TAMPA, Fla. — Preferred Collection and Management Services, Inc., in Tampa, Florida has a “Preferred Gives Back” program created by CEO and past president of the Florida Collectors Association, David Kelley. Preferred participates in a multitude of charity events throughout the year. This is the first year, however, that they participated in the John Winter Memorial Teddy Bear Round Up which runs from November 24^th to December 18^th every year. Winter was a Tampa meteorologist for WFLA News Channel 8 and a member of the Rough Riders who often spoke of taking Teddy Bears to children in hospitals during his morning forecast.

The Tampa Rough Riders were formed to preserve the memory of President Theodore Roosevelt and his service with the First U.S. Volunteer Cavalry when they fought in the Spanish-American War in 1898. For several years the Rough Riders spent their own money to buy new teddy bears to take to the children in hospitals which later expanded to what it is today. They tend to stick specifically to stuffed bears because Teddy Roosevelt is the name sake for the “teddy bear.”  They deliver to many other places and not just children in hospitals but to children living in shelters, senior citizens, cancer patients and wounded warriors at the Haley V.A. Center. According to Tony Bimonte, Teddy Bear Committee Chairperson for the Rough Riders, they pretty much cover every hospital in Tampa, Saint Petersburg and Bradenton that they receive an invite from.

Erin Swartz, who coordinated this first time event said, “Preferred knows that people don’t get sick or need a dose of happiness just around Christmas time so we will work on collecting bears throughout the year for the Rough Riders so we can continue to bless those who are going through a difficult time.” Pictured below are some of the management and staff that collected more than 30 bears for the program.

ACA International announced yesterday the release its 2017 Ernst & Young survey results, which provide an in-depth overview of the economic importance of the third-party debt collection industry on the U.S. and individual state economies. According to its member alert,

Based on data from 2016, the report details the industry’s contribution to employment, asset recovery and other fiscal categories. Since 2013, the last year a similar survey was conducted, the amount of debt collected has increased by 42 percent, which translates to a return of $67.6 billion to creditors in 2016.

Key national findings of this landmark study include:

• Recovering Assets:  A total of $67.6 billion was recovered on behalf of creditor clients. The collection of consumer debt provides a valuable benefit to American households, as third-party debt collection efforts represent $579 in savings on average per household by keeping the costs of goods and services lower.
• Job Creation:  Third-party collection agencies directly employed 129,262 people with a payroll of $4.9 billion. Indirectly, the industry influenced creation of more than 89,000 jobs.
• Paying Taxes:  Third-party collection agencies and their employees paid $852 million in federal taxes, and $677 million in state and local taxes. The ancillary impact of the industry generated a total $1.6 billion in federal taxes paid and $1.28 billion in state and local taxes.
• Giving Back:  Third-party collection agencies and their employees contributed $17.7 million and volunteered 521,700 hours to charitable community causes.

The report, which also includes detailed state data, is available as a resource to you as part of ACA International’s commitment to advancing the industry through advocacy, research and education.

Click here to review the complete Ernst & Young report, “The Impact of Third-Party Debt Collection on the US National and State Economies in 2016.”
 

As the adage goes, the only thing that is constant is change—just ask an attorney or compliance professional servicing the accounts receivables industry. The last decade has ushered in profound changes on the technological, economic, and regulatory/legal fronts, leaving in their wake a reshaped landscape, with only those companies that are able to absorb and adapt to change still standing.  This article takes a look at regulatory change management, what it is, and why it is so important for companies engaged in debt collection.

What Is Regulatory Change Management?

Regulatory change management is the process of preparing and adapting to changes in regulatory and other legal requirements. Said differently, regulatory change management is compliance management.  Complying with the law requires, naturally, knowing what the law is; but this is easier said than done. Debt collection, and related activities like credit reporting, are highly regulated by multiple, overlapping statutes, rules, court decisions, and government authorities. 

Changes to laws and regulations come in many flavors. Legislatures pass amendments or new laws.  Executive agencies issue new rules or revise existing ones and issue guidance in various formats that broadcast their expectations, but which also may be binding.  Enforcement agencies, such as the Consumer Financial Protection Bureau (CFPB), the Federal Trade Commission (FTC), and state attorney general offices, bring enforcement actions that signal their understanding of what the law requires.  Finally, courts frequently weigh in and resolve disputes, making and changing the law. 

