The CFPB has released its Fall 2023 rulemaking agenda as part of the Fall 2023 Unified Agenda of Federal Regulatory and Deregulatory Actions.  The agenda’s preamble indicates that “[t]he Bureau reasonably anticipates having the regulatory matters identified [in the agenda] under consideration during the period from November 2023 to October 2024.”

Most notably, the new agenda indicates that the CFPB is expecting to release three major rulemaking items this month: a final rule on credit card late fees and proposed rules on overdraft and non-sufficient funds (NSF) fees.  (Although the agenda includes an estimated December 2024 date for issuance of a final rule on credit card late fees, in his recent testimony to Congress, Director Chopra stated that the final rule would be issued in January 2024.)  In May 2023, the CFPB proposed significant amendments to the Regulation Z rules on credit card late fees, including substantially reducing the safe harbor late fee amounts that card issuers can charge and eliminating annual inflation adjustments.  

The CFPB has acknowledged in recent reports and elsewhere that as a result of changes made by many banks to their overdraft and NSF fee practices, revenues from those fees have substantially declined.  Nevertheless, the CFPB apparently has decided to proceed with rulemaking.  (Although the agenda suggests that the overdraft fee rulemaking will be limited to the  question of when an overdraft fee constitutes a finance charge under the Truth in Lending Act and Regulation Z, many observers believe that the proposed rule will be much broader in scope.) 

The other ongoing rulemakings listed in the agenda are:

• Registry of nonbanks subject to certain enforcement orders.  In December 2022, the CFPB issued a proposed rule that would require certain “covered nonbanks” to register with and submit information to the CFPB when they become subject to certain orders from local, state, or federal agencies and courts involving violations of certain consumer protection laws.  The Bureau gives a March 2024 estimate for issuance of a final rule.

• Registry of nonbanks regarding standard form contract terms and conditions.  In January 2023, the CFPB issued a proposed rule to establish a system for the registration of nonbanks subject to CFPB supervision that use “certain terms or conditions that seek to waive consumer rights or other legal protections or limit the ability of consumers to enforce their rights,” with arbitration provisions among the terms that would trigger registration.  The Bureau gives a March 2024 estimate for issuance of a final rule.

• Larger participants in consumer payments market.  In November 2023, the CFPB issued a proposed rule to supervise nonbank companies that qualify as larger participants in a market for “general-use digital consumer payment applications.”  It would cover providers of consumer financial products and services that are commonly referred to as “digital wallets,” “payment apps,” “funds transfer apps,” and “person-to-person or P2P payment apps.”  The Bureau does not give an estimated date for further action.

• Personal Financial Data Rights.  In October 2023, the CFPB issued a proposed rule to implement Section 1033 of Dodd-Frank which addresses consumers’ rights to access information about their financial accounts.  The agenda indicates that the comment period ends on December 29, 2023, which is the last day of the 60-day comment period.  Fifteen trade groups wrote to the CFPB on October 27 to ask for a 30-day extension of the comment period.  The Bureau does not give an estimated date for further action.

• Fair Credit Reporting Act.  The agenda states that the Bureau is considering whether to amend Regulation V (which implements portions of the FCRA).  In September 2023, the CFPB announced that it waslaunching a FCRA rulemaking and issued an outline of the proposals it is considering in preparation for convening a Small Business Advisory Review Panel.  A group of consumer financial industry trade groups recently sent a letter to Director Chopra urging the CFPB to issue an Advanced Notice of Proposed Rulemaking before it publishes a Notice of Proposed Rulemaking.  In the agenda, the Bureau designates the rulemaking to be in the “prerule stage” and estimates pre-rule activity in December 2023 but does not indicate that a SBREFA outline was issued.

• Amendments to FIRREA Concerning Automated Valuation Models.  In June 2023, the Bureau, together with the federal banking agencies and the FHFA, issued a proposed rule on automated valuation models.  The Bureau gives a June 2024 estimate for issuance of a final rule.

