debt Collection, sec. (4)

This is a significant conflict between the two regulations.

Attorney General: “It shall constitute an unfair or deceptive act or practice for a creditor to imply the fact of a debt, orally or in writing, to persons who reside in the household of a debtor, other than the debtor.”

Division of Banks and Loan Servicers: “For the purpose of 209 CMR 18.14, the term “consumer” includes the consumer’s spouse, parent (if the consumer is a minor), guardian, executor, or administrator.”

The Division of Banks and Loan Servicers allows for communication with spouses; the Attorney General’s office does not. In fact, the word “spouse” does not appear in the Attorney General’s regulations at all with regard to communication and debt collection.

Suggestion: the safest suggestion here is to follow the Attorney General’s regulations, as it is the more prohibitive of the two.

Conclusion

Several industry advocates have been working with Massachusetts on these conflicts; however, they’re still in the early stages of this process, and nothing, yet, has been made clear except that both regulations exist, and both are enforceable.

And even the safest suggestions aren’t fool-proof suggestions. The advice suggested has no guarantees attached to it. Until such time as there’s a reconciliation between Massachusetts’s Attorney General’s office and the Division of Banks and Loan Servicers, Massachusetts remains, in technical terms, a mess.

There seems to be a never-ending supply of letter language Fair Debt Collection Practices Act (FDCPA) cases. Today we’ll drill into an Eastern District of Wisconsin decision that discusses the language used when presenting a payment option to a consumer. In Al v. Van Ru Credit Corp., No. 17-CV-1738 (E.D. Wisc. Jan. 14, 2019), the court took issue with a letter stating thatthe consumer would need to act “promptly” to take advantage of a settlement offer without giving an actual due date.

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Factual and Procedural Background

The facts in this case are relatively straight-forward. Defendant collection agency sent a letter to plaintiff that stated, “The balance you owe as of the date of this letter is $462.31. Presently, we are willing to accept $227.39 to settle your account, provided that you act promptly.” Plaintiff sued defendant alleging that the letter violates the FDCPA and the Wisconsin Consumer Protection Act.

Defendant’s corporate representative testified that the letter is a form template that is sent if defendant deems it appropriate. Defendant would honor the settlement payment at any time until either the account is closed or the creditor changed defendant’s settlement authority. The settlement authority throughout the placement of this account gradually decreased. The letter in question was sent on March 10, 2017 and the creditor recalled the account on March 30, 2017.

Defendant filed a motion for summary judgment on all claims while plaintiff filed a motion for summary judgment seeking to remove the bona fide error defense.

The Decision

The court denied defendant’s motion in part and granted it in part; it also granted plaintiff’s motion.

The court found that the question of whether the letter was deceptive or misleading is best left for a jury. Of the three types of deceptive or misleading categories established by the Seventh Circuit in Janetos v. Fulton Friedman & Gullace, LLP, this letter might fall into the second: it is not misleading on its face, but has the potential to be misleading to the least sophisticated consumer. This, according to the court, falls to a jury to evaluate and thus summary judgment is not appropriate.

The court also took issue with the fact that the letter was unclear as to the terms of payment. Specifically:

The Letter is potentially deceiving as to the most basic element of the parties’ relationship — the terms of payment for the debt, namely the time in which to pay. Indeed, the very purpose of requesting “prompt” payment was to influence Plaintiff’s decision to pay.

The court did grant summary judgment inh favor of defendant regarding the 692f claims. Section 1692f of the FDCPA is a catch-all provision and, according to the court, shouldn’t proceed on the same facts that underlie a more specific violation under a different section.

Finally, the court decided to strike down defendant’s bona fide error defense. The court found that defendant presented no evidence showing that they inadvertently included the language or that there was some printing error. Instead, the court found that defendant was trying to argue a mistake of law, which is not protected under the bona fide error defense.

insideARM Perspective

There you have it, folks. “Promptly” doesn’t cut it, but a due date might have done so according to the tea leaves set out by this decision. Will this open up another litigation can of worms? Probably; most letter cases that attempt to clarify letter requirements do. Alas, this is the burden debt collectors bear with a vague and outdated statute like the FDCPA, which is why many industry members are anxiously awaiting the Consumer Financial Protection Bureau’s new third party debt collection rules due out this spring.