What Are the Core Elements of a Regulatory Change Management System?

Effectively implementing changes to business processes in order to comply with changes in the law or to incorporate best practices can be challenging, depending on the size and complexity of the change and how many (and which) of the company’s systems, teams, and processes are impacted. 

Take the example of out-of-statute debt disclosures. By 2012, the FTC, followed by the CFPB, signaled through enforcement actions that the failure to affirmatively disclose to consumers that any debt being collected that was past the applicable statute of limitations likely would be considered a prima facie case of threatening to sue on out-of-statute debt, in violation of the FDCPA. Meanwhile, several states passed laws or regulations to require such a disclosure.  Debt collection companies had to decide whether to proactively implement such a disclosure across the board, even in states where it is not legally required, and further had to decide (1) which letters should include the disclosure, (2) whether to make verbal disclosures, (3) what language to use, and (4) how quickly to roll out, given other legal and business priorities.

Technical implementation of such a new disclosure also involves a series of decisions, such as:  (1) What IT systems need to be programmed to properly trigger the inclusion of the disclosure?  (2) What vendors need to be involved in updating the letter templates and coding?  (3) Who is responsible for drafting and approving the language?  (4) Who is responsible for testing that the disclosures are being included in the correct letters?  (5) Where should the disclosure be placed, and how does it impact other mandatory disclosures?  (6) What policies, procedures, training materials, and quality control processes need to be updated?

As this example illuminates, a robust system must be able to:

1. Identify developments in law that potentially impact the company’s compliance profile;
2. Analyze these developments to determine applicability and, if applicable, scope of impact;
3. Implement business process changes to conform to the new or changed requirement/prohibition; and
4. Document the changes by updating and drafting written policies and procedures to reflect such changes.

Identification:  There is no one-size-fits-all approach for tracking potentially applicable developments.  Depending on your compliance and risk profile and budget, there are a variety of resources you can subscribe to, join, or purchase, including:

• Membership in one or more trade associations that monitor regulatory changes in the industry.
• Purchase of a subscription service / database.
• Free alerts from regulatory agencies, law firms, and consulting firms that publish relevant content.
• Retaining one or more law firms or consulting firms with subject-matter expertise.

The key is ensuring there are no material gaps in coverage. 

Analysis:  The devil is always in the details; once a regulatory development is identified, it must be analyzed carefully against the company’s operations to assess whether and how it applies.   The nature and scope of the change largely will dictate the resources that will be needed.  For example, a change in how often a consumer can be contacted will require considerably different resources than a requirement regarding the type of documentation needed to bring a collections lawsuit.  That said, a “first cut” analysis often can be made by compliance or legal counsel.   

Ultimately, you need a final, sound determination of whether the regulatory development applies and, where it does, a list of all business processes, departments, systems, and policies and procedures that are impacted and how.  

Implementation:  After determining application and scope, an implementation plan should be prepared that identifies relevant action items, assigns ownership of each action item, and sets deadlines.  In addition, consider whether the change necessitates any type of employee-, consumer-, or client-facing communication or training. 

Documentation:  The final step is documenting the change(s) by updating written policies, procedures, training materials, etc. to reflect the change(s).  In some cases, new documents will need to be prepared.  Finally, consider whether any compliance testing or quality controls need to be created or updated to ensure what was changed is working as expected. 

Why Is Regulatory Change Management Important?

In an industry where regulatory developments occur weekly, if not daily, the inability to smoothly and effectively manage change could, at a minimum, significantly disrupt day-to-day operations and business performance.  At maximum, failure to comply with regulatory requirements or expectations could result in a regulatory investigation, a poor supervisory examination, or a private lawsuit.  These events are costly and distracting, regardless of the ultimate outcome.

You may be thinking, “But what about the bona fide error defense available under the FDCPA?”  As the Supreme Court found in Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 130 S.Ct. 1605 (2010), the bona fide error defense does not apply to mistakes of law, only mistakes of fact.   

