Consumers encouraged to communicate with financial services providers and debt collectors to help manage payments. Editor’s Note: This content is available for members only.
3/27/2020 11:00
The North American Collection Agency Regulatory Association (NACARA) issued the following summary on COVID-19 regulatory and consumer guidance.
In order to minimize the spread of the COVID-19 virus, governments at all levels have taken actions and imposed restrictions that may impact the collection of debt. Financial regulators are committed to providing timely updates and information to consumers and commercial debtors, financial institutions (including collection agencies), and fellow regulators on actions taken to support communities during this health crisis.
For Consumers and Commercial Debtors
Actions taken in response to COVID-19 may have impacted your income making it difficult to repay accounts held by debt collectors. If you are concerned about your ability to make timely payments or otherwise meet your debt obligations, contact your collection agency as soon as possible. While many people and businesses may find this difficult, keep in mind that a collection agency can’t offer help without communication. Payment assistance, including deferral of payments, or other mitigation options may be available.
For Regulated Entities
NACARA encourages collection agencies, whenever feasible, to mitigate the impact of this health crisis on consumers and commercial debtors. At a minimum, regulated entities should take reasonable steps in an attempt to offer assistance to all consumers and commercial debtors who have suffered a loss of income due to this emergency or have otherwise experienced impacts that could affect their ability to repay their debts.
Applicants for licensure should be aware that while NACARA’s member agencies are taking steps to ensure that operations continue with as little interruption as possible, application turnaround times at some agencies could be impacted, and agencies appreciate your patience and understanding.
For Regulators
NACARA encourages member agencies to consider the impact of COVID-19 in their dealings with regulated collection agencies. Many of these regulated entities are impacted by state laws and regulations that limit the ability of employees to work remotely. Furthermore, executive agency orders in response to COVID-19 may limit their ability to serve their clients and debtors altogether.
NACARA strongly encourages regulators to offer guidance on this topic if you have not already done so.
Additionally, it is imperative that regulators be sensitive to the fact that collection agencies may be facing significant hardship in supporting full operations and serving customers during this health crisis (especially given the size, scope, and complexity of operations from collection agency to collection agency). To that end, regulators may wish to consider offering regulated entities, when reasonable, extended deadlines for responses to agency requests, whether for licensing, examination, or other purposes. An increase in remote work by a regulated entity’s staff could impact its ability to retrieve documents, as well as the scheduling of meetings and conference calls. Flexibility in reporting requirements should also be considered, and regulators are urged to be lenient and not take unnecessary punitive action if reporting due dates are not met. NACARA encourages regulators to work cooperatively with regulated entities whenever possible.
Read the complete guidance from NACARA here.
For more information on how the ACA Licensing staff can assist with your licensing needs, please contact us at [email protected] or call (952) 926-6547.