ARLINGTON HEIGHTS, Ill. — Chicago-Commercial Collection Agencies of America has elected its new Board of Directors and has announced the slate of officers of the organization.

Board members include Bruce Godwin of Williams, Babbit and Weisman, Inc., Meg Scotty of Brennan & Clark Ltd., Fred Wasserspring of Lyon Collection Services, Inc., Pete Roth of CST Company, George Bresler of GB Collects LLC, David Herer of ABC-Amega, Inc., and Humberto Matz of Creditors Adjustment Bureau.

Officers are: Bruce Godwin, President; Pete Roth, Vice President; David Herer, Secretary; Fred Wasserspring, Treasurer; and Meg Scotty, Past President.

The Board recently held a successful strategic planning meeting in Orlando, Florida. Along with the Executive Director, the board members developed a plan to be implemented with its membership to bring focus on not only today’s needs but anticipated organizational and industry needs in the future. Central to those efforts is to continue to fulfill the mission of the Association: to elevate the standards and uphold the professionalism in the commercial collection industry for the benefit of protecting the credit granting community.

The alignment with partners such as The Credit Research Foundation (CRF) allows a reach into that community, which is key to communicate the mission of protection. “Being a Platinum Partner and having earned the endorsement of The Credit Research Foundation cultivates an environment of interaction with credit practitioners to exhibit our rigorous certification requirements,” mentioned Annette M. Waggoner, Executive Director.

The Board created key programming and education initiatives which will fulfill another mission of the Association: to assist members in their compliance to regulations, adoption of the latest technologies and efficiency in operations.

“Commercial Collection Agencies of America is the ONLY certifying body in which all agency members are certified,” noted Bruce Godwin, President. “Credit grantors have told us how important this fact is and how it eliminates marketplace confusion,” he added.

About Commerical Collection Agencies of America

Commercial Collection Agencies of America is an organization of commercial collection agencies, creditors’ rights attorneys and law list publishers. The certification program, which is the platinum standard in the industry, is promulgated by an Independent Standards Board, which includes professionals from a cross-section of industries related to credit and collections. For more information or to locate a certified commercial collection agency, please visit, www.commercialcollectionagenciesofamerica.com.

Yesterday the Department of Education (ED) released its re-do of the solicitation for business process services under the ambitious new NextGen student loan servicing environment. As I read this new solicitation, I’m still not sure how Private Collection Agencies (PCAs) can compete.

The original version of the solicitation incorporated a two-phase procurement, where only those chosen during phase one would be able to bid on phase two. But ED changed the scope of work between phase one and phase two, which sparked protests from …just about everyone, claiming they had been unfairly excluded from bidding on a contract they would have been qualified for. Suits were filed in the Court of Federal Claims (COFC). Judge Thomas Wheeler sided with the plaintiffs, and ordered the re-do from ED.

To put the PCA role in full context here, let’s back up a moment. Here is the VERY brief history of how we got where we are:

What began in 2009 as a 5-year contract for 17 large (unrestricted) and five small debt collection companies became a contract in 2014 for 11 small companies and a delay for the large firm awards. Eventually, in December 2016 seven large companies received awards, which launched dozens of protests from those who were left out, followed by a re-do, a whittling down to just two large companies, then more protests, and then… nothing. No large company awards at all. On May 13, 2018 ED cancelled the whole thing, offering this justification:

“The solicitation will be cancelled due to a substantial change in the requirements to perform collection and administrative resolution activities on defaulted Federal student loan debts. In the future, ED plans to significantly enhance its engagement at the 90-day delinquency mark in an effort to help borrowers more effectively manage their Federal student loan debt. ED expects these enhanced outreach efforts to reduce the volume of borrowers that default, improve customer service to delinquent borrowers, and lower overall delinquency levels.”

As you may have guessed, complaints were filed, and everyone went to the COFC. This chapter ended on September 14, 2018, with the Judge permanently enjoining ED from cancelling the solicitation.