Prompt identification and implementation of legal and regulatory developments, even before they become officially “binding,” are more critical than ever following Oliva v. Blatt, Hasanmiller, Leibsker & Moore LLC, 825 F. 3d 788 (7th Cir. 2016).  Some background is in order.  The FDCPA requires collection lawsuits to be brought in the “judicial district or similar legal entity” where the debtor lives or where the contract sued upon was signed.  In a 1996 case, Newsom v. Friedman, the 7th Circuit held that Illinois’ Circuit Courts constituted “judicial districts,” and that the intra-Circuit municipal districts were not separate “judicial districts” for purposes of venue selection under the FDCPA.  Eight years later, in Suesz v. Med-1 Solutions, LLC (2014), the 7th Circuit overturned Newsom, holding that “the correct interpretation . . . is the smallest geographic area that is relevant for determining venue in the court system in which the case is filed.” 

The firm filed a lawsuit against Oliva in a municipal district, which was permissible under Newsom, but not under Suesz, which was decided while the action against Oliva was pending.  The firm voluntarily dismissed the action after Suesz, and Oliva subsequently sued the firm.  On appeal, the 7th Circuit held that the “new rule” instituted by Suesz applied retroactively and that reliance on Newsom was a mistake of law that foreclosed the bona fide error defense.  Understandably, this case has set off alarm bells in the industry, but it also reinforces the need for debt collection companies to establish strong regulatory change management programs to promptly identify and adapt to change.   

 ——

Alexandra Megaris is Counsel with the law firm Venable. Her practice focuses on regulatory investigations and government enforcement matters involving state attorneys general, the Federal Trade Commission (FTC), Consumer Financial Protection Bureau (CFPB), state regulatory agencies, and the U.S. Congress. She also works closely with Venable’s federal and state government affairs teams in advocating for clients before these agencies.

 

Last week the U.S. Department of Education, Office of Federal Student Aid (FSA) announced its next step in its vision to create the “Next Generation (NextGen) Financial Services Environment.”

First, a little background

In June 2017 insideARM reported on the appointment of Dr. A. Wayne Johnson as the new head of FSA. In that announcement, Education Secretary Betsy DeVos said,

“Wayne is the right person to modernize FSA for the 21st Century. He actually wrote the book on student loan debt and will bring a unique combination of CEO-level operating skills and an in-depth understanding of the needs and issues associated with student loan borrowers and their families. He will be a tremendous asset to the Department as we move forward with a focus on how best to serve students and protect taxpayers.” 

Fewer than 60 days later, on August 1, 2017, ED announced the “Next Generation Processing and Servicing” plan. In that release, Dr. Johnson said,

“The FSA Student Loan Program represents the equivalent of being the largest special purpose consumer bank in the world. To improve customer service, we will take the best ideas and capabilities available and put them to work for Americans with student loans. When FSA customers transition to the new processing and servicing environment in 2019, they will find a customer support system that is as capable as any in the private sector. The result will be a significantly better experience for students – our customers – and meaningful benefits for the American taxpayer.”

insideARM reported at the time that the anticipated FSA Next Generation Processing and Servicing Environment will provide for a single data processing platform to house all student loan information while at the same time allowing for customer account servicing to be performed either by a single contract servicer or by multiple contract servicers. We commented,

In our opinion, a single database that contains all information and activity on a consumer’s account is an absolute necessity. The Department currently has four primary servicers: Navient, NelNet, Great Lakes Educational Loan Services, and FedLoan Servicing. It is absolutely crazy for a borrower with multiple loans to potentially have accounts with multiple servicers that do not communicate nor share the same database.

In related news, on October 20, 2017 insideARM reported that one of the primary servicers, Nelnet, announced its intentions to acquire another of the primary servicers, Great Lakes Educational Loan Services, Inc. The two companies have been working for some time on a project to develop a servicing platform which they call “GreatNet.” We suspect it has been developed with “NextGen” in mind.

The current request for information

On December 11, 2017 ED posted a Request for Advanced Market Research Information. The announcement states,

Through this initiative, FSA will create world-class, mobile-first, mobile-complete, omni-channel engagement capabilities and a state-of-the-art technical infrastructure. The new environment will increase awareness and understanding of Federal student aid opportunities and responsibilities, improve operational flexibility, and enhance cost and operational efficiency, producing better outcomes for customers and taxpayers. FSA anticipates commercial solutions will be necessary to meet the objectives of this vision.

The 18-page posting includes the diagram below, and states that the initial focus is on the area highlighted in dark blue. Of note to insideARM readers is that to the right of this area, there are “Default Management Collection System” and “Recovery” placeholders, suggesting the vision is that private collectors will ultimately use the same system as servicers. This would definitely be a win for borrowers.

