Archives for October 2022

The CFPB, in a notice published in the Federal Register on September 27, 2022, announced that it was rescinding its No-Action Letter and Compliance Assistance Sandbox policies (Policies).  The rescission was effective on September 30, 2022.

In the notice, the CFPB stated, “The CFPB determined that the Policies do not advance their stated objective of facilitation consumer-beneficial innovation.  The CFPB also determined that the existing Policies failed to meet appropriate standards for transparency and stakeholder participation.  The CFPB is developing new approaches to facilitate the development of new products and services.”

The CFPB’s rescission of the Policies is not surprising.  The Federal Register notice follows the CFPB’s announcement in a May 2022 blog post that as part of a new approach to innovation in consumer finance, it was replacing its Office of Innovation and Operation Catalyst with a new office, the Office of Competition and Innovation.  In the blog post, the CFPB called the Policies “ineffective.”  Despite the clear implication that the Policies were being eliminated at that time, a CFPB spokesperson indicated that the CFPB had not yet rescinded the Policies and was continuing to take new applications and processing previously submitted applications under the Policies.

The CFPB stated in the notice that it will continue to accept and process requests under its Trial Disclosure Policy and that entities that have made submissions under the rescinded Policies will be notified if the CFPB intends to take additional steps on such submissions.  The notice does not address the status of no-action letters or sandbox approvals previously issued under the Policies.  Law360 has reported that it received a statement from a CFPB spokesperson indicating that the notice does not extinguish previously approved and currently active letters and approvals.

Hi all, Chris Deatherage here, the newly-deemed Duke of the TCPAWorld. A lot of you folks know me from the industry, but don’t worry I’m not going to bore you with my background or life story. Instead, I’m going to bore you with the following disclaimer:

This is NOT legal advice and does NOT establish an attorney-client relationship between you, me, or the Troutman Firm. The following is only my opinion on the subject matter discussed.

Now that the disclaimer is out of the way, I bet you’re asking yourself why you should bother reading this post. The answer to that is simple. I’m about to discuss everyone’s favorite 15 letter word, indemnification. Have I piqued your interest? Well, hopefully by the end of this post I’ll have convinced you that an indemnification clause is both a vital contractual provision and worthless garbage… I swear those aren’t contradictory statements. Just stick with me as we briefly explore the struggle between contractual provisions trying to account for hypothetical situations and the harsh realities of the business world. By the end I promise it will make more sense.

First, let’s talk about why indemnification clauses are vital and necessary contract provisions, especially in TCPAWorld. So, what is an indemnification clause anyway? That’s a complicated question because they come in many forms, but at their core indemnification clauses are essentially one entity telling another “Hey, if I screw up and damage you, I’ve got your back.”

In a place like TCPAWorld, where your vendors and affiliates can expose you to bankruptcy levels of damages, it’s easy to see why having an indemnification clause in your contract is not just important but necessary. The clause is an effective tool to potentially mitigate damages you may face as a result of the actions of others. An effective indemnification clause should theoretically prevent arguments and finger pointing between the contracted parties by making it clear under what circumstances indemnification obligations are triggered and the duties of the indemnifying party.

You notice how I used words like “potentially” and “theoretically” in the previous paragraph? That’s because indemnification clauses, like many contract provisions, are just an agreement between two parties to act in a certain way after a hypothetical scenario. There is no guarantee the clause will actually work. Why is that? Let’s talk about some harsh realities:

Harsh reality #1: an indemnification clause is only between you and the other contracted party. If you’re being sued, the judge, the plaintiff, and the jury do NOT care if you have an indemnification clause in your agreement. Your indemnification clause is totally irrelevant to the plaintiff’s claims because they aren’t a party to your contract.

Harsh reality #2: your indemnification clause is only as good as the indemnifying party. If the indemnifying party exposes you to $100 million in damages but operates out of their mother’s basement and only has $10,000 to their name, how are they going to indemnify you? What if the indemnifying party refuses to indemnify you? Sure, you can sue them to enforce the indemnification, but how much will that cost and how long will it take? Meanwhile you’re still facing down a $100 million judgment.

Harsh reality #3: there are some things that you can’t be indemnified for. For instance, if a regulator shuts you down and forbids you from ever operating again in the industry, how can you be indemnified for that?

