The Fair Labor Standards Act (“FLSA”) provides minimum wage requirements and overtime pay for non-exempt employees, but the FLSA also exempts executive, professional, administrative employees from receiving 1.5X overtime compensation.

Using the authority granted to it under the FLSA, the federal Department of Labor (“DOL”) may raise minimum weekly salary thresholds as one predicate to proving an employee’s exemption from OT status.

In 2019, the minimum salary/week to keep an exempt status was raised to $684 per week ($35,568 annually). On July 1, 2024, the new minimum was increased to $844 per week ($43,888 annually).

Employers now face the latest increase to $1,128 per week ($58,656 annually), which is scheduled for January 1, 2025. With such a material increase for 2025 New Year, court challenges have been filed in Texas and Tennessee.

Based on case history, it appears unlikely that these challenges will be successful. Last month, on September 11, 2024, in Mayfield and R.U.M. Enterprises, Inc. v. U.S. Dep’t. of Labor, the federal Fifth Circuit (covering LA, MS & TX), analyzed the now almost 5-year-old 2019 salary increase. The appellate court confirmed that the DOL has the express authority to impose a minimum salary for white collar employee exemption under the FLSA.  

The September 2024 Mayfield decision is notable: the Fifth Circuit joined 4 other circuit courts in finding that the DOL has the authority to raise the white-collar salary threshold. The Fifth Circuit analyzed the challenges to DOL’s authority and concluded that “setting a minimum salary level for the . . . [“white collar”] exemption is within DOL’s power.” No. 23-50724, 2024 WL 4142760, at *7.

Though the 2025 increase has yet to face a direct legal challenge, the September 2024 Mayfield decision evaluating the DOL’s 2019 increase offers near identical support to allow the January 2025 salary raise. As we warned back in July this year employers must continue to prepare for the increase. Especially considering the nearly $15,000 salary increase, we urge a careful review so that employees are properly paid and classified.

MENLO PARK, Calif. — Latitude by Genesys, a leading debt collection software solution, is dedicated to positively impacting the communities where its employees and executives live. Recently, Latitude donated to the Food Bank of Northeast Georgia, a non-profit organization committed to alleviating hunger and addressing food insecurity across the region. This donation is aimed at helping the Food Bank provide essential meals and resources to individuals and families in need, particularly as the holiday season approaches.

“Every quarter we look at new ways to support our community. As the holidays are rapidly approaching, we thought it would be best to contribute to the Food Bank. It is our small but direct way for Latitude by Genesys to support those facing hardship,” said Cris Bjelajac, Senior Director of Business Operations at Latitude. “We are proud to be part of an effort that not only addresses immediate food needs but also supports long-term community health and well-being.”

Changing Lives with the Food Bank of Northeast Georgia

The Food Bank of Northeast Georgia has been a vital resource for the community since its founding. Serving as a hub for collecting, storing, and distributing food, the organization works with partner agencies across the region to ensure that those facing hunger have access to nutritious meals. Their efforts go beyond just food assistance—they strive to create a more sustainable solution to hunger by providing educational resources and programs aimed at building a stronger, more self-sufficient community.

With a mission to distribute millions of pounds of food each year to families and individuals in need, the organization ensures that no one in the region has to face hunger alone. Through partnerships with local food pantries, shelters, and other community organizations, the Food Bank is able to reach a wide range of people, including children, seniors, and individuals experiencing homelessness.

Their work is especially critical during the holiday season, a time when food insecurity often rises. The Food Bank’s dedication to providing holiday meals and other essential food items helps ensure that families can enjoy this special time of year without the stress of wondering where their next meal will come from. To help the Food Bank’s mission, they have set up a virtual food bank donation where people from all walks of life can donate as little as a dollar to contribute three meals to those in need. 

Latitude’s Continued Commitment

Latitude by Genesys recognizes that being a successful company also means giving back to the communities that have supported them. Their recent donation reflects their commitment to social responsibility and to helping those who need it most. From charitable donations to hands-on volunteer work, Latitude actively seeks opportunities to make a positive difference.

