CFPB Director Rohit Chopra on Thursday defended his agency’s proposed rule to prohibit the listing of medical debt on credit reports, contending that such debts are not a fair indication of a person’s financial health.

“We’ve done extensive research on whether medical bills on credit reports are predictive of whether a consumer repays their other loans,” Chopra said on Reddit, where he took questions about the proposed rule. “What we’ve found is that the predictive power is really limited.”

Comments on the CFPB rule are due on Aug. 12. Opponents of the rule have said that medical debt should be listed on credit reports, contending that omitting them would not give a clear picture of someone’s debts. Chopra said that prohibiting the listing of medical debt on credit reports would not discourage people from paying their bills.

“Our observation is that consumers pay their bills,” he said. “Taking bills off credit reports is not likely to have a substantial impact on the health care industry for a variety of reasons, including that a lot of the incentives are driven by insurance and not by self-paid bills.”

He said that 15 million Americans have $49 billion in outstanding medical bills in collections appearing in the credit reporting system. “The complex nature of medical billing, insurance coverage and reimbursement, and collections means that medical debts that continue to be reported are often inaccurate or inflated,” he added.

He predicted that prohibiting the listing of medical debts on credit reports could lead to the approval of about 22,000 additional mortgages every year.

Chopra said the CFPB would be on firm legal ground if the agency issued a final rule governing medical debt. He said Congress placed restrictions on lenders using medical information in the Fair Credit Reporting Act, referring to Section 604(g)(5) of the FCRA. “After that, federal financial agencies created an exception for medical bills,” he said.  “The proposed rule would simply close that loophole, using explicit authority that Congress granted to the CFPB, so we are confident that we’re on solid legal ground in making sure that Americans aren’t punished for getting sick.”

Previewing what could be the agency’s next move on medical debt, Chopra said that while medical payment products can offer an enticing promise of cost savings, convenient payment plans and administrative ease for providers, CFPB research has found that patients who use such products “end up worse off.”

He said the CFPB is considering studying these products and is considering the bureau’s options in this area..

News in the ARM industry moves at lightning speed; determining what’s important and what’s just noise can be challenging. This is why the editorial team at insideARM sifts through all the news and brings you the need-to-know highlights.  We featured a varied array of news items last week, touching on nascent congressional action, state court developments, and a notice from the CFPB. 

On Tuesday, we highlighted some interest groups’ efforts to persuade congress to improve its regulatory expertise in the wake of the Loper decision. In undoing the Chevron Deference doctrine, Loper has created a power vacuum, where ambiguous laws once interpreted federal agencies will be decided instead in the courts. Congress has a few avenues to prevent this shift, including beefing up its regulatory oversight by drafting more specific and complex legislation or codifying Chevron into law. Those in the ARM industry should keep this on their radar because action (or inaction) from congress will affect the industry. 

On Wednesday, we published reporting on the uptick of state class action lawsuits around collections practices. Plaintiffs are taking advantage of differences in standing rules in state courts, where it can be easier to file class action lawsuits than on the federal level. The ARM industry should remember that, in addition to differing on substance, state laws have different rules for bringing suits. Compliance teams should monitor state level cases accordingly.  

We rounded out the week by reporting on a recent notice by the CFPB. In a recent circular, the Bureau notified agencies that some employee nondisclosure agreements may violate federal law by discouraging whistleblowing or participating in federal investigations. ARM entities routinely have their employees sign NDA’s. Whether the CFPB has this authority or not, ARM entities should note the CFPB’s stance and implicit encouragement of whistleblowers and may consider updating their NDAs to match these expectations. 

As always, we thank you for reading the weekly recap to stay on top of this ever-changing industry! For a breakdown of the week of July 29th, click here. 

Have a question about how your company should react to the news above? We have a group for that! The weekly peer call hosted by insideARM’s Research Assistant is the perfect place to ask a question and get advice from industry colleagues who are facing the same challenges you are. Not sure if it is for you? Try it on for size with our 1-month free trial. Click here to learn more! 