Those are some scary scenarios, the stuff of nightmares really, but they can happen. In any of the above three scenarios an indemnification clause is rendered worthless.

Now let’s circle back around. Remember how I swore it’s not contradictory to say indemnification clauses are both vital and worthless? That’s because the clause is an incredibly effective tool when the indemnifying party is trustworthy and capable of indemnifying. It’s worthless when the indemnifying party is unreliable or incapable of indemnifying. So, what are you to do? It’s not always possible or practical to know when another party is trustworthy or of means. Thankfully, the answer to that is also simple. You just have to remember the following:

An indemnification clause is NOT A SUBSITUTE for proper vetting and monitoring of parties you’re contracting with.

To help illustrate this point, let’s use a movie almost no one remembers. Imagine an asteroid (TCPA class action) is heading towards Earth (you). Proper compliance policies that involve not just vetting incoming partners but also monitoring existing partners are like setting up an array of high-power telescopes. These effective and efficient tools will allow you to see the asteroid coming well in advance so that you can take corrective action and avoid a catastrophic impact. In contrast, an indemnification clause is like a hail Mary. The asteroid caught you off guard, impact is imminent, and your only remaining option is to call Bruce Willis. Hopefully Bruce can plant the bomb and pull this off because otherwise you’re screwed.

Well, that’s it for my post on indemnification. I hope you all have a better idea of what role indemnification clauses may have in your contracting and risk management strategy. Remember, this is all my opinion and should not be construed as legal advice. If you have questions, I’m sure the Czar would love to talk. Until next time TCPAWorld.

On September 26, Representative French Hill (R-AR) introduced new legislation, H.R. 8985, also known as the Credit Access and Inclusion Act of 2022, to amend the Fair Credit Reporting Act and allow payment information for utility bills and phone payments to be furnished to credit reporting agencies to help consumers raise their credit scores. This is an effort to address an issue highlighted by the CFPB Office of Research that estimated 26 million Americans are “credit invisible,” meaning they do not have a credit history with any of the three national credit reporting agencies.

In a press release, Representative Hill harkened back to his roots to explain the need for the proposed legislation. “As a former community banker, I understand how access to credit can open doors to opportunities like homeownership, yet too many central Arkansans are denied affordable credit opportunities because they don’t have a traditional credit payment history. My bill levels the playing field by allowing for additional data, such as utility and phone payments, to be reported to determine credit worthiness so that millions of hardworking Americans get credit for bills they are already paying.”

H.R. 8985 has been referred to the House Committee on Financial Services for consideration. A companion bill, S.2417, has been introduced in the Senate by Senator Tim Scott (R-SC) and Senator Joe Manchin (D-WV).

The Mortgage Bankers Association indicated its support for the bill, stating: “MBA applauds Representative French Hill for the introduction of the Credit Access and Inclusion Act which would promote the use of rental, utility, and telecommunications data to supplement traditional data provided to consumer reporting agencies. Underserved borrowers often have less experience using traditional financial products, creating barriers to entry for many consumers during the home purchase application process. The responsible utilization of alternative data, such as rental, utility, and telecommunications payment histories, will help safely expand access to credit to underserved borrowers.” The bill is also supported by the U.S. Chamber of Commerce, National Association of REALTORS, and The National Association of Hispanic Real Estate Professionals.

We will continue to track H.R. 8985 as it moves through the legislative process.

For a lot of lenders, especially newer fintechs, who have spent the last two years originating loans and lines of credit, the obvious collections strategy solution to the challenge of an influx of charged-off or delinquent accounts is to use third-party collections agencies to handle delinquent and charged-off accounts.

How you vet those vendors and how you manage those vendor relationships will make or break your collections strategy. Proper management of those third-party collections vendors is critical to a successful recovery strategy, and it mitigates the risks associated with collecting on consumer debt.

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Consumers are leveraging credit and loans at record levels, and you might not be prepared for the record increase in originations leading to a major increase in delinquent and charged-off accounts. Plus, consumers are still facing challenges like lingering inflation and economic uncertainty, and the CFPB has been extremely active and vocal about debt collection regulation, which makes collecting delinquent and charged-off accounts risky.