 

You can view the full Request for Advance Market Research Information here.

Additional information from the notice

This is not a solicitation. No award will be made based on the information received in response to this request for advanced market research. Please note that the responses received may be subject to release if a Freedom of Information Act (FOIA) request is received. 

Responses are due by 2 pm Eastern on Thursday, January 4^th, 2018 to MPDSETeam@ed.gov.

Interested firms are strongly encouraged to register as an “Interested Vendor” on the Federal Business Opportunities website (www.fbo.gov) in order to receive timely updates regarding this initiative.

 

The far-fetched “reverse Avila” claims continue to crumble in New York district courts. On November 15, 2017, Judge McAvoy of the Northern District of New York dismissed a reverse Avila claim, which alleged that the Avila disclosure was required on a letter due to pre-judgment interest that may accrue on the account as prescribed N.Y. C.P.L.R. § 5001.  The case is Altieri v. Overton, Russell, Doerr, and Donovan, LLP (2017 WL 5508372). 

You can read the decision here.

Note: The decision also contains a discussion on a separate claim, but this summary discusses only the reverse Avila claim. 

Background

Overton, Russell, Doerr, and Donovan, LLP (“Overton”), a law firm, was hired by Bank of America to collect on an outstanding debt owed by plaintiff Christina Altieri. Overton sent a collection letter to Altieri that contained a balance but did not contain the Avila safe harbor disclosure. 

Altieri, represented by consumer attorney Mitchell Pashkin, filed a suit against Overton claiming, among other things, that due to pre-judgment interest prescribed by New York law, the letter violated the FDCPA by not including a disclosure that interest may accrue.  

Overton moved to dismiss the complaint.

Decision 

The court granted in part and denied in part the motion to dismiss. Of the six causes of action in the complaint, the court dismissed five causes of action with prejudice. The court denied dismissal of one cause of action because Overton did not address it sufficiently in the motion to dismiss. However, the court granted defendant leave to file another motion to dismiss for that claim, signaling the court’s intent to dismiss the complaint in its entirety. 

In the discussion on the reverse Avila claim, the court recognized that pre-judgment interest is speculative – a conditional future event that can only be triggered by certain actions. The court ruled that because of the conditional nature of pre-judgment interest, the balance included on the letter at the time the letter was sent was not false or misleading. 

The court, citing the U.S. Supreme Court case Ashcroft v. Iqbal, 556 U.S. 662, also dismissed two (and hopefully soon three) causes of action as “unadorned, the-defendant-harmed-me-accusations that lack factual content that allows the Court to draw the reasonable inference that Defendant is liable for the misconduct alleged.”  

Following the Decision 

Overton filed its subsequent motion to dismiss on the same day the decision came out. The hearing is set for December 22 before Judge McAvoy. 

Conclusion

Debt collectors plagued by the reverse Avila claims from the frequent-filer plaintiffs’ attorneys are slowly catching their breath. District courts throughout New York are making reasonable decisions on the reverse Avila claims for accounts that are no longer accruing interest.  The last-ditch, far-fetched reaches for Avila liability against debt collectors is failing.  

Unfortunately, it was a very costly effort from many in the industry to get to this point. The inequity of the fact that agencies get no financial recourse for successfully defending such meritless suits while consumer attorneys – not the consumers – profit by bringing them in droves is a conversation that deserves the light of day. The industry’s gratitude extends to agencies and firms such as Overton, and many who continue to defend these reverse Avila claims, for fighting the good fight.

CHAMPLIN, Minn. — Once again, Summit A•R (Summit Account Resolution) is helping to keep the Holidays bright for local families in need that are affiliated with CROSS Food Shelf. Located in Champlin, MN, Summit A•R is a well-established Minnesota Collection Agency and full service Revenue Cycle Management Company that has been in business since 1996.

In keeping with their ongoing commitment to the community, the staff and ownership’s  donations helped to impact 300 local children who will each receive a Christmas stocking full of goodies and toys as well as tooth brushes, tooth paste, etc. The staff at Summit A•R also donates it’s time on the day the gifts are distributed by helping the families with the stockings and gifts.