ST. LOUIS, Mo.– Credit Control, LLC (“Credit Control”) is proud to announce for the fifth year in a row, our employees have ranked us as winners in the Best Places to Work in Collections program. This is the company’s fifth time participating and the fifth time being recognized as program winners. 

The 2024 Best Places to Work in Collections program was sponsored by ACA International, who held an awards ceremony honoring the program winners from this year. Credit Control was proud to be recognized by our team members, Best Companies Group, and ACA International. 

The Best Places to Work in Collection program, now in its 17th year, is administered by Best Companies Group, which conducts over 60 local, national and industry “Best Places” programs each year. This year, only 38 companies met the standard to participate in this survey which identifies, recognizes, and honors the best places of employment in the Collections industry.

The program includes a rigorous two-part blind survey process to determine the Best Places to Work in Collections. This included an evaluation of workplace policies, practices, philosophy, systems, and demographics. The second part consisted of an employee survey to measure the employee experience with direct, unfiltered employee input, including all Credit Control locations across the country. 

Rick Saffer, the President & CEO of Credit Control, commented, “Our leadership team strives to build a culture that is diverse, cohesive, and founded on trust and teamwork. It is extremely rewarding to see this hard work be recognized with a positive response from our employees. Being ranked #1 by both our clients and our employees is a huge honor.”

For more information on the Best Places to Work in Collections program or to view the full rankings, visit:  www.bestcompaniesgroup.com/best-places-to-work-in-collections/

For more information on Credit Control, LLC and how we partner with our clients to help care for their customers, please visit: www.credit-control.com

About Credit Control, LLC

Headquartered in Earth City (St. Louis) Missouri, Credit Control, LLC is a recognized leader in recovery solutions. Since 1989, Credit Control has served a wide variety of blue-chip clients through its nationwide locations and a team of over 500 employees. The company is founded on its core values of providing strong customer service and exceptional recovery results for our clients; developing an employee culture that is built on trust, accountability, and clear communication; and creating solutions that utilize the latest technology. 

Our recovery approach blends traditional collections with omni-channel communications in a compliant & customer-centric culture. Credit Control maintains ISO/IEC 27001 certification, SOC 2® Type 2 certified audit reports, Level 2 PCI-DSS compliance, and fully secured systems. The company has received numerous awards for performance, compliance, and innovation from many of the largest creditors in the world.

As an Equal Opportunity Employer, Credit Control is committed to fostering, cultivating, and preserving a culture of diversity, equity, and inclusion. Credit Control’s mission is to become the preferred supplier to industry leaders by providing the highest level of quality, compliance, and innovation while delivering top tier performance in a positive employee work environment.

Company Contacts

Paul Farinacci, Executive Vice President and Chief Sales & Marketing Officer

Direct:  818-720-6502 Email:  pfarinacci@credit-control.com

Marc Ross, Vice President of Marketing

Direct:  305-389-6235 Email:  mross@credit-control.com

Credit Control, LLC – Corporate Headquarters

3300 Rider Trail S, Suite 500

Earth City, MO 63045

On July 24, the CFPB issued a circular to law enforcement agencies and regulators clarifying that overly broad confidentiality agreements required by certain employers may violate Section 1057 of the CFPA, which protects whistleblowers. Nondisclosure agreements can violate the CFPA if they discourage employees from reporting suspected financial law violations to governmental authorities or participating in investigations. The Occupational Safety and Health Administration (OSHA) was highlighted as the key entity responsible for addressing retaliation claims under various federal laws, including the CFPA.

The CFPB’s analysis in the circular suggested that confidentiality agreements, when broadly worded and leading individuals to believe that communication with law enforcement regarding potential violations of law would constitute a breach of the agreement, may be seen as a threat of retaliation against whistleblowers, which is prohibited under Section 1057 of the CFPA. Such agreements may imply legal action or job termination for employees who breach confidentiality to report legitimate legal violations.

The circular referenced other regulatory bodies, including the SEC and CFTC, which have acted against companies using confidentiality agreements that obstruct reporting to government agencies. The CFPB advised that the risk of violating whistleblower protections should be reduced. Employers should ensure confidentiality agreements allow free communication with government enforcement agencies and cooperation in government investigations.