Bringing in a third-party vendor can help solve some challenges, but don’t forget that outsourcing your collections doesn’t necessarily reduce your risk.

Outsourcing work to a service provider with dubious practices could invite a supervisory review, which could lead to serious reputational, if not financial and legal, damage if enforcement action is taken. The CFPB plans to use its supervisory authority to examine any nonbank financial company that poses a risk to consumers, so it is imperative that companies who previously believed they were not subject to the oversight of the CFPB start preparing now.

Read on to find out how to improve (or build) a robust vendor management program:

What potential collections vendor warning signs should you look for before you sign the contract?

Finding a good vendor can be a real challenge, especially for newer collections & recovery departments. Be on the lookout for these early red flags from your potential vendor partners:

1. Inauthenticity. Honesty is key when it comes to maintaining a good relationship with your vendors, and the longer you can maintain those relationships, the easier your job will be. If your potential vendor starts their conversations with a sales pitch before even getting to know you, that’s a red flag.

2. Lack of Research. Just like at any job interview, you want the candidate to show that they’ve done their homework. Especially today, when it’s incredibly easy to reach out via LinkedIn with mass sales templates, you’ll want to stick with vendors who know what problems you’re trying to solve, and who are intentional in the way they reach out to you.

3. They’re too eager. No one wants to be bombarded with sales emails. If you’ve made it clear to the sales team at a potential vendor that you’re not quite ready to discuss a partnership, but they keep reaching out, that’s a red flag.

4. Lack of Preparation. Your vendor should have subject matter experts on your discovery calls, since it’s likely the salesperson doesn’t have all the industry knowledge you need. If your discovery calls don’t include the right people from their team, it’s the sign of a potentially rocky relationship down the road.

Which key questions should you ask potential third-party agency partners?

You can mitigate a lot of risk if you are picky when choosing your partners. Regulators expect proper due diligence before you select a partner.

Make sure to get good answers to the following 5 questions when vetting prospective partners:

1. What type of experience do they have working with the type of account that is being outsourced?

2. How familiar are they with the laws that regulate the particular type of debt they will be working with?

3. How well-documented are their policies and procedures?

4. How well is their staff trained?

5. What types of controls are in place to ensure they are compliant with and continue to comply with not just the laws and regulations, but with our contractual obligations?

For more, read Looking for a New Vendor? These 4 Red Flags Should Stop You in Your Tracks and Creditors: Can You Outsource Risk by Outsourcing Collections? Not Anymore.

How to manage your vendor / partner relationship for success

It can be tough to strike a good vendor management balance. Creditors who are too prescriptive can damage their relationships with vendors. Those who are not prescriptive enough can find themselves at risk for regulatory or reputational damage. But maintaining good relationships with your third-party vendors is key to a successful collections & recovery strategy. Here are four best practices for managing those vendors once they’re on board:

1. Communicate expectations. Don’t just hand over your MSA/SOW/SLA and expect your agency vendors to abide by your terms. Collections & recovery executives should work with their vendors to create those work documents, and collections & recovery vendors should be able to understand performance and compliance expectations – and whether or not they’re meeting those expectations – at a glance.

2. Use their expertise. There’s a reason you’re seeking a third-party agency vendor: you need their expertise. It’s a mistake to approach the relationship like you “know it all.”

3. Connect the experts. Connecting business units and SMEs can help you make sure that nothing is lost in translation. Some problems can only be solved by communication between the affected business units.

4. Get back to on-site visits and audits. After more than two years of a global pandemic and a major shift to remote work, many companies have fallen out of the habit. But, on-site audits allow you to gauge your agency’s preparedness in a way remote audits do not.

For more details about vendor management best practices, check out 4 Vendor Management Best Practices for Collections and Recovery.

How to plan for successful third-party agency audits

Once you’ve set those expectations, it’s time to audit your third-party agency thoroughly to ensure those expectations are being met. Audit frequency will vary, but you need to plan to be on-site for an audit at least yearly, and remember: audits don’t have to be adversarial. Both parties should go into an audit with open minds. Your vendor’s success is your success, so here are three ways collections & recovery vendors can support their partners in advance of an audit:

1. Provide a specific agenda and checklist based on your contract. All of your expectations should be laid out in a manner that allows a quick, efficient audit.