About Latitude by Genesys

Latitude by Genesys® is a comprehensive debt collection and recovery solution for managing all receivables processes. It provides collectors with the tools to manage the collection and recovery process. Latitude deploys a true zero-footprint, browser-based environment for collectors and agents. Since 1996, Latitude’s focus has been to provide forward-thinking, attractive solutions to the business needs of different people and companies in the accounts receivable management (ARM) space. Acquired by Genesys in 2016, Latitude is continually growing, innovating, and reshaping ARM companies’ and their consumers’ technology expectations and customer experiences.

FOLSOM, Calif. — AgreeYa Solutions, a global leader in software, solutions and services is excited to announce its participation in the 2024 National Creditors Bar Association (NCBA) Connect conference, to be held from October 21st to 24th at the Sheraton New Orleans Hotel. At Booth #32, AgreeYa’s experts will be available to discuss how their innovative Cogent suite is revolutionizing debt collection processes for organizations worldwide.

Throughout the event, AgreeYa’s product specialists will provide insights into the advanced features of Cogent, CogentCollect, and CogentConnect, showcasing how these solutions enable businesses to automate, optimize, and streamline their debt management processes (including managing collections and receivables), while ensuring compliance with evolving regulatory requirements.

Cogent Suite of Advanced Debt Collection Software Solutions

Cogent serves as the core of the suite, offering an award-winning, AI-powered debt collection software and litigation management solution. With hyperautomation capabilities and a robust rules engine, Cogent empowers organizations to manage collections and receivables, ensuring compliance with federal and state regulations such as FDCPA, CFPB, and Reg F. Whether deployed on-premises or in the cloud, Cogent provides unparalleled flexibility and efficiency, making it a trusted solution for agencies and law firms.

The suite also includes CogentCollect, a smart, subscription-based SaaS that enhances collection processes with omnichannel management, integrated payments, and claims management. Built for fast onboarding and scalable to meet business needs, CogentCollect helps organizations reduce manual efforts and increase recovery rates through automation.

Meanwhile, CogentConnect, a self-service consumer debt collection software portal, empowers consumers to take control of their debt repayment journey. Cloud and mobile-enabled for seamless, anytime-anywhere access, CogentConnect facilitates payments, document uploads, and real-time notifications. This user-centric platform reduces collection costs and follow-up efforts, while boosting compliance and improving customer satisfaction.

“Cogent is continuously evolving to meet the needs of organizations in the ever-changing debt collection landscape. Our suite of solutions, supported by our Managed Services and prompt customer support, provides cost-effective and highly configurable tools that automate and optimize collection processes,” said Arindam Ray Chaudhury, Product Owner, AgreeYa Solutions.

AgreeYa’s Cogent suite has been helping over 200 collection agencies, law firms, asset-buying companies, creditors, vendor affiliates, and ARM professionals to streamline operations, improve compliance, and reduce costs.

Visit AgreeYa Solutions at Booth #32

Visitors at 2024 NCBA Connect are encouraged to visit Booth #32 for live demos, real-world case studies, and the opportunity to discuss their unique process challenges with AgreeYa’s experts. For more information, visit www.agreeya.com.

About AgreeYa Solutions
AgreeYa Solutions is a global leader in software, solutions, and services, delivering innovative technologies that enable digital transformation. With a focus on AI, automation, and cloud-based solutions, AgreeYa helps organizations optimize operations, enhance compliance, and achieve sustainable growth.

The world of debt collection is never at a loss for updates, but separating the important stuff from the background noise isn’t always easy. At insideARM, our goal is to help you answer those questions. Every Monday, we bring you a recap of the need-to-know highlights to help you stay informed.

To start off, we shared news of CFPB Director Rohit Chopra raising concerns about national security risks posed by the misuse of personal data. In his September 19 remarks, he emphasized how data brokers selling sensitive information could be exploited by foreign actors, referencing President Biden’s Executive Order aimed at preventing this. Chopra also discussed the FCRA’s role in consumer data protection, noting many companies’ non-compliance with the law. To strengthen protections, the CFPB is proposing new rules to ensure data brokers follow the FCRA, which will give consumers more control and reduce risks like financial scams and identity theft, especially as AI technology grows. 