If you are reading this article, you are likely aware that a creditor collecting its own debts in its own name is not a “debt collector” under the federal Fair Debt Collection Practices Act (“FDCPA”) or its implementing rule, Regulation F (“Reg F”). Of course, the federal Consumer Financial Protection Bureau (“CFPB”) and Federal Trade Commission (“FTC”) both take the position that creditors ought to comply with most provisions of the FDCPA in order to prevent unfair, deceptive, or (in the case of the CFPB) abusive collection practices.

For years, the FDCPA was the primary tool for consumer litigants to target collection practices. However, the FDCPA has its limits. The law only applies to “debt collectors” which include persons collecting debts owed or due another, and persons engaged in a business, the principal purpose of which is the collection of debts. It is practically impossible to sue in federal court for technical violations of the FDCPA. In the wake of the U.S. Supreme Court’s holdings in Spokeo, Inc. v. Robins, 578 U.S. 330 (2016) and TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021), the bar for Article III standing (i.e., the harm that a plaintiff must allege to bring a case in federal court) continues to grow ever higher.

But federal regulatory risk is not the only risk for creditors collecting their own paper. Consumer advocates and plaintiffs’ attorneys are turning their attention to state collection practices laws. About 31 states have adopted their own laws that regulate collection practices (referred to throughout this article as “mini-FDCPA” laws). These state mini-FDCPA laws may regulate the collection practices of a wider class of entities than the federal FDCPA, including servicers that begin handling accounts prior to default and creditors collecting their own debts. Like their federal analog, state mini-FDCPA laws generally prohibit unfair, unconscionable, deceptive, harassing, or abusive acts or practices. As a result, most creditors are likely following these rules simply by virtue of following the federal FDCPA as a matter of UDAAP prevention. But, the devil is in the details. Some state mini-FDCPA laws go beyond the FDCPA and impose various technical obligations, including disclosure requirements, contact frequency limitations, and debt validation notices and procedures.

Most state mini-FDCPA laws are enforced by the state attorney general. However, many states also have private rights of action. By and large, state attorneys general will typically pursue companies for truly abusive, deceptive, or harassing collection conduct, rather than mere technical violations. Failure to provide mini-Miranda warnings doesn’t make for splashy headlines, and it is difficult to argue that a consumer was harmed by the failure to provide a mini-Miranda warning. What is attention-grabbing and closely tied to consumer harm? Protecting consumers from relentless, harassing collection calls or empty threats to sue.

Plaintiffs’ attorneys, on the other hand, are less constrained in bringing lawsuits to enforce so-called “technical” rules in state mini-FDCPA laws. These cases are less exciting, and the likelihood of consumer harm is low. But they are enticing for several reasons. First, the increasing use of automation – from batching and sending electronic and written communications, to imposing fees – means that a practice impacting one consumer has likely impacted many consumers. Second, state courts often do not have as rigorous a standing bar as Article III federal courts. In other words, plaintiffs may not have to demonstrate the same level of harm or risk of harm to bring their mini-FDCPA cases in state court. Couple the low standing bar with the increasingly automated ways in which companies do business, and you have a recipe for class action risk for violations of state mini-FDCPA laws, including for the most technical violations that pose little risk of consumer harm.

We have seen just that in recent months. Plaintiffs have brought class action lawsuits based upon a creditor or servicer sending collection emails and text messages overnight, alleging violations of state laws that prohibit communicating between the hours of 9 pm and 8 am in the plaintiff’s time zone. These lawsuits have seized on the common practice of batching and sending emails or text messages overnight and are relying on courts to agree with the CFPB (as expressed in Reg F) that an electronic communication is made when it is sent, regardless of when the consumer actually views it.

