A Powerful Group Aligns Against the ARM Industry

Last week, we ran a press release under the headline “NY Statewide Coalition Urges Legislature to Curb ARM Industry Abuses.” The headline was nothing terribly out of the ordinary; the ARM industry is used to facing opposition from coalitions of concerned citizens and the like.

And to be honest, the content of the release was not startling. It was an announcement in support of new laws in New York that would make it harder for debt buyers to file suit against consumers. While the legislation is misguided, it should be expected that various consumer groups would support such a measure. The release mentioned a group called the New Yorkers for Responsible Lending coalition.

What is surprising, however, is the identity of the actual organization that distributed the release. The above-named coalition did not send it out. It was released by the New York chapter of the American Association of Retired Persons (AARP). This fact should be cause for concern to ARM professionals engaged in policy lobbying.

As far as special interest groups go, few have the clout and power of the AARP.  The group claims over 40 million members, and while they all have disparate voting affiliations, the pressure the group can bring to bear on lawmakers is enormous.

In my recollection, there has not been a more powerful membership group to align itself directly against the ARM industry.

The National Treasury Employees Unions, itself quite influential, successfully lobbied the IRS to drop private debt collection vendors from its recovery strategy. But the NTEU is nothing compared to the AARP.

The press release distributed by the group used anecdotal evidence culled from the experiences of two retirement-age New Yorkers to paint a terrible picture of the entire industry. So the group appears to be putting all of its PR might behind the effort.

Ultimately, this impacts regulations in just one state, albeit a rather large one. But it should be noted that an extremely formidable group has aligned directly against ARM interests and that further pressure of its kind may be forthcoming.