“It’s just a great day for our staff to be able to help make a difference” said Tim Turner, President of Summit A•R. “The goodness and generosity of our employees always touches me… collection agencies are made up of truly good people doing a much needed job and it’s great to be able to show our community this”.  Toni Olson, a Director from CROSS, had this to say: “As always, Summit A•R has answered the call in our time of need at the holidays.  We would like to sincerely thank them for their time and generosity.”

About Summit A•R 

Founded in 1996, Summit A•R (Summit Account Resolution) is a national collection agency serving health care, commercial, consumer and many other industry segments. Their focus is to “Preserve Human Dignity” with their “P.H.D.” collection philosophy. They are members of the ACA, IACC, AAHAM and BBB among other local and national organizations.  888.222.0793 or SummitCollects.com

The following is a profile of just one of the thousands of revenue cycle leaders at healthcare providers across the U.S. I’d like to thank Amy Bigbee for generously offering her time to provide her insights. If you are a revenue cycle professional at a healthcare organization and would like to participate in a profile like this, please contact me. I would love to hear from you.

—-

What’s your name, organization & position? 

Amy Bigbee, Innovative Practice Services, McKesson Specialty Health

What’s your role at McKesson Specialty Health?

I solve revenue cycle issues for our customers in specialty medical practices like oncology, gastroenterology, neurology and rheumatology as a part of our consulting group, Innovative Practice Services. My work centers on revenue cycle, but we also have billing and coding specialists, payer negotiation experts and experts on payer initiatives like the Merit-based Incentive Payment System (MIPS), the Oncology Care Model (OCM), the Medicare Access and CHIP Reauthorization Act (MACRA) and others.

How did you land in the revenue cycle world?

I fell into it, as many do. I worked for a dentist, and loved the revenue cycle aspect of my job. I transitioned to medical revenue cycle. I’ve been doing this for about 20 years, and I love it. I’ve worked within practices, and with a large multi-specialty organization with practices all over the nation with various specialties. I’ve been with McKesson Specialty Health’s Innovative Practice Services for almost two years. The culture here is incredible.

What would you say drives your work?

I’m a cancer survivor, so it’s really an honor to support oncology practices.

I’m also very interested in the puzzle of the revenue cycle. Patient collections is a critically important piece of this puzzle. With so much government change underway, and high deductible plans gaining in popularity, we absolutely must address what this all may mean for medical practices. We have to get better at customer service, not just collections. Physicians don’t want to ask for money, but they do want to continue to treat patients, so they need to optimize their flow of revenue. It’s a fine line to walk. Then, there is the advent of value-based care. A portion of value-based care is patient satisfaction. These surveys, in the future, will affect physician reimbursement. We see this phenomenon far and wide today: People love their physicians, and they dislike dealing with the physician’s staff. This isn’t just something to observe and shake off, because it can affect the bottom line of a practice. As an industry, we have to address what’s missing in customer service and find processes and protocols to make patients happy with the whole experience. It’s part of this idea that we’re providing continuity of care, and this will need to also extend to the revenue cycle. It’s an idea that has to penetrate the healthcare collections industry as well.

What role is McKesson Specialty Health playing in this evolution?

We’re a drug distributor at heart, and that access gives us a panoramic view of the hospital and physician practice space that is valuable. Of course, we see the obvious: Practices are making slimmer and slimmer margins, but they’re seeing the same number of patients. In my role at McKesson Specialty Health, I come in to look at ways these practices can improve their current processes to make them more efficient. We offer this service that’s ancillary to the distribution of the medication, but it’s important work because when practices function well and work smart, it’s good for everyone.

We’re bringing best practice intelligence to the table every day, including methodologies like Lean Six Sigma. We look to clear roadblocks. I go into the practice and audit it. I walk through the practice exactly as a patient would, and I sit with staff at each moment of the revenue cycle to identify ways to streamline, identify meaningful benchmarks and enhance what’s there with best practices.

Can you share your “greatest hits” in terms of healthcare revenue cycle best practices?