2. Give your vendor partner adequate time to prepare. Sending out the agenda and expectations with only a few days’ or a week’s notice is a recipe for disaster. Your vendor partner needs time to get all of their documentation together. And since many companies are allowing remote or hybrid work schedules, they may need time to get the correct staff scheduled for your visit. Each contract should specify how much notification is required prior to an audit based on the vendor’s risk calculation.

3. Highlight new policies and regulations. Call out anything that is new since your last vendor audit to give your partner ample time to gather evidence that they are applying those policies in their operations. 

If you’ve provided adequate support, the audit should go smoothly. If they don’t, that could be a warning sign. Here are two MAJOR major audit warning signs that you may need a new vendor partner: 

1. They’re disorganized.  Being organized and prepared doesn’t guarantee that they are following your policies and procedures as part of their normal operations, but it’s a good sign. Conversely, if your partner is disorganized during the audit, it might signal deeper problems. Consider a deeper look into their operations.

2. You’re surprised by a finding. Your pre-audit agenda and checklist should be enough for your vendor partner to discover any weaknesses or potential findings before the audit. They should alert you to them as soon as possible, which also sets aside time for remediation. 

Bonus material: 

4 Best Practices to Optimize Collections & Recovery Vendor Audits.

You can also hear from experts at vendor management in our three part on-demand webinar series, The Vendor Management Masterclass. 

The Vendor Management Masterclass I

The Vendor Management Masterclass II

The Vendor Management Masterclass III

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MANASQUAN, N.J. and SAN DIEGO, Calif. — Connect1, Business Consultants specializing in accounts receivable, technology, customer care and call center management, is proud to announce that, effective October 1,2022, all broker services will be powered by Debtfolio! The entire sales process can now be managed from start to finish with powerful software that creates consistent and easy file mapping, an audited and controlled bidding process, document retention and retrieval, chain of title, and de-duplication processes all in one platform.

Debtfolio was built with security and scalability on the latest cloud technologies from AWS. Designed for growth, the system seamlessly manages any volume of records, documents, and media, allowing customers to focus on their business instead of system and processing issues. Debtfolio is HIPAA-ready and conforms to stringent CIS and AWS security standards. Proactive controls, monitoring and alerting ensure customers’ data is continually protected. All data is encrypted in flight and at rest using AES-256 encryption standards.

Connect1 has more than 65 years of combined industry experience in BPO, collections and recovery management, debt portfolio sales, capital raise, analytics, fraud prevention, data security, technology, compliance. Working with Fortune 500 companies across several verticals including financial, healthcare, communications, cable, and retail has given them a broad view of the best practices and products for each sector.

“Debtfolio is a game changer in the sale of portfolios and is a complement to all the other services Connect1 has to offer”, say partners, Bob & Nancy

Connect 1 is currently seeking interested companies to preview and implement Debtfolio.

Please contact Bob Picone Rpicone@connect1consultants.com mobile 732-600-6265 or Nancy Hughes Nhughes@connect1consultants.com mobile 858-877-0551 to learn more!

Providing a consumer multiple settlement options in one letter is not misleading or deceptive- even where one offer is featured more prominently than the other. Further, according to New Jersey District Court Judge Esther Salas, when reviewing multiple offers, the “least sophisticated debtor is expected to perform simple math.”

In Shoulars v. Halsted Financial Services, LLC (Case No: 21-16560, Dist. Ct. NJ), Halsted sent the consumer an initial demand letter which included a text box in the top right corner stating, “40% off your balance.” After identifying the creditor, the letter offered to settle for a lump sum payment. The amount listed in that offer was a 40% discount on the balance. The following line of the letter stated in the event the consumer “cannot take advantage of the above offer” Halsted would accept a settlement payable in monthly installments. The amount listed in the second offer was a 20% reduction. The standard disclosures were listed directly below the settlement offers.

The consumer filed a class action lawsuit alleging the letter overshadowed and contradicted the validation period and was false, deceptive, and misleading, thus violating Fair Debt Collection Practices Act (FDCPA). Halsted contended the letter complied with the FDCPA and moved to dismiss the suit.  

