ARM Industry Groups Working Feverishly on Unified Response to CFPB

The trade associations representing the debt collection industry are working on the possibility of creating a unified response to the Consumer Financial Protection Bureau’s (CFPB) proposal to adopt new rules for the ARM industry.

On a joint conference call two weeks ago, key leaders from debt collection group ACA International, the American Bankers Association, the Community Bankers Association, the Consumer Relations Consortium, debt buying association DBA International, and the National Association of Retail Collection Attorneys (NARCA) discussed how to best reach a consensus on responses to the CFPB’s Advance Notice of Proposed Rulemaking (ANPR).

The industry responses are critical. The ANPR represents the best opportunity for regulators to hear directly from ARM companies in a direct way. The CFPB has signaled that it will be taking all responses very seriously.

Joann Needleman, President of NARCA and VP at ARM defense law firm Maurice & Needleman, said that the associations are currently talking and sharing information like never before.

“We are looking at a possible unified response,” said Needleman. “But we’re really looking to get on the same page right now.”

The CFPB’s ANPR consists of 162 questions, some with sub-questions, about the debt collection regulatory environment (for example: Would sharing documentation and information about debts through a centralized repository be useful and cost effective for industry participants?). The intent is for responders’ answers the questions to serve as a guide for their response.

Part of getting on the same page is individual groups assuming responsibility for questions in certain areas.

“We do not intend to answer every question in the ANPR,” noted Needleman. Instead, NARCA is focusing its response on questions dealing with debt collection litigation. Needleman said that one area the group is keen to address is providing data on collection litigation, rather than letting anecdotes serve as evidence.

All of the groups are engaging their memberships to get responses from individual companies. NARCA has been sending out surveys to its member law firms and will be launching an online portal to collect input. ACA has likewise been urging its members to use its own online tool to provide data to be used in its response.

DBA International set up a task force comprised of a cross section of its members. The debt buyers group divided the task force into subcommittees charged with addressing different sections of the ANPR. The group has also been surveying its membership to collect data related to questions it wishes to answer.

There is a sense of urgency in the process because the deadline for ANPR responses is about two months away. But the groups need responses from members well before the deadline to give them time to compile and analyze member input. ACA’s first deadline is at the end of this week (December 13).

The Consumer Relations Consortium (CRC), a new group comprised of larger ARM market participants, is organizing its response among a panel of 26 in-house general counsels and ARM defense attorneys, helmed by attorney John Rossman.  The CRC has been conducting calls with consumer groups so that all bases are covered when the response writing begins.

“The CRC approach is for our positions to be informed to the greatest extent possible by meaningful collection industry data coupled with thoughtful input from consumer advocacy groups,” said Rossman.