• Property Assessed Clean Energy Financing.  In May 2023, the CFPB issued a proposed rule that would extend TILA ability-to-repay requirements to PACE transactions.  The Bureau gives an October 2024 estimate for issuance of a final rule.

• Mortgage servicing.  The agenda indicates that the CFPB is considering ways to simplify and streamline the mortgage servicing rules.  The Bureau gives a March 2024 estimate for issuance of a Notice of Proposed Rulemaking.

• Financial Data Transparency Act.  The agenda indicates that the CFPB is working with the Department of the Treasury, the Federal Reserve Board, the Office of the Comptroller of the Currency, the Securities and Exchange Commission, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, and the National Credit Union Administration to develop a proposed rule to establish data standards for the collection of information reported to each of the agencies by financial entities under their respective jurisdiction and the data collected from the agencies on behalf of the Financial Stability Oversight Council.  The CFPB gives a June 2024 estimate for issuance of a Notice of Proposed Rulemaking and a December 2024 estimate for issuance of a final rule.

In addition to the ongoing rulemakings listed in the CFPB’s agenda, the agenda includes one long-term rulemaking item, Regulation DD (which implements the Truth in Savings Act).  The CFPB observes that Regulation DD currently allows depository institutions to disclose that a variable interest rate is set at the institution’s discretion.  It states that because many institutions make such a disclosure, comparison shopping on variable rate deposit accounts is made difficult for consumers and institutions can potentially delay increasing rates paid to consumers when the Federal Reserve raises its interest rates.  The CFPB indicates that it is reviewing whether changes to Regulation DD are needed in light of current market conditions.  It gives no estimated date for future action.

It is a virtual certainty that the CFPB’s final rule on credit card late fees will face a legal challenge and other final rules, such as the CFPB’s final registry rules, are also very likely to face legal challenges.  Moreover, the validity of all CFPB rules could be in jeopardy if the U.S. Supreme Court rules in the CFSA case that the CFPB’s funding mechanism is unconstitutional.

See how collections training programs can use real-world activities and empathy to boost learning outcomes, customer satisfaction and collections performance.

Collections Leaders Seek New Ways to Reinvigorate Call Center Agent Performance

Agent turnover in call centers has steadily grown to 38% in 2022, and with increased regulatory scrutiny and economic instability, it’s a challenging landscape for handling financially distressed customers. Of course, this high turnover can be attributed to the emotionally taxing nature of debt collections. But one of the main reasons for high agent turnover is the preference for the work-from-home model. To address this issue, collections departments have begun to adapt by offering remote work options and ensuring robust remote training programs. A key challenge bubbled up from this change: creating engaging and effective collections training for remote agents.

Challenge: Delivering Effective Agent Training Remotely

In recent years, corporate training shifted dramatically to remote-based training. Research underscores the importance of crafting engaging content and honing communication skills, especially empathy, to make remote training effective. Shockingly, about 50% of corporate training programs (remote and in-person) fail due to factors like irrelevant content, disengaged learners, outdated practices, poor communication of training needs, lack of managerial clarity and uninterested employees.

“Successful remote training comes from crafting engaging content and honing communication skills – especially empathy.”

Collections leaders will continue to face the task of adapting phone channel training to a remote environment while preparing agents comprehensively and mitigating unwanted outcomes. The key to success lies in training that minimizes lectures and maximizes hands-on activities. Engaging employees during training with activities and role plays pushes them outside their comfort zone (required for retaining knowledge) and helps them practice successful communication techniques.

Ask yourself: Are you teaching the right communication techniques, practicing it, and then inspecting what you expect after the training ends?