In its September 12, 2022 opinion, the court found that the offers did not overshadow or contradict the validation notice because the disclosures were on the front page, were the same size and font as the rest of the letter, and did not suggest the consumer had to pay her debt before the end of the validation period. The multiple offers did not violate the FDCPA because the second, less discounted, offer explicitly stated that it was an alternative if the consumer was unable to take advantage of the first offer. By performing basic math, the consumer should have been able to determine the monthly installment settlement offer was less of a discount than the lump sum payment settlement offer; thus there was nothing misleading about it. 

Regarding the opinion, Halsteads’ General Counsel Brian Glass remarked, “Of course, we are extremely pleased with the result obtained by Peter Siachos and Stephanie Imbornone of Gordon, Rees, Scully and Mansukhani.  Judge Salas dismissed this case with prejudice and reasoned that there was no need to allow the Plaintiff a second chance to amend its complaint if it would be futile, because the claims were based entirely on a singular letter.  All our letters are vetted in a multi-faceted approach, by industry professionals, to ensure compliance with Regulation F, the FDCPA, as well as state and local regulations.  The Court’s decision bolsters Halsted’s commitment to compliance, and helping consumers navigate the repayment of their debts in a fair and ethical manner.”

Read the full opinion here.

insideARM’s Perspective

While this is certainly a nice win for the industry, it is important to note that this case involved a pre-Regulation F initial demand, and it is a district court opinion with potentially limited reach. In other words, while it is undoubtedly a valuable case for the industry, operations professionals can still expect their compliance colleagues to analyze changes to initial demand notices. That said, the reasoning provided by Judge Salas brings some common sense to the “least sophisticated consumer” standard and makes clear that even the least sophisticated consumer cannot ignore the plain meaning of words on the page. 

Chesapeake, VA. — Spring Oaks Capital, LLC has hired Mike Ohmsen as Department Manager. Mike will report to Director of Operations, Tim Rees.

Mike joins Spring Oaks from TTEC, Inc. Government Solutions where he was the Executive Director for Electronic Tolling. During his tenure there, Mike drove superior results in performance achievement for 4 major state and metropolitan customer service center 

operations. Mike has 30 years of operations management experience in Financial Services. He has held leadership roles including General Manager for AOL servicing at Liberty Source, and Vice President at Bank of America Default Servicing Complaint Resolution, Office of the President. Mike was recently featured in the 100 People to Meet in 2022 for Virginia Business Magazine.

Tim Rees, Director of Operations, stated, “We are excited to add Mike to the Spring Oaks Capital management team. He brings a tremendous amount of leadership, knowledge, and industry experience that will support our continued growth. Mike’s mind is keenly attuned to process improvement and root cause analysis which adds a critical dimension to our growing and complex team. I look forward to his contributions making us more effective and efficient by refining, polishing, and streamlining our operations model.”

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Mike stated, “I am excited to join the family here at Spring Oaks Capital. With my years of experience in customer service and Financial Services, joining a dynamic platform like Spring Oaks is a tremendous opportunity to work with a highly talented management team while sharing my diverse experience.”

About Spring Oaks Capital, LLC

Spring Oaks Capital is a national financial technology company, focused on the acquisition of credit portfolios. The Company subscribes to an employee and consumer-centric operating philosophy that creates high-value jobs, a significant performance lift, and the highest standards of compliance. Spring Oaks’ business strategy is rooted in innovative data-driven technology to maximize collection results and a contact platform that offers multi-channel options to meet each consumer’s communication preference. Spring Oaks has the management vision and experience to nurture a culture and DNA that is unique in the space. The executive team maintains deep experience end-to-end across the consumer finance lifecycle with some of the largest global banks and innovative FinTech platforms. To learn more about Spring Oaks and our revolutionary FinTech platform, please visit www.springoakscapital.com.

BIRMINGHAM, Ala.– ARM Compliance Business Solutions is excited to announce that Rick Paulin has joined the company as a Learning & Development Advisor. In this role, Rick will support ARM Compliance Business Solutions clients through building robust and effective role-based training programs through live and online platforms.  

Rick joins the company with over 30 years of industry experience in both first-party and third-party account receivable management. Prior to joining ARM Compliance Business Solutions, Rick was the Head of Compliance Training for InDebted, a fintech company based in NSW, Australia. 