On Wednesday, we reported that an Illinois federal judge dismissed a class action lawsuit against two Midwestern banks for allegedly failing to provide repayment disclosures to borrowers, a case notable for the CFPB’s defense of the banks. The plaintiff, Jose Lopez, claimed the banks violated the Truth in Lending Act by not including repayment timelines on statements for his “Vault” line of credit. The CFPB’s amicus brief clarified that since 2010, such disclosure requirements apply only to credit card accounts, not open-end credit lines like Lopez’s. The court agreed, ruling the banks were compliant with Regulation Z. 

On Thursday, we reported the FTC reaching a $48 million settlement with Invitation Homes, a large single-family rental home operator, over allegations of deceptive practices in rental advertising, security deposit management, credit reporting, and eviction processes during COVID-19. The settlement enforces new standards for disclosing all mandatory fees in rental pricing, mandates fair security deposit practices, and requires debt validation for credit reporting. It also ensures tenants facing eviction are informed of available assistance programs. This groundbreaking settlement highlights increasing federal scrutiny of rental management practices, signaling more enforcement actions and litigation in the industry may follow. 

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 September 30th, 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! 

The Federal Trade Commission (FTC) announced a groundbreaking settlement with Invitation Homes, a large single-family rental home owner/operator, on September 24. The settlement, which includes a $48 million monetary judgment and substantial injunctive relief, introduces novel applications of Section 5 of the FTC Act (15 U.S.C. § 45) in excess of state and local law to: advertising rents and services, disclosing rents and fees in leasing, managing security deposits, credit reporting rent obligations, and advising residents of resident relief during the evictions process.

The settlement continues a recent trend of federal regulators’ attention to market-rate residential property management practices. For example, last November, the FTC proposed a broad trade regulation rule covering unfair or deceptive fees; after tens of thousands of comments, a final rule is expected. In April, the Department of Housing and Urban Development (HUD) released guidance about the Fair Housing Act’s application to resident screening and digital marketing practices. The Federal Housing Finance Agency (FHFA) announced in July resident notice and late fee protections tied to rental properties with Fannie Mae or Freddie Mac loans. Most recently, the Consumer Financial Protection Bureau (CFPB) focused on rental debt and the “financialization” of rent payment obligations in its September annual report on debt collection. More action by federal regulators is likely as housing remains a top issue for Americans across the country.

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Below are the key provisions of the FTC settlement with Invitation Homes, with implications for rental operations:

• Advertising and Disclosure of “Total Monthly Leasing Price” and Property Conditions

The agency alleged that consumers were misled by the failure to disclose mandatory fees for services in advertised rental prices. The settlement requires Invitation Homes to disclose, more prominently than any other pricing information, a new “Total Monthly Leasing Price” – to include all recurring mandatory fees or charges associated with the property. Further, fees or charges are to be disclosed clearly and conspicuously, and such disclosures are to include the fee or charge’s nature and purpose, amount, and whether it is mandatory. Finally, the settlement enjoins misrepresentations about property conditions, maintenance and inspection practices, and security deposit processes.

• Fair Practices in Security Deposit Management

The FTC also challenged security deposit practices, accusing the company of unfairly withholding deposits for normal “wear and tear” or for damages that existed prior to occupancy. Under the settlement, the operator must train its security deposit management professionals on applicable law, provide unit inspection records (such as photos) to residents on request, and deliver itemized statements when withholding any portion of a security deposit, outlining the specific reasons for each deduction.

• Debt Validation for Credit Reporting

Under the settlement, where a consumer gives notice of potentially erroneous charges in a debt obligation, unless the company has written verification of the debt, it is to instruct a consumer reporting agency to delete the account as inaccurate and confirm that its appointed collections agency will stop collection on the debt.

• Eviction Practices and Notice of Tenant Resources During COVID-19

Another significant aspect of the settlement addresses the company’s eviction practices during the COVID-19 pandemic. The complaint alleged that the housing provider steered tenants away from federal and state renter hardship subsidies. The settlement mandates that renters in eviction be notified of relevant rental assistance programs; also, eviction proceedings, in many cases, are to be abandoned once the resident has vacated the property.

• Ongoing Compliance and Monitoring

To ensure long-term compliance with the terms of the settlement, the respondent is subject to robust monitoring and reporting requirements over the next 15 years. The company must train its employees and contractors about the settlement’s terms, state and local rental laws, and best practices in handling resident relationships. Additionally, the company must maintain detailed records of renter complaints, property inspections, and security deposit transactions, which will be subject to FTC review.