(A more detailed recap of the above, which I call the first four chapters of this saga, is here.)

This is where NextGen comes in.

Backing up slightly…In August 2017 ED announced a “Next Generation Processing and Servicing” plan (NextGen) that would put all federal student loan servicers on a common technology platform with a single database in order to drastically improve customer support.

By February 2018, ED issued a Solicitation for Phase I of the NextGen project, including a diagram (you can see it in this story) showing that default servicing and recovery (including PCAs) are in the overall vision, but not part of the current Solicitation. As a result, most PCAs did not bid on the contract (unless they were in a position to offer the pre-default services).

As we learned with ED’s cancellation of the unrestricted PCA solicitation, those who win a  NextGen contract will be the ones to implement the “enhanced servicing” strategies that are meant to drastically reduce defaults by preventing them in the first place. (Note the timing — February 2018 was just three months prior to ED’s cancellation of the Solicitation for unrestricted PCAs, claiming their services would be unnecessary.)

At the end of September 2018, ED announced it had completed Phase I, and had chosen a set of vendors who are eligible to participate in Phase II – which now clearly spells out  requirements for post-default servicing and collection activities. In short, ED changed the scope mid-stream.

PCAs cried foul (as did some of the phase one winners), and so began what I call chapter five of the PCA quest for a Department of Education student loan contract.

Again, lots of stakeholders went to the COFC, and met with our friend, Judge Thomas Wheeler. The claims are explained in this story. In the end, Judge Wheeler sided with the plaintiffs and urged ED to pursue corrective action that would avoid a repeat of the previous chapters of this saga. He gave the Department until December 14th.

And, on December 14, 2018, ED cancelled the procurement, revoking the Phase I awards and saying it would issue a new solicitation by January 15, 2019, allowing for a “full and open competition.”

Now we’re back to today.

As promised, yesterday ED issued three new RFPs and cancelled previous ones. The three include:

RFP R00005 – Enhanced Servicing Solution – This is the immediate term solution used by ED to justify its cancellation of the unrestricted PCA Solicitation. Proposals are due by February 25, 2019 [Editor’s note: this is corrected. A previous version of the story listed the due date as March 25, 2019]

RFP R00008 – Business Process Operations Solution – After the Enhanced Servicing Solution has been awarded, a timeline will be set for this Solicitation – there is currently no due date, except that bidders must complete a Past Performance Reference Questionnaire by March 1, 2019.

RFP R00007 – Optimal Processing Solution – This is the long-term system solution that carries a two-year implementation period. The due date is March 25, 2019. 

For purposes of this artcile, I’ve chosen to focus on RFP R00008 – Business Process Operations (BPO) solutions (which also references the Enhanced Servicing Solution). The following are some high level details:

• The award will be an indefinite-delivery indefinite-quantity contract.
• The base ordering period will be five years, with one five-year optional extension.
• There will be multiple awards under this Solicitation.
• The scope of services spans the entire lifecycle of student financing — from application for financing, to origination and disbursement, to processing and servicing and pay-off or default.
• All activities will be performed under the Federal Student Aid (FSA) brand.

ED articulates four goals for NextGen servicing:

1. Provide a world-class customer experience. Among other things, this experience includes the ability to receive support through the channel most appropriate to their needs, and should be continuously improved through activities like data analysis and iterative user testing.
2. Create an environment that can efficiently and effectively integrate new and existing capabilities, and also stay in compliance with changing Federal rules, regulations and law.
3. Drive greater operational efficiency by reducing complexity, improving the stability and security of systems, and ensuring effective use of taxpayer dollars.
4. Measure success in part on how well it improves customer outcomes and facilitates compliance with Federal consumer protection standards and Title IV legal requirements. Examples include: decreased percentage of borrowers in delinquency or default, reduction of borrowers in deferment and forbearance, increased repayment rate, and increased digital self-service and correspondence.