While Rick was Director of Training for Windham Professionals, Training magazine presented Training Top 125 international awards to his team and the company in 2018, 2019, and again in 2020, for “unsurpassed harnessing of human capital”. 

Rick has also served as Director of Training and Development for Outsourcing Solutions, Inc. and their 9,000 employees in fifty-six offices. In this role, Rick spearheaded the development and national deployment of their Performance Management Program which included certification of operations leaders nationwide. After an initial onsite role launching a BPO operation in India in 2002, Rick pursued a full-time position offshore to gain global perspective and experience. Rick landed as VP of Training and Quality for Zenta Pvt., Ltd. in Mumbai, India, where he led the training team and raised client CSAT scores to levels resulting in awards of increased market share for key clients.

“The addition of Rick’s role is an exciting one for ARM Compliance Business Solutions,” said Sara Woggerman, President of ARM Compliance Business Solutions. “Training has always been a part of our service offerings at ARM Compliance Business Solutions, but it was primarily focused on compliance training for board of director and executive leadership. The expertise Rick brings to the table will enhance this service offering to include all departments and subjects from compliance to performance.”  

“When you meet a professional whose individual core values align with your own, it generates a wonderful excitement and energy,” said Rick Paulin. “Couple that with Sara’s experience, expertise, and credibility within our industry, makes for a relationship that I am so thankful for and mission I am proud to have a role in! I am thrilled to be part of ARM Compliance Business Solutions’ expanding reach and service offerings!” 

About ARM Compliance Business Solutions, LLC. 

ARM Compliance Business Solutions, LLC. was formed in 2020 to provide professional advisory services to the accounts receivables management industry through its delivery of compliance risk assessments, outsourced compliance services, service provider oversight and role-based training. ARM Compliance Business Solutions in a recognized leader in compliance and operational strategies to improve the consumer experience and enhance business practices for their clients. For more information, visit www.armcbs.com or contact Sara Woggerman at sara@armcbs.com. 

The U.S. Chamber of Commerce, joined by six other trade groups, filed a lawsuit yesterday in a Texas federal district court against the CFPB challenging the CFPB’s recent update to the Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) section of its examination manual to include discrimination.  The other plaintiffs are American Bankers Association, Consumer Bankers Association, Independent Bankers Association of Texas, Longview Chamber of Commerce, Texas Association of Business, and Texas Bankers Association. 

In July 2022, the Chamber, together with American Bankers Association, Consumer Bankers Association, and Independent Community Bankers of America, sent a letter to Director Chopra calling on the CFPB to rescind the update.  The letter was accompanied by a white paper setting forth the legal basis for their position. 

The plaintiffs claim that the manual update should be set aside because it violates the Administrative Procedure Act (APA)  for the following reasons:

• The update exceeds the CFPB’s statutory authority in the Dodd-Frank Act.  The CFPB cannot regulate discrimination under its UDAAP authority because Congress did not give the CFPB authority to enforce anti-discrimination principles except in specific circumstances.  The CFPB’s statutory authorities consistently treat “unfairness” and “discrimination” as distinct concepts.  (To demonstrate the compliance burdens resulting from the update, the plaintiffs allege that the CFPB has provided no guidance for regulated entities on what might constitute unfair discrimination or actionable disparate impacts for purposes of UDAAP. As examples of issues creating confusion, the plaintiffs allege that the CFPB has not identified what are protected classes or characteristics or what activities are not discrimination (such as those identified in the ECOA), and has not explained how regulated entities should conduct the sorts of assessments that the CFPB appears to be contemplating given existing prohibitions  on the collection of customer demographic information.)

• The update is “arbitrary and capricious” because the CFPB’s interpretation of “unfairness” contradicts the historical use and understanding of the term. The plaintiffs allege that the FTC’s unfairness authority does not extend to discrimination and that Congress borrowed the FTC Act’s unfairness definition for purposes of defining the CFPB’s UDAAP authority.  They also allege that the CFPB’s contemplated use of disparate impact liability when pursuing UDAAP claims flouts congressional intent and U.S. Supreme Court authority.

• The update violates the APA’s notice-and-comment requirement because it is a legislative rule that imposes new substantive obligations on regulated entities.