With pleasure! I’d say virtually any practice can benefit from these guidelines:

1. Verify patient demographics. If you don’t have the capability, get it through a vendor relationship.
2. Verify patient insurance before the appointment. Do this 48-72 hours before the appointment, so that if there is a problem, an error or a missing referral, it can be resolved before the patient arrives.
3. Examine your “days to bill.” How long does it take you from the date of service until a clean claim can be filed? Aim for 24-48 hours after the encounter. Decreasing your days to bill can have a huge impact on working capital.
4. Spend the money on a financial counselor. The value financial counselors bring easily offsets the extra salary on the payroll. With physician practices, most don’t want to turn patients to collections, so we recommend having a financial counselor in the practice to start working with the patient before treatment starts. Let physicians worry about medication toxicity, and financial counselors can address the financial toxicity of the clinical experience, which can be equally detrimental. Part of a financial counselor’s work is education, and part of it is determining eligibility. The goal is to capture money up front, or else solidify a payment arrangement. Patients have a better experience when they know what to expect. They don’t need anxiety over the financial aspect, and neither does the medical practice.
5. Partner with a patient finance vendor. Most practices still keep the risk of non-payment in house. Very few offer patient financing options to bridge the pay gap. But with drug reimbursements down, and patient responsibility accounting for 18-35% of the specialty practice revenue, we need to be better at getting patient money in the door. The good old days when you could make an attempt to collect and then say “Oh it’s patient money, we’ll just write it off…” are long gone, and they’re never coming back. You can’t afford to write off patient revenue if you want to still treat patients.
6. Don’t be afraid to work with a collection agency, but find a good one. If you only want soft collections, be sure your agency of choice understands what that means to you. Practices need to consider some dicey situations, like, if a patient goes to collections, are they discharged from the practice? Or do they still keep coming for treatment, incurring more debt? These issues are much more complex and delicate than collecting on a bad car loan or a credit card. Not every collections agency understands the nuance in practice.

What’s your revenue cycle goal with every practice you visit?

I’m there to get the revenue cycle as tight and clean as possible so that there is ultimately no need to send anyone to collections. Accounts receivable over 90 should be zero—that’s the ultimate goal. Realistically, I’m looking for:

1. Days to bill: 2 or less
2. Days to payment: 20 or less
3. A/R over 120: 9% or less
4. Auto charge capture rate: 99%
5. Clean claim rate: greater than 95%

I want money in the door and a healthy stream of working capital, so that the practice can continue to treat patients and get them well.

If you weren’t doing this, what would be doing?

I love helping people, so it would have to be something in healthcare.

What do you love beyond the revenue cycle?

I’m a Texas girl, so I like to shoot at the gun range. I also have two nieces and a nephew whom I adore. The oldest is a flight attendant, and I have the goal of being a passenger on one of her flights. My nephew is at Texas A&M, and my youngest niece is a high school student, and she’s passionate about FFA (Future Farmers of America). She is all about the heifers right now.

Anyone you’d call your biggest influence?

Gabe Torres, the director of Innovative Practice Services, has been an awesome mentor. He helped me stretch out of my comfort zone. He’s brilliant and lets me bounce ideas off of him.

Last week, on the day of the deadline to submit comments, the Consumer Financial Protection Bureau (CFPB) quietly withdrew its proposal to conduct a consumer survey about debt collection disclosures. 

The CFPB’s plan – originally proposed earlier in 2017 – was to conduct a web-based survey of 8,000 individuals as part of its research on debt collection disclosures, and to use the information gathered from the survey “to help assess whether it can improve the clarity of forms used during debt collection to facilitate consumer decision making,” as well as to help inform the development of future consumer disclosures. 

A first round of comments on the proposal closed in June. insideARM wrote this article about the survey and those comments, highlighting one by AFSA (the American Financial Services Association). The gist of their submission was that – just so long as the survey relates only to third party collectors — they are pretty much fine with it. The association said the biggest problem they see with the CFPB’s approach to debt collection is that it treats collectors and creditors the same way. They suggested this is not appropriate because of the difference in motivation to treat customers with respect.