Three Steps to Successfully Transform your Collections Training for Remote Agents

1. Design role-based training material that’s relevant to the learner’s job.

• Build training content using scenarios of the most challenging call types, so that the learner can relate to the content.
• Share calls from the top agents for each call type in the scenarios, so learners hear what a good, empathetic call sounds like.
• Provide scripts for the top five collection call types to ensure information to customers is conveyed accurately.
• Create an effective phrase library to share best practices and provide a better way to communicate difficult answers or questions.
• Create activities and role plays so agents can practice in their voice, based off the shared effective communication techniques. Activities keep the learners engaged in the training and help them build good habits.

2. Create a balanced training curriculum that engages virtual participants.

• Develop a call model and organize your curriculum chronologically by your call flow. This breaks the training down into small sections that build upon the learning.

• Organize activities related to your most common call types. Identify call types based on delinquency reasons and fact-finding, categorizing customers as Oversight, Short-Term Hardship, and Long-Term Hardship. Then create activities and role plays for each category, including relevant phrases and questions to determine affordable payment programs.

Your activities should follow a pattern of tell me, show me and then, observe me. This can be achieved by first explaining what is required on the call, then playing best-in-class calls to be able to hear what good sounds like. Then conduct role plays to practice and observe.

Tip: Create a call library to clarify the standards for an exemplary call. The library should contain the highest-rated calls categorized by call type. This allows learners to understand what constitutes a “best in class” call.

3. Establish a Post-Training Feedback Program for Continuous Learning.  Implement a Call Listening Program where managers monitor calls and give feedback.

• Develop a call coaching form that inspects the expectations that were set in training.
• Train Managers on how to coach using the form. Break down the components of how to effectively coach for successful performance.

• Observe and certify managers in providing effective coaching feedback.
• Track performance gaps and offer special training to address them.
• Reward progress by recognizing success and reset expectations if desired results aren’t met.

Repeated Practice and Experience Builds Habits

Adapting your classroom curriculum to the adult learning 70/20/10 rule will have a dramatic effect on your learner’s experience and success. Adults learn from three types of experience, following a ratio of: 70% on-the-job training experience, 20% from exposure to the right behavior and 10% from educational courses. You can modify your curriculum by ensuring your learners are participating in activities and exposed to the right behavior 90% of the time you are in class. You can decrease lecture time and increase activities such as customer listening sessions, group/individual activities and role plays. It takes someone 21 times to develop a habit and the practice you provide your learners will make perfect.

Empathy: The #1 Key to Collections Success

While building the classroom curriculum is foundational to your training, true success in collections starts with the capacity to engage in empathetic customer conversations. Teaching this remotely can be challenging, but the key to success lies in the use of real-world activities.

Empathy is Critical for Keeping Customers Around

In a study conducted by Lexop a striking 32% of respondents blamed their negative past-due experiences on unsympathetic and rude agents. Shockingly, 71% of them considered switching to the competition as a result. Clearly, being empathetic in your communication is absolutely critical.

Dedicating time to practice will help you develop effective and empathetic communication skills among your team. But why are these skills so important? Lexop surveyed past-due customers, revealing that factors like inflation, interest rate hikes and rising costs have made it increasingly difficult for consumers to manage their bills. In fact, 60% of U.S. consumers are living paycheck to paycheck.

Showing empathy and building a connection with customers who are facing financial struggles significantly enhances your ability to negotiate successful payment arrangements.

By revisiting the basics and teaching agents through practice, how to ask the right questions and respond adeptly to challenging customer situations, you increase their capacity for authentic conversations. This, in turn, boosts your chances of being first in line for payment.

SCHAUMBURG, Ill.–  Glass Mountain Capital, a leader in the accounts receivable management and capital recovery industry, is proud to announce the appointment of Diane Margolin as its new Vice President of Business Development. With over 20 years of exceptional experience in business development, Diane brings a wealth of knowledge and expertise to Glass Mountain Capital.

Diane Margolin has established herself as a highly accomplished and motivated leader in the business development sector. Her career is marked by consistent success in meeting and exceeding sales and revenue objectives, making her an invaluable asset to any team. In her new role, Diane will focus on driving the company’s growth through strategic client acquisition and contract negotiation.