Still other plaintiffs have used state mini-FDCPA laws to target payment convenience fees (i.e., fees to make a payment via a certain method, such as over the phone or by credit card). These types of fees usually are not expressly prohibited nor expressly authorized by law. Plaintiffs have brought cases alleging that the charging of such fees violates state mini-FDCPA laws that prohibit charging fees not authorized by the law or the contract creating the debt. They, too, are relying on courts to agree with the CFPB that such fees are incidental to the debt, not a separate transaction or service, and therefore any “clickwrap” at the point-of-sale is insufficient authorization.

The statutory requirements under state collection laws are already complex to navigate. While automation offers convenience and consistency, it also heightens the class action risk in states with private rights of action. In addition, the low bar for standing in many state courts fuels exposure for mere “technical violations” resulting in little-to-no consumer harm. Creditors and servicers would be wise to closely review their state compliance obligations and consider whether operational improvements are necessary.

—————— 

This article is provided for informational purposes and is not intended nor should it be taken as legal advice.  The views and opinions expressed in this article are those of the authors in their individual capacity and do not reflect the official policy or position of the partners of Hudson Cook, LLP or clients they represent. 

DULUTH, Ga. — Crown Asset Management, a Georgia-based receivables management firm, proudly supported the Mitsubishi Electric Classic this April. The charity golf tournament took place at TPC Sugarloaf. 

The Mitsubishi Electric Classic is an annual Champions Tour men’s professional golf tournament featuring players ages 50 and over. Giving back is at the heart of this tournament, with two primary beneficiaries selected annually. This year, all proceeds from the tournament were directed to Cink Charities and Special Needs Schools of Gwinnett. 

Chief Financial Officer, Scott Arnold, coordinated this CAM Cares initiative. “Golf is something that many of us enjoy at Crown Asset Management. The opportunity to link watching professional golf locally with giving back to the community is a win for all involved. We’re committed to strengthening our local community and making a difference.”

Cink Charities

Cink Charities, founded by professional golfer Stewart Cink and his wife Lisa, plays a vital role in supporting a variety of charitable initiatives and organizations. The charity primarily focuses on enriching the lives of children and families in need, as well as supporting health and wellness programs. 

Cink Charities has been able to raise significant funds and awareness for numerous causes, making a substantial impact on communities across the United States. The organization often collaborates with other charities and foundations to maximize its reach and effectiveness, demonstrating a strong commitment to philanthropy and social responsibility. 

By funding scholarships, educational programs, and extracurricular activities, the charity helps bridge the gap for children who may not have access to such resources. This focus on education not only enhances the individual lives of the recipients but also contributes to the broader goal of community development and empowerment. The charity’s efforts in supporting health-related initiatives, such as cancer research and patient support programs, further underscore its comprehensive approach to making a positive difference in society. 

Special Needs Schools of Gwinnett

The Special Needs Schools of Gwinnett (SNS) is an essential institution dedicated to providing specialized education and support for children with developmental and learning disabilities. Located in Suwanee, Georgia, SNS offers a tailored educational environment that addresses the unique needs of each student, promoting their academic, social, and emotional growth. 

The school’s individualized approach ensures that students receive the necessary resources and support to thrive. By focusing on small class sizes, personalized instruction, and therapeutic services, SNS creates a nurturing and inclusive atmosphere where students can reach their full potential.

In addition to its academic programs, the Special Needs Schools of Gwinnett place a strong emphasis on life skills and vocational training. This holistic approach prepares students for greater independence and success beyond the classroom through extracurricular activities, social events, and parent involvement. 

Giving Back to the Community

Crown Asset Management’s support for events like the Mitsubishi Electric Classic is crucial in amplifying the impact of these initiatives. This attendance and support underscores the firm’s commitment to corporate social responsibility, demonstrating how businesses can play a pivotal role in fostering community development and supporting charitable endeavors. 

Through its involvement, Crown Asset Management contributes to the sustainability and growth of these initiatives, ensuring they can continue to provide essential services and support to those in need. To learn more about Crown’s support of various charitable organizations, visit its news reel. 

About Crown Asset Management

Crown Asset Management, LLC is recognized by Receivables Management Association International (RMAI) as a Certified Receivables Business, signifying our commitment to best practices and high standards throughout our organization. We take a consumer-centric approach and believe in treating all consumers with respect. Our core values are Excellence, Integrity, Reliability, Respect, Teamwork and Leadership.