In addition to claiming that the manual update should be set aside due to the alleged APA violations, the plaintiffs allege that the update should be set aside because the CFPB’s funding structure violates the Appropriations Clause of the U.S. Constitution.  (Pursuant to Dodd-Frank, the CFPB receives its funding through requests made by the CFPB Director to the Federal Reserve, subject to a cap equal to 12% of the Federal Reserve’s budget, rather than through the Congressional appropriations process.)  As support for their unconstitutionality claim, the plaintiffs cite the concurring opinion of Judge Edith Jones in the Fifth Circuit’s en banc May 2022 decision in All American Check Cashing in which Judge Jones concluded that the CFPB’s funding mechanism is unconstitutional.  

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Although the en banc Fifth Circuit did not reach the funding argument, a Fifth Circuit panel is expected to consider that issue in the CFSA lawsuit which challenges the payment provisions in the CFPB’s 2017 final payday/auto title/high-rate installment loan rule.  The trade groups have appealed from the district court’s final judgment granting the CFPB’s summary judgment motion and staying the compliance date for the payment provisions.  On May 9, 2022, a Fifth Circuit panel heard oral argument in the CFSA lawsuit. 

The trade groups’ primary argument on appeal continues to be that the 2017 Rule was void ab initio because the CFPA’s unconstitutional removal restriction means that the Bureau did not have the authority to promulgate the 2017 Rule.  However, the trade groups submitted the concurring opinion in All American Check Cashing as supplemental authority to the Fifth Circuit panel hearing their appeal and have argued that the panel should adopt the reasoning of the concurring opinion and invalidate the 2017 Rule.

The unconstitutionality of the CFPB’s funding structure has also been raised by Populus Financial Group, Inc. in the lawsuit filed by the CFPB in July 2022 against Populus in a Texas federal district court.  Populus has filed a motion to dismiss in which it argues that the CFPB’s enforcement action is invalid because the CFPB’s funding structure violates the separation-of-powers principle embodied in the Appropriations Clause of the U.S. Constitution.

DALLAS, TX — Recently at the Millennium SACCO  2022 Business Breakfast Meeting in Kampala Uganda, Joe Adams, Chief Executive Officer and President of the Hampton Pryor Group, Inc. (HPG) announced the  global expansion of the company by establishing offices in Nairobi, Kenya and Kampala, Uganda. The meeting was attended by H.E. Jessica Alupo, Vice President of Uganda.

“By establishing Hampton Pryor Group International Ltd. and opening offices in these East African Countries (EAC), we are able to offer our current and prospective partners in the United States the opportunities to take advantage of the extremely cost efficient collections, recovery and BPO services across the  continent. Through us, American mortgage servicers, purchasers and collections agencies that currently or are thinking about subcontracting collections or BPO to agencies on the African continent, will be able to determine and ensure compliance with service level and regulatory obligations.”

With 54 countries and a population of over 1 billion people including a flourishing middle class, diversification of industries, and adoption of transformational technologies there is no denying the growth opportunities that abound on the African continent. Companies who want to be a part of and benefit from this massive transformation must act now.  Joe Adams adds, “We are being extremely strategic and measured in our expansion. We will only choose additional office locations on the continent that offer  an  all-around benefit to our clients.”

In addition to adding 3 African financial institutions to their client roster, HPG has  established a strategic partnership with Afronlynx IT Solutions, a top South African IT and software development company that currently has an international client base.

About the Hampton Pryor Group

Founded in 2003, Hampton Pryor Group is a worldwide advisory leader in accounts receivable management operations and compliance. The company offers a wide range of products and services designed to assist mortgage servicers, credit grantors, debt purchasers and collections agencies.

About  Afrolynx IT Solutions

Afrolynx IT Solutions is an independent software development company that was founded in Johannesburg, South Africa in 2009. Our multi-disciplinary team of software engineers, analysts and designers have developed solutions for clients the Financial, Mining and Agriculture industries as well as Government and Non-Profit sectors. We have served businesses operating in Uganda, Zambia, Namibia, Botswana, and South Africa. Services include Bespoke software development, systems integration, database design and implementation, Web and mobile applications, and IT advisory.