The Solicitation sets an ambitious goal:

“In the near term, FSA anticipates the need for multiple loan processing solutions. Long-term, however, FSA’s goal is to move towards the future-state of a single platform operating environment. Most immediately and on a rapid schedule, FSA anticipates migrating, through conversion, nearly 200 million loan accounts from existing servicers to the Enhanced Processing Solution, while minimizing disruptions for customers.” (emphasis added)

Under the title of Solution Objectives, the Solicitation states:

Business Process Operations will support efficient and effective operations across the entire lifecycle of student financing…under FSA’s single brand, by providing the personnel necessary to respond to inbound customer (e.g. student applicants, borrowers, etc.) and partner (e.g. schools) inquiries, execute separately-developed outbound outreach campaigns, and perform back-office processing activities that cannot be automated. These personnel will provide an enhanced level of service, across the full life cycle of student financing, beyond today’s environment and one that is consistent with leading financial services providers…”

Based on broader NextGen goals, ED wants the selected BPO contractors to begin scaling operations in parallel with the start of existing customer accounts migration once the Enhanced Processing Solution is fully operational and ready to start migration (no later than six months after award). (emphasis added)

insideARM Perspective

In no particular order, I’ll raise these questions/observations:

Based on my reading of the Solicitation, it sounds like potential solution providers can only bid on this contract if they are able to service the entire lifecycle of student aid. I’m not sure there is any one organization immediately equipped to do that. How will this affect PCAs? Must they scramble to attach themselves to companies that are equipped to service the front half? Would they bid on the contract anyway, making the case that if they’ve done a good job managing defaults, they could do a good job preventing defaults?

There is a lot that is still undefined. The schedule starting on page 11 of the Solicitation refers to requirements that have yet to be established…yet services must begin a mere six months after award.

I gather ED is requiring the aggressive timeline because the Title IV Additional Servicing (TIVAS) contracts end in April 2019 and they have just one 6-month extension available. Sources tell insideARM that FSA will not be negotiating further extentions on the small PCA contracts, so those will likely end this fall as ED expects to quickly transfer 200 million accounts to the new Enhanced Processing solution.

FSA wants the full life cycle of servicing to occur under its own brand. The Debt Collection Improvement Act of 1996, however, requires Federal agencies to “REFER” debts to private collection agencies. PCA then send letters, make calls, etc. These are just a few of the questions that will need to be addressed if collections are performed on the FSA system under the FSA brand:

• Will the PCA debt collection notices state “FSA has placed your account for collections with FSA?”
• Will FSA pay itself a contingency fee? Federal law requires PCAs to be compensated through contingency fees (collections must be budget neutral). Loan servicing is paid for through Congressional appropriation.
• How will FSA address the “bundling” issue – where PCA work is being bundled with servicing; Office of Management and Budget (OMB) Circular A-129 describes two separate regimes for loan servicing and debt collection.
• Bundling loan servicing and default collection services creates an internal conflict of interest for any awardee because there is a natural incentive to shift work to that service which provides the highest compensation structure.

Meanwhile, remember that last September Judge Wheeler permanently enjoined ED from cancelling the Solicitation for unrestricted (large) PCAs. Will this solicitation appear to satisfy the spirit of that Order?   

Another read is that this Solicitation is seeking responders to develop the system/platform and remains silent on the actual collection agencies; At some later point the winners will pick the PCAs and thus move the procurement and oversight away from ED. This would be an interesting way to address ED’s selection and oversight challenge.

We are coming up to Groundhog Day. What happens if the PCA procurement sees it shadow? Six more years?

EDMONTON, Alberta — Metropolitan Credit Adjusters Ltd. (MetCredit) has purchased Affinity Credit Solutions Inc. in a made-in-Alberta acquisition.

MetCredit President and CEO Brian Summerfelt says the acquisition is about growth and timing. “Debt recovery is a specialized business where clients demand highly customized professional service. Adding Affinity expands our service base, depth and offerings while preserving the independence and strengths of each company.” MetCredit is a national debt collection agency with its head office in Edmonton, where it was founded in 1973.