Her specialties lie in Business Process Outsourcing (BPO), Revenue Cycle Management Solutions, and Call Center and Collection Solutions. These areas are critical to Glass Mountain Capital’s services and growth strategy. Diane’s excellent interpersonal communication skills, coupled with her proven ability to build and maintain relationships, make her the ideal choice to lead the company’s business development initiatives.

“Diane’s appointment marks a significant step in our journey towards expanding our market presence and enhancing our client services,” said Ed Carfora, Executive Vice President of Glass Mountain Capital. “Her extensive experience and remarkable track record in business development will be instrumental in achieving our strategic goals. We are excited to welcome her to our executive team and look forward to her contributions.”

Diane’s leadership qualities and team leadership abilities are expected to bring fresh perspectives to Glass Mountain Capital’s business strategies. She is poised to play a key role in the company’s future successes.

For more information about Glass Mountain Capital and its services, please visit https://www.glassmountaincapital.com/. 

About Glass Mountain Capital:

Glass Mountain Capital is a leading firm in accounts receivable management and capital recovery, offering a range of services to ensure efficient debt recovery while maintaining positive consumer relationships. With a commitment to professionalism, ethics, and compliance, Glass Mountain Capital stands as a trusted partner in the financial services sector.

On November 9, the State of Minnesota enacted Chapter 70–S.F.No. 2995, a large bill to amend certain sections of its current health care provisions. The bill covers extensive changes to healthcare provisions, from prescription contraceptives, hearing aids, mental health, long COVID, and childcare, among many others.

One of the significant new laws requires a hospital to first check if a patient’s bill is eligible for charity care before sending it off to a third-party collection agency. Further, the bill places new requirements on hospitals collecting on a medical debt before it can “garnish wages or bank accounts” of an individual. 

The Minnesota law also outlines how a hospital wishing to use a third-party collection agency, must first complete an affidavit attesting that it has checked if the patient is eligible for charity care, confirmed proper billing, given the patient the opportunity to apply for charity care, and, under certain circumstances, if the patient is unable to pay in one lump sum, offered a reasonable payment plan instead.

On November 29, the U.S. District Court for the Eastern District of New York granted summary judgment in favor of a debt collector (defendant) under the FDCPA, holding that the defendant’s collection letter was not misleading.

According to the court’s order, the plaintiff and the defendant established a payment agreement over the phone, during which the representative mentioned to the plaintiff that the interest rate on the loan would be lowered to 5.99 percent, and that failure to make any of the 11 monthly payments could render the agreement void. Shortly after, the plaintiff received a letter from the defendant that conveyed essentially the same information. 

The defendant also provided the plaintiff with billing statements, including a statement indicating $11.14 in accumulated interest during the initial month in the payment plan. Additionally, the defendant sent the plaintiff a collection letter that outlined the monthly payment and total balance due. The collection letter contained a warning that interest, late charges, and other charges that may vary from day to day could result in a greater balance than the amount plaintiff owed as of the date of the letter. The plaintiff argued that the warning was contradictory to the concept of “fixed” payment plan, and thus was deceptive and misleading in violation of Section 1692e.  

The court noted that it had previously dismissed an FDCPA case against the same defendant using similar language in the context of a debt settlement. In that case, the defendant provided both a disclaimer and the settlement offer, and the court held that including both in the same communication “does not automatically render the letter misleading … [d]efendant accurately and unambiguously conveyed the agreed-upon monthly payment, total balance, and APR.” The court also reasoned that holding debt collectors liable for violating the FDCPA in such instances might discourage them from proposing debt settlement plans to consumers. 