Congress must adjust to the demise of the Chevron Deference doctrine by drastically improving its regulatory expertise, witnesses told a House Committee on July 23.

“Congress must reclaim its lawmaking and rule-writing authority from the executive branch by marshaling appropriate resources and full-time personnel to perform regulatory oversight, including cost-benefit analysis and disclosures often neglected by the executive branch, sometimes in violation of law,” Clyde Wayne Crews Jr., a fellow in regulatory studies at the Competitiveness Enterprise Institute, told the House Administration Committee at a hearing on the impact of the Supreme Court’s Loper decision.

While other witnesses said that the decision will provide federal judges with more power, Crews emphasized that Congress must step up and write laws with much more specificity or risk having them interpreted by courts  without the guidance of agencies.

Crews noted that policymakers have long called for the establishment of a Congressional Office of Regulatory Analysis.

Kevin Kosar, a senior fellow at the American Enterprise Institute agreed that an office he referred to as the Congressional Regulation Office is essential in the post-Loper world.

“Congress must invest in its capacity if it wants to have any chance of ensuring the executive branch is faithfully executing the law when it issues regulations,” he said, adding that the new office should be modeled after the Congressional Budget Office.

Satya Thallam, senior vice president of government affairs at Americans for Responsible Innovation and a senior fellow at the Foundation for American Innovation, said while Congress could beef up its regulatory oversight it also could simply enshrine the Chevron Deference doctrine in law.

“Nothing in the decision prohibits Congress from delegating vast swaths of authority to the Executive Branch – it just has to say so explicitly,” she said.

Indeed, Rep. Pramila Jayapal, D-Wash., has introduced H.R. 1507, which would make the Chevron deference doctrine federal law.

Josh Chafetz, a professor of law and politics at the Georgetown University Law School said Congress could pass legislation making it clear that an agency must follow Congress’s directives.

“Indeed, if Congress were so inclined, rather than inserting these Chevron clauses into individual regulatory statutes, it could pass…Chevron writ large,” he said. “In other words, it could pass a single statute saying something like, ‘In any circumstances in which the application of any act is ambiguous, the agency statutorily charged with administering that act shall interpret the act consistently with the act’s purpose and the agency’s mission.’”

CHICAGO, Ill. — Harris & Harris (the “Company”), a leader in accounts receivable management and customer care, today announced the acquisition of The CMI Group (“CMI”), an accounts receivables management and customer care firm, located in Dallas, TX. Harris & Harris and CMI collectively serve over 200 clients across a diversified set of industries. This strategic combination represents a meaningful expansion in operational capabilities and personnel.     

CMI expands Harris & Harris’ capabilities in complementary industries and service offerings, grows its geographical footprint to Dallas, and expands the Company’s accomplished leadership team.  Additionally, the acquisition will generate increased operational capacity, which will result in improved client and stakeholder experiences. 

“This acquisition marks a significant milestone for Harris & Harris, enabling us to gain economies of scale, enter new markets, deepen relationships in our existing verticals, and ultimately grow revenue.  CMI expands our presence to a strong talent pool in the Southwest.  Throughout the process, we have been consistently impressed with the high caliber of associates and appreciate their hard work building CMI. We are excited to implement some of our innovative technology and analytics to enhance their current service offerings.  The combined company will help our clients succeed,” said David Peters, President and CEO of Harris & Harris. 

Carrie Finney, CEO and President of CMI, added, “Harris & Harris has an outstanding culture and we’re excited for our people to join a team with strong values, a history of client success, and a deep commitment to corporate philanthropy.  I am confident that they will continue to build upon the success we’ve experienced to date.”   

About Harris & Harris 

Harris & Harris is one of the leading receivable recovery solution providers in the nation, providing services to the healthcare, government, and utilities industries. For more than 55 years, the Company has been guided by the principles of respect, compassion, and trust.  Harris & Harris treats its clients’ business as if it was their own.  The Company tracks accounts carefully, collects diligently, and provides outstanding client care.  Harris & Harris is known for its collaborative approach and is committed to protecting its clients’ good name in the marketplace.  The Company’s goal is to grow their clients’ businesses and improve their profitability. Harris & Harris is headquartered in Chicago, IL.  Visithttps://www.harriscollect.com/ for more information. 