Implications

The FTC’s leading-edge settlement is a caution to rental property operators and their vendors: increased enforcement and litigation over market-rate rental management practices brought by consumer protection agencies and private parties using unfair, deceptive, or abusive acts and practices (UDAAP) authority in the FTC Act, Dodd-Frank Act, and comparable state laws may be on the horizon. Rental housing operators and vendors will also be watching to see if the new Total Monthly Leasing Price and service advertising and disclosure concepts in this settlement are reflected in any FTC fee disclosure and description rule and in state laws.

Operationally, the FTC’s interpretations in the settlement present a useful checklist for property operators and vendors to review with counsel. Even where a housing provider’s ad disclosures and operating practices meet or exceed applicable state laws, the FTC’s novel extension of the FTC Act may appear in future enforcement and private party complaints. Thus:

• Ad Disclosures – Are rents with mandatory fees available for presentation transactionally on property websites and third-party platform advertising? Are fees and charges described and available for applicant review before an application fee is charged? Are property management services, such as maintenance services, and resident responsibilities accurately described to the consumer?

• Security Deposit Management – In practice, is sufficient documentation maintained to demonstrate damages beyond normal wear and tear and costs of repair? What details are provided to the resident on a request for documentation of charges against the deposit?

• Debt Documentation – Where a resident’s debt is provided to a collections agency for recovery, does appropriate documentation support the charges in the debt? In some cases, a debt may need to be adjusted before or after placement to reflect available documentation or a subsequent disputed item.

• Available Resident Resources – While COVID-era supplemental rental aid has been allocated and spent, many operators continue to support residents with payment difficulties by creating payment plans, offering short-term loans, and providing information about local rental aid programs. Operators may wish to increase resident awareness of these resources.

Rental housing providers deliver the housing and services consumers demand. Though federal and state consumer protection regulators do not provide affordable housing, they and private party plaintiffs can be expected to assert a growing role in rental property management practices even after the general election. Industry challenges to creative new applications of UDAAP laws can be expected. Smart property operators would do well to stay abreast of novel applications of general consumer protection laws to market-rate rental operations.

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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. 

AUSTIN, TX — The Receivables Management industry mourns the loss of a true visionary, Larry Vasbinder, founder of Second Round, who passed away unexpectedly this past weekend after post-surgical complications. Larry’s legacy is one of innovation, resourcefulness and an unwavering commitment to improving the consumer experience. His absence is deeply felt.

Starting his career in public accounting in 1990, Larry became a Certified Public Accountant and joined the tax department of KPMG Peat Marwick, furthering his interest in finance. Over the next 30 years, Larry excelled in a variety of leadership roles, including Chief Financial Officer and Chief Operating Officer, at financial services and consumer debt companies. During his career, Larry oversaw the acquisition of over 500 receivables portfolios.

“Over the years, Larry and I built not only a successful partnership, but a friendship rooted in trust, respect, and a shared vision. His innovative approach to problem solving has enabled us to assist countless consumers,” said Brian K. Williams, CEO of Crown Asset Management. “His contributions to his family, friends, the Second Round Team and the ARM Industry were immeasurable, and his legacy will live on in the selfless work he has done. We will continue to honor his memory by upholding the values and standards he set. He will be missed more than words can express.”

In 2008, Larry founded Second Round, recognizing a unique opportunity to bridge the gap between portfolio acquisitions and the burgeoning debt settlement industry. The innovative tools, techniques, and technologies that Larry and his team developed in the ensuing years have become integral to the way these financial services interact.

During this profoundly difficult time, the receivables industry community extends its heartfelt condolences and unwavering support to the Vasbinder family. Our thoughts and prayers are with Larry’s wife, Holly, his daughters Haley and Madison, and the entire Vasbinder family as they navigate this difficult time.

In lieu of flowers, donations can be made to two organizations close to Larry including Austin Metro Hockey Association and First Tee. Messages can be left for the Vasbinder family on DignityMemorial.com.

Services will be held in Austin, TX on Sunday 10/13/24. For further details about the services, please contact Sharon Huff at shuff@crownasset.com.