ROCK HILL, S.C. — Frost Echols, LLC welcomes Jesse “Jay” Tillman, III as an attorney in our Rock Hill, SC office. Jay has an impressive background as a commissioned officer in the U.S. Navy flying EA-6B Prowlers in Operation Desert Shield and post-Desert Storm operations. Most recently, Jay was a Deputy Commissioner for the North Carolina Industrial Commission where he was originally appointed in August of 2015 and reappointed in 2021. Jay is admitted to practice in both North Carolina and South Carolina, the U.S. District Courts of North Carolina, the U.S. Fourth Circuit Court of Appeals, and the U.S. Supreme Court.

Jay has tried numerous jury and bench trials in the various courts of North Carolina. Over his sixteen years of civil litigation, Jay concentrated his practice in the areas of personal injury, construction, real estate, commercial law, products liability, landlord/tenant law, and insurance defense. He holds a Bachelor of Arts in English and History from the University of North Carolina at Chapel Hill and obtained his law degree from the Campbell  University School of Law. 

Jay’s practice at Frost Echols, LLC will concentrate on litigation for our credit/collection industry clients and other commercial clients. He is joining the firm’s litigation team to aggressively and efficiently defend cases in the Carolinas and across the country.

Jay Tillman’s Contact Information: jay.tillman@frostechols.com

“We are thrilled to have Jay join our firm. His litigation and trial experience will serve all of our clients well. The firm is constantly looking for ways to improve our services. Bringing in an attorney with Jay’s experience allows us to continue an aggressive litigation strategy along with our complimentary compliance attorneys who work to see the issues that lead to litigation are mitigated. Mike and I are proud of the team we have built, and Jay is an exceptional addition.”  – Chad Echols, Partner, Frost Echols, LLC

On November 20, a judge for the Southern District of New York granted a motion to dismiss a Fair Debt Collection Practices Act (FDCPA) class-action holding that a simple lack of a date on a model validation notice did not amount to a violation of the statute because it was not confusing to the least sophisticated consumer.

In Loeffler v. Fleming, the model validation notice at issue included an itemization table, which informed the plaintiff that: “As of April 20, 2020, you owe $9,971.23… Total amount of the debt now: $9,971.23.” The plaintiff alleged that such a letter without a date made the notice seem “illegitimate” and failed to provide a date of reference that could be used when reading “today” and “now” in the itemization table. His alleged damages were the time and money spent to determine the proper response which was money that could have been used to pay down the debt.

The court disagreed and dismissed the matter finding that one undated notice could not be considered “harassing, oppressive, or abusive.” Also, despite the lack of a date, the notice could not be considered a misrepresentation. “Here, the [l]etter stated the dollar amount of debt owed as of ‘now,’ and gave plaintiff until December 20, 2022, to dispute the debt,” Judge Briccetti wrote. “Therefore, the only reasonable interpretation of the [l]etter was that it was sent a relatively brief period prior to December 20, 2022, and the amount of plaintiff’s debt has remained unchanged since April 20, 2020.”

Finally, the judge ruled that even the least sophisticated consumer would not be confused by the letter which was plain on its face. The only argument which did not go in the defendant’s favor was its argument for a safe harbor which the judge ruled was inapplicable to the FDCPA. No matter, the case was fully dismissed in the defendant’s favor.

This case shows that plaintiffs’ law firms will go to incredible and creative lengths to find and file claims under the FDCPA. However, just because the claim is creative, meritless cases will still be dismissed from federal court if the allegations of the complaint are absurd. Such cases should just be met with a well drafted motion to dismiss. This was one of them and it paid off for the defendant.

COPLEY, OH —DebtNext Software announces LJ Ross Associates and the CBE Group as accredited partners of the newly established dPlat Partner Accreditation Program.  This program has been developed to provide creditors with complete peace of mind when selecting collection partners to integrate with their DebtNext platform (dPlat).

To achieve accreditation, potential partners must undergo a comprehensive evaluation by the DebtNext compliance team in the areas of Integration, Authentication, Remittance Management, and SOC 2 Compliance.  LJ Ross Associates and the CBE Group have showcased excellence across all these crucial aspects, and DebtNext is extremely proud to have them as official partners.