Another comment, from the American Bankers Association, was critical of the proposal because it did not contain enough information to provide meaningful comment. Indeed, the CFPB went back to the drawing board (or at least the tweaking board), revised the proposal, and re-opened a comment period, which ended on December 14, 2017 — the same day the proposal was withdrawn. ACA International also submitted comments in August on the original proposal, and on December 14 on the revised proposal. The association told its members last week,

“In ACA’s view, given the CFPB’s cursory dismissal of comments submitted by ACA regarding significant flaws in the Bureau’s collection request, it appears the CFPB failed to meaningfully consider the input it received in response to its original notice and instead approached the important PRA process as a mere check-the-box exercise.”

insideARM Perspective

It was always a little odd that the Bureau intended to release a proposed debt collection rule prior to conducting this survey. Until Cordray’s departure just before Thanksgiving, it was widely believed the release of a NPR (Notice of Proposed Rulemaking) was imminent. In July, a CFPB announcement specifically noted,

“Building on feedback received through the SBREFA panel, we have decided to issue a proposed rule later in 2017 concerning debt collectors’ communications practices and consumer disclosures. We intend to follow up separately at a later time about concerns regarding information flows between creditors and FDCPA collectors and about potential rules to govern creditors that collect their own debts.” (emphasis added)

Why make a rule regarding disclosures before planning to do research on the effectiveness of disclosures?

Anyway, now it may be moot. Or maybe not.

Acting Director Mick Mulvaney has put a 30-day hold on all rulemaking (that’s about 1/2 way through now) as he gets his arms around everything currently on the bureau’s plate. It’s not surprising that he would pull the plug on a survey expense. Meanwhile, former CFPB Director’s pick to temporarily lead the bureau (until President Trump can get an appointee approved in the Senate), Leandra English, will have another hearing this Friday related to her lawsuit claiming to be the rightful acting director. On November 28 a District Court judge denied her request for a temporary restraining order to block Mulvaney from taking the job. She has since filed for an injunction in Federal Court. Unlike a restraining order, an injunction can be appealed if denied. English’s attorney, Deepak Gupta, said about the denied TRO,

“I think everyone understands this court is not the final stop, this judge does not have the final word on what happens in this controversy.” 

Should the judge rule in her favor on December 22, we may see another very confusing day (or longer) at the CFPB, with many wondering who is in charge — and whether everything Mulvaney has done might soon be reversed.

NORFOLK, Va. — PRA Group, Inc. (Nasdaq:PRAA), a global leader in acquiring and collecting nonperforming loans, announced that the company and its employees have pledged $50,000 to the American Red Cross in support of its ongoing hurricane and earthquake relief efforts.

PRA Group pledged to match individual employee donations and launched an American Red Cross corporate microsite to facilitate employee giving. The $50,000 donation was raised through the Company’s matching gift program and will help provide comfort and support to the victims of Hurricanes Harvey, Maria, and Irma, as well as the Mexico Earthquake.

“PRA Group employees across the country are passionate about giving back to the communities where we live and work and their generosity shows, especially in times of natural disasters and other emergencies,” said Kevin Stevenson, president and CEO of PRA Group. “Partnering with the American Red Cross is one of the many ways we reinforce our PRA CARES core values every day.”

PRA Group has supported the American Red Cross through onsite mobile blood drives and charitable donations for more than 10 years. PRA Group’s charitable giving supports the American Red Cross’s life-saving mission of providing about 40 percent of the nation’s blood, as well as disaster preparedness and relief, health and safety classes, and services to the armed forces.

About PRA Group
As a global leader in acquiring and collecting nonperforming loans, PRA Group returns capital to banks and other creditors to help expand financial services for consumers in the Americas and Europe. With more than 4,500 employees worldwide, PRA Group companies collaborate with customers to help them resolve their debt. For more information, please visit www.pragroup.com.

According to the just-released Compliance Professionals Forum report on convenience fee use, over three-quarters of the industry have chosen not to assess convenience fees – primarily because they have no appetite for the compliance risks associated with them. (These are mostly centered on UDAAP concerns: Can an agency prove that they are agnostic when applying a convenience fee? If one consumer argues out of the fee, can you legally charge it to the next consumer?) Those who still charge aren’t necessarily eager to do so; many agencies surveyed charge a convenience fee either because they cannot stay profitable without doing so, or because their clients have made it a requirement for collecting their paper.

The top reason why firms don’t charge convenience fees? Here they are, listed from most common to least common reasons:

1. The risk exposure is too high.
2. We absorb the cost because we consider it a cost of doing business.
3. We can’t find a compliant way to pass along the cost.
4. Our clients disallow it.

The full study – complete with infographics, narrative responses to survey questions and convenience fee policies – is available to Compliance Professionals Forum members, who can get it here.

Not a member? Find out how to join right here.

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