Summerfelt says that while little will change for employees or clients of either company, the few noticeable differences will be very positive. “We’ll start Affinity on MetCares Program. Affinity staff will get to participate in other MetCredit incentives and team-building programs. “They’re part of the Canada-wide MetCredit family now, and it’s going to make us all better.”

Affinity clients will also benefit, Summerfelt says. “Affinity can now tap in to a very sophisticated and experienced IT and support team.” This is significant because of the industry’s ever-increasing demand for data security and privacy. “Because MetCredit has worked with banks, governments and large telecoms for nearly half a century, we are fully configured with the highest level of IT integrity. So Affinity’s level of sophistication moves up by orders of magnitude.”

Summerfelt adds that while the Canadian economy is experiencing its challenges, the companies have distinct client bases and both are in a growth phase. Businesses in Alberta are in heightened need of accounts receivable help in order to sustain positive cash flow through the economic slowdown. 

Affinity Credit Solutions is an Alberta-focused collection agency and will continue to operate independently of MetCredit. The acquisition of Affinity augments MetCredit’s market share in Alberta, in addition to operations in all Canadian provinces and territories through longstanding branch offices in BC, Ontario, and Québec.

Whereas MetCredit specializes in consumer debt collection services for large-scale organizations and government, Affinity has particular expertise in landlord and tenant debt collection and industry-specific commercial accounts. 

Summerfelt says that although new ownership is always a big change, the Affinity team is excited about the transition. “MetCredit and I are well known and respected throughout the collections industry. Everyone is enthusiastic.” He explains he has worked to achieve a smooth transition and a strong relationship with the previous owner, Ryan Corbett. “I want to thank Ryan, and I have no doubt we’re going to do him very proud.”

For more information, please contact Brian Summerfelt, President & CEO of MetCredit at 780-420-2377 or bsummerfelt@metcredit.com.

About Metropolitan Credit Adjusters

Founded in 1973, MetCredit is a leader in Canadian debt recovery and commercial collection. MetCredit is dedicated to providing professional, reliable service characterized by the highest ethical standards of conduct for over 45 years. MetCredit is proud to maintain the debt recovery industry’s highest success rates, with many large-scale client partnerships dating back several decades. With its one-of-a-kind online account submission tool and other proprietary technologies, MetCredit is regarded as a force for innovation on the Canadian accounts receivable management landscape. MetCredit reports delinquent accounts to Transunion, Equifax and Dun & Bradstreet as well as highly specialized regional credit bureaus in Canada.

About Affinity Credit Solutions

Affinity’s founding partners came together in 1996 with extensive industry experience and a unique philosophy. Consistent growth has allowed Affinity to brand those attributes into a recognized benefit for hundreds of Alberta clients and thousands of their customers. Affinity Credit Solutions has always provided reliable third-party collection services, built on a foundation of integrity, respect & performance.

MARIETTA, Ga. —  Chris Zhao, PhD in Mathematics from Princeton University joined Sequium as Vice President of Business Intelligence & Chief Data Officer. Chris brings over 30 years of hands-on IT and leadership experiences in Software engineering, Data Mining, Business Intelligence, and Data Science. Prior to joining Sequium, he had been a Senior Consultant for UPS, Credit Suisse, Thomson Reuters, IPSOS, and Bain Capital, covering multiple business domains and industries. In consumer behavior analytics, Chris developed active index algorithms leveraging integrated consumer and behavioral data, and created tremendous values for his business clients. Chris was also adjunct professor at Rider University and Peking University. He is a graduate of Princeton University with Ph.D. in Mathematics.

“We are thrilled to have Chris as a member of the Sequium Family”, says Greg Schubert, President and CEO at Sequium. “Chris will spearhead our already complex and sophisticated business intelligence units focusing on Business Optimization, Advanced Machine Learning and Segmentation models. The future of this industry is converting data to actionable information to improve performance, efficiencies, and decisions matrices. The addition of Dr. Zhao will take us to a whole new level and we are excited beyond words as to the possibilities.”