DebtNext Software was founded in 2003 and offers the most robust recovery management platform in the market today. The DebtNext Platform (dPlat) is comprised of a comprehensive set of solutions designed to optimize every aspect of recovery operations

To obtain more information on the dPlat Partner Accreditation Program, reach out to DebtNext Software (sales@debtnext.com). 

Editor’s Note: This article, authored by John L. Culhane, Jr. & Kristen E. Larson of Ballard Spahr, previously appeared on Ballard Spahr’s Consumer Finance Monitor and is re-published here with permission. 

NEW YORK, N.Y. — Skit.ai, the leading
provider of conversational Voice AI solutions, announced today its partnership
with MCA Collection Agency, a Missouri-based third-party collection agency
primarily focused on healthcare collections. By adopting Skit.ai’s industry-leading
solution to automate outbound collection calls, MCA plans to address staffing
shortages and maximize account penetration.

Skit.ai’s
conversational Voice AI solution enables collection agencies across the U.S. to
automate phone interactions with consumers, including right-party contact (RPC)
verification and promise-to-pay (PTP) capture. The solution is fully compliant
with federal and state regulations, enabling lenders and collection agencies to
accelerate revenue recovery and grow their operations.

MCA’s leadership
had been previously using a voicemail drop telephony solution to reach out to
consumers and remind them of due payments. The agency’s CEO discovered
Skit.ai’s technology at an industry event, during which she listened to the
voicebot in action and was impressed with the solution’s ability to handle
intelligent, two-way conversations with consumers.

“When it comes to
collections, most consumers don’t want to have to interact with another person.
We wanted to make the process easier. Skit.ai’s solution allows consumers to
choose; they can interact with the voicebot, ask to speak to one of our agents or
visit our website to make a payment,” said Julie
Repa, CEO of MCA Collection Agency.

Repa was
particularly impressed with the ease of the deployment process and
integrations. Using a flat file transfer, Skit.ai safely transferred campaign
data from the agency’s CRM system to an SFTP (Safe File Transfer Protocol)
folder to launch the campaign with the Voice AI solution. As of now, the agency
has been initiating thousands of calls per day using Skit.ai’s Voice AI
solution, handling an impressive volume of calls in a cost-effective manner.

For smaller
collection agencies, account penetration and staffing can be particularly
challenging and expensive. That is why adopting the right technology can be
pivotal for business growth.

“Skit.ai’s key role in the digital
transformation journey of MCA Collection Agency shows that any business, no
matter how small, can tap into Voice AI to automate and streamline the recovery
process,” said Sourabh Gupta, Founder
and CEO of Skit.ai. “We look forward to seeing MCA thrive thanks to our
technology.”

Mail us at info@skit.ai
to learn more about how Skit.ai can help you accelerate revenue recovery with
higher efficiency and at an infinite scale irrespective of the size of your
collection agency. 

About MCA Collection Agency:

MCA is a third-party debt collection agency
based in St. Louis, Missouri. A family-owned and run company, MCA has been in
business since 1950, maintaining an impeccable track record of service and
business ethics. MCA is a member of the American Collectors Association and the
Missouri Collectors Association, along with the Better Business Bureau, Fenton
Chamber of Commerce, and the NFIB. Visit https://mcacollectionagency.com/

About Skit.ai:

Skit.ai is the
accounts receivables industry’s leading conversational Voice AI company,
enabling collection agencies to streamline and accelerate revenue recovery.
Skit.ai’s compliant, configurable, and easy-to-deploy solution enables
enterprises to automate nearly one million weekly consumer conversations.
Skit.ai has been awarded several awards and recognitions, including Stevie Gold
Winner 2023 for Most Innovative Company by The International Business Awards,
Disruptive Technology of the Year 2022 by CCW, and Gold Globee CEO Awards 2022.
Skit.ai is headquartered in New York City, NY. Visit https://skit.ai/