About The CMI Group 

CMI is a business process outsourcing services provider founded in 1985, which offers client care solutions, revenue cycle management, and accounts receivable management services.  Relationships are the foundation of the company, and CMI believes that success occurs when there is collaboration on a common objective. CMI is based near Dallas, TX. 

News in the ARM industry moves fast. Keeping up and determining what’s important can be challenging. This is why the editorial team at insideARM sifts through all the news and brings you the need-to-know highlights. Last week we brought you news about an interesting FDCPA-letter case, Congress’s struggles post-Chevron, and information about consumer spending. Read on for a breakdown of these stories and why we think you need to know about them.

Tuesday’s news involved a case in which a district court rejected a consumer’s claim that letters to his attorney violated the FDCPA. The court focused on the letter’s recipient, rather than its substance.  In a world where consumer attorneys are constantly finding new and creative ways to use the FDCPA to manufacture lawsuits, this case is a good reminder that not all of those novel ideas will work, and sometimes logic wins out.

On Wednesday, we published an article detailing Congress’s struggle post Chevron. Several bills were introduced in both the House and Senate that attempt to help shape the future regulatory environment. While there’s nothing to do regarding these bills right now, to ensure they are prepared for the future, those in the ARM industry should pay attention to what’s happening on Capitol Hill post-Chevron. 

On Thursday, we brought you an article detailing the Consumer Spending Divide, how it impacts delinquencies, and some tips for how to recover more across each side of the divide. We chose this article for you because it was full of useful and easy-to-understand information regarding the current financial landscape and how you can use that information to improve your business. 

We at insideARM appreciate you joining us for another weekly recap! If you still have some catching up to do you can find our recap for the week of July 22nd here.

For more ARM industry resources and a weekly peer call where you can get your questions answered, click to learn more about Research Assistant by insideARM. With our free 1-month trial you can see if Research Assistant is right for your company!

ROCHESTER, N.Y. — Continental Service Group, LLC d/b/a ConServe, in conjunction with the company’s “Matching Gift Program”, donated its June ConServe Cares proceeds to Lollypop Farm, Humane Society of Greater Rochester. The ConServe team supports and funds the efforts of numerous local non-profit agencies that strive to make a difference. 

“We are grateful for the support we receive from partners like ConServe,” says President & CEO Alice Calabrese. “The funds raised through programs like ConServe Cares are invaluable. They make it possible for Lollypop Farm to find homes for thousands of homeless and abused pets every year and help keep thousands more with the families who love them.” 

George Huyler, Vice President of Human Resources at ConServe said, “Our mission statement underlines the importance of community contribution. We commend our employees for consistently engaging in philanthropic efforts and we appreciate Lollypop Farm for enriching the lives of these unique community members.”

About ConServe

ConServe is a top-performing accounts receivable management service provider specializing in customized recovery solutions for their Clients. Anchored in ethics and compliance, and steadfast in their pursuit of excellence, they are a consumer-centric organization that operates as an extension of their Clients’ valued brands. For over 38 years, they have partnered with their Clients to provide unmatched customer service while simultaneously helping them achieve their accounts receivable management goals. Visit us online at: www.conserve-arm.com  

About Lollypop Farm, Humane Society of Greater Rochester

Established in 1873, Lollypop Farm is the largest animal welfare organization helping pets and people in the Greater Rochester area. Lollypop Farm is committed to creating a just and compassionate world for all animals. Together with our community, we better the lives of animals through justice, prevention, and life-saving care. With a main campus in Fairport, the organization provides shelter, care, and adoption for dogs, cats, small animals, birds, reptiles, horses, and other farm animals. Lollypop Farm is an independent nonprofit organization supported through donations and program fees. For more information and to meet current animals available for adoption, please visit www.lollypop.org