About Sequium Asset Solutions, LLC

Headquartered in Marietta GA, Sequium Asset Solutions is the leader in the accounts receivable management industry leveraging sophisticated Business Intelligence, Machine learning, Digital Communications and Human Capital to produce groundbreaking results for its customers. The company is a recognized performance leader within the industry. For more information, please contact Peter Hendricks, Executive Vice President of Sales and Marketing, at 678-228-0003 or email him at peter@sequium.com.

California’s Office of the Attorney General (AG) held yet another public forum to discuss the new Consumer Privacy Act (CCPA) in San Diego on Monday. Below are my observations on several main topics discussed during the forum.

Editor’s Note: This was the second of the six scheduled public forums; a summary of the first forum can be found here.

Definitions and Standards

The key issues at yesterday’s forum centered around definitions in the statute and what information might be scoped within the law’s definitions. Cyber security experts, who made up the majority of the audience, strongly recommended deferring to industry definitions published by the National Institute of Standards and Technology (NIST) in Special Publication 800-122. One of the cyber security consultants brought up that if CCPA’s definitions and standards are vague and inconsistent with NIST standards, an issue arises with general liability insurance carriers about what would and would not be insurable risks. This would create a heyday for litigators and uncertainty about liability.

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Consumer groups like Consumer Watchdog stated that the ARM industry’s view of data sharing, collection and sale today is at best “quaint” and that the broadest possible interpretation is advisable. Consumer groups also want more opportunities for private causes of action to protect consumers in instances where businesses provide disclosures that simply aren’t packaged in a way that consumers’ permissions would truly be considered “knowing.”

Submitting Comments

It is essential to prepare and submit any comments before the end of February. The AG’s office is having court reporters capture the testimony provided at the hearing and will then consider that in addition to the submitted comments. Written comments should be sent to PrivacyRegulations@doj.ca.gov or mailed to:

CA-DOJ
ATTN: Privacy Regulations Coordinator
300 Spring Street
Los Angeles, CA 90013

At this time, the AG’s office will neither comment nor respond to input from the public. After February, the AG’s office will craft a notice of proposed rulemaking – expected by or in September and thereafter will hold televised public hearings. Following this, a final notice of rulemaking would occur. There was no discussion of phasing in enforcement dates, go live dates, or whether model or safe harbor disclosures would be offered.

Preemption

The ARM industry has an opportunity to make a case for showing that compliance with particular laws such as FCRA, GLBA and HIPAA — specifically cited in CCPA — already define guardrails for the collection and use of consumers’ data, possibly justifying an exemption for the industry under CCPA. This seems to be a critical opportunity for industry.

Working with the AG’s Office

The two deputy AGs spearheading the work on CCPA indicated they welcome input from industry groups that have interacted with consumer groups, particularly if it indicates some understanding of key areas of agreement and key areas of difference.

Forum’s Participants

Roughly 100 people were present, the majority of which were cyber security professionals. No other ARM industry professional was present.

Potential Legislation in Other States

It is clear that there is considerable activity in various state legislatures about similar privacy legislation for the coming year in response to the Cambridge Analytica situation. Other key states to watch include (but are not limited to): Oregon, Washington, Massachusetts, Maryland, New Mexico, New York, Florida, and Nevada.

Stay tuned — the next open forum is on Thursday, January 24, at the Cesar Chavez Community Center in Riverside, Calif.

NORTH ANDOVER, Mass. — F.H. Cann & Associates, Inc., an industry leader in delivery of best-in-class recovery solutions, is pleased to announce the opening of its newest operations office in Sharonville, Ohio.  The expansion, a result of continued company growth, will be the first outside of its Massachusetts headquarters and will be open later this month. The new location will offer state of the art technology including telephony and training facilities.  Expansion into Sharonville, Ohio also represents the addition of over 100 new positions for the organization.

“Words cannot express our level of excitement over our continued growth and to see the expansion of the organization into a new market,” stated Frank H. Cann, Co-founder and Chief Operating Officer.  “Sharonville provides FHC with access to a favorable workforce and we are looking forward to becoming one of Sharonville’s newest corporate citizens.”

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About F.H. Cann & Associates

Established in 1999, FHC is a certified woman-owned full-service accounts receivable management company, specializing in higher education collections, serving colleges, universities, guarantors, and the U.S. Department of Education.

BOISE, Idaho — Revenly, the leading multi-channel CollecTech platform, today announced the expansion of operations in Boise, Idaho as the company continues its rapid growth in the Account Receivable Management (ARM) industry.

Previously marketed under Swipebox as a merchant service provider, Revenly released a mobile-first, customer-centric SaaS platform in 2018 that enables debtors to make payments from any device at any time.

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“People want an easy way to pay their bills without complex, frustrating, human interaction. Our system gives agencies an easy-to-use, creditor-approved solution that has the power to automate over 50% of their paying accounts every month,” said CEO Joshua Allen at Revenly. “It’s a one-stop, consumer-powered solution that puts the payor on track to pay their debt faster and easier than any other system in the ARM industry.”

The platform has already shown potential to revolutionize the industry with adoption, conversion and retention rates that have been previously unseen in the ARM industry.

“With Revenly, debtors considered ‘unreachable’ are not only paying their debts down, but they are coming back week after week on their own and self-managing every aspect of their account within the rules the agency sets up for them,” said Allen.

Revenly’s move to Boise, Idaho will allow the company to work closer with its development and design team, along with tech veteran Jonathan Cardella, the company’s Chief Strategy Officer. Jonathan, who began working with Revenly in 2017, will lead the strategic direction and partnership development, go-to-market, and product design and development.

To learn more about the Revenly SaaS platform please contact GetRevenly@revenly.io, visit  www.revenly.io or call (208) 639-9980 to request a demo.

About Revenly

Revenly is an easy-to-use, creditor-approved SaaS solution, enabling people to effortlessly make debt payments from any device, anytime, anywhere. With a payor adoption rate of over 90%, Revenly is a revolutionary system, unmatched in the account receivable management industry.

Looks like the question of whether the Consumer Financial Protection Bureau’s (CFPB) structure is constitutional will be fought, if at all, on another day. On Monday, the U.S. Supreme Court denied the petition for writ of certiorari — in other words, a request for the Supreme Court to hear the case — in State National Bank of Big Spring, et al. v. Steven Mnuchin, et al.

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As a brief refresher, the case presented two main constitutional questions regarding the structure of the CFPB:

1. Whether an independent agency having a single director that is only removable by the President for cause and exempted from Congress’ power of the purse is constitutional; and
2. Whether Congress was permitted “to create perpetual, on-demand funding streams for executive agencies that are unreviewably drawn from the coffers of other independent agencies.”

Justice Brett Kavanaugh, the newest member of the Supreme Court bench, did not participate in the vote. This is likely because he wrote the opinion for this case as well the dissenting opinion in the PHH v. CFPB case while he was still on the D.C. Circuit Court of Appeals bench prior to his Supreme Court appointment.

Four justices need to agree in order to hear a case, so the State National Bank case fell short of this.

insideARM Perspective

John Rossman, shareholder at Moss & Barnett and chair of the firm’s creditor’s remedies and bankruptcy practice group, shared the following insight with insideARM:

There are a variety of factors that weigh into the decision of the U.S Supreme Court granting or denying a petition for certiorari. In the State National Bank case, there were valid questions about whether Justice Kavanaugh would recuse himself due to his participation in the decision from the D.C. Circuit on this case where he authored the opinion. While the landscape at the CFPB has changed dramatically over the past few years – including the previous director, who was a Presidential recess appointment, stepping down and the new director obtaining Congressional approval – concerns about the constitutionality of this single director federal agency, and its funding mechanism, remain and need to be resolved. I expect a future challenge to the constitutionality of the CFPB may fare differently in a petition for cert to the U.S. Supreme Court.   

This follow-on request for the Supreme Court to hear the issue again may not be that far off. There is another case — Consumer Financial Protection Bureau v. RD Legal Funding LLC, et al. — percolating its way through the Second Circuit Court of Appeals. Depending on how far the parties in that case choose to go, the Supreme Court might see yet another petition for writ of certiorari on this very issue at at its front steps soon.