Modern Communication: ACA CEO Mark Neeb Discusses Industry Priorities at CFPB Debt Collection Town Hall
While ACA International welcomes the overall clarity the proposed FDCPA rule will provide, the association’s goal is to continue to work with the bureau to ensure the final rule reflects needs of businesses and consumers to communicate effectively.
5/10/2019 10:00 AM
Following the release of the Consumer Financial Protection Bureau’s historic Notice of Proposed Rulemaking for the Fair Debt Collection Practices Act, ACA International CEO Mark Neeb was among a carefully selected panel of experts tapped to participate on an informative panel charged with discussing the rule.
Neeb, along with Leah Dempsey, vice president and senior counsel of federal advocacy, and Karen Scheibe Eliason, vice president and senior counsel, were in attendance as they prepared to issue comments on the proposed rule. Many ACA members were in attendance.
“The accounts receivable management industry has been seeking clear regulatory guidance on the FDCPA since its enactment in 1977. Notably, we are one of the first industries to welcome new rules from the CFPB and have worked closely with the bureau since its inception on our shared goal of helping consumers carefully and efficiently resolve debts,” Neeb said during the panel discussion.
In its current state, the proposed rule includes:
- Certain disclosures, such as an itemization of the debt and plain-language information about how a consumer may respond to a collection attempt, including by disputing the debt.
- Methods by which debt collectors may lawfully use newer communication technologies, such as voicemails, emails and text messages.
- Methods by which collectors may provide required disclosures electronically, for example, by email or text message.
- Call frequency limits of no more than seven attempts by telephone per week; prohibiting call attempts within 7 days of a telephone conversation.
- Out-of-statute debt collection, by prohibiting suits and threats of suit on time-barred debts and requiring communication with the consumer before credit reporting.
Providing added clarity and highlights on the path that led to the proposed rule, CFPB Director Kathy Kraninger spoke on the bureau’s goal for regulating the debt collection industry and protecting consumers’ rights and communication during the town hall.
“Clear rules of the road where consumers know their rights and debt collectors know their limitations are a step towards fulfilling the intent of the law,” Kraninger said. “Debt collection is an important part of the credit ecosystem, and there is no doubt that a healthy credit ecosystem is vital to the lives of most Americans.”
She described the challenges of debt collection and balancing the rights of consumers with modern technology in the proposed rule as well as media coverage since its release, particularly regarding use of email and text messages to communicate with consumers.
“The FDCPA prohibits collectors from harassing or abusing consumers and engaging in unfair practices. The proposed rule would provide clarity for consumers and collectors on how the law applies to new technology, particularly email,” Kraninger said, adding that the proposal makes clear that collectors must honor consumers’ requests to stop certain forms of communication and provide an unsubscribe option to emails, for example.
Kraninger noted how communication has come a long way since the FDCPA was enacted, but the law has not.
“Some of the friction in the market can be attributed to the fact that the governing statute in the market is more than 40 years old,” Kraninger said. “The FDCPA is from 1977. Think about that. That’s the year the first ‘Star Wars’ movie was released.”
Ultimately the proposed rule is designed to address persistent issues in debt collection, Kraninger explained, while providing a clear interpretation of the law when to date, its interpretations have been largely determined by the courts.
“This has created great uncertainty for both consumers and collectors,” Kraninger said. “Our newly proposed rules are established in common sense.”
Keeping in Contact
Panelists, led by Tom Pahl and David Silberman, both CFPB associate policy directors, discussed their initial reactions to the proposed rule, plans for feedback to the bureau and importantly—the impact the proposed call caps and disclosure notices, for example, would have on collectors’ current policies and procedures.
“Creating safe harbors is beneficial to both consumers and the industry so that everyone knows what the rules are and how to play by them,” Neeb said during the discussion. “We don’t believe that one size fits all in debt collection. The number of times needed to connect with the consumer may vary depending on the market. Arbitrarily limited phone contacts does not really serve consumers in our mind.”
Additional industry advocates speaking on the panel, Stephanie Eidelman, CEO of iA Institute, and Jan Stieger, executive director at RMA International, representing debt buyers, concurred.
“The importance of consumer communication; the ability of the collector to communicate with the consumer is paramount to resolving the issue,” Stieger said. “Limiting that communication is difficult and often harmful to the consumer.”
Eidelman also noted the change in consumers’ privacy expectations since the original FDCPA was enacted coupled with their expectations for transparency when debt collectors are trying to reach them by phone, email or mail.
“There is a new reality today where people are really demanding transparency [and] at the same time they’re demanding privacy in a way that’s difficult to balance.”
In response, Neeb said while the bureau continues to consider call caps as well as voice mail requirements in the proposed rule; the ability to communicate with consumer via a phone call is critical.
“The ability to communicate live with a consumer really helps all problems,” Neeb said. “At the same time, there is no incentive for a debt collector to indiscriminately call and call and call and waste time and efficiencies. We have the responsibility to not to make too many calls … we just urge consumers to pick up the phone and have a conversation with the collector.”
Concluding the discussion, the panelists and CFPB leadership also reviewed components on time-barred debt in the proposed rule and the definition of a debt collector in the original version of the FDCPA compared to today.
“The subject of time-barred debt is pretty complicated for many reasons, not the least of which being because there are different statutes of limitations in different states,” Neeb said. “To me it almost seems like a state issue versus a federal issue.”
Once the proposed rule is published in the Federal Register, the public has 90 days to submit comments to the CFPB. It will be in effect one year from the date it is finalized.
“ACA continues to analyze the proposed rule and plans to provide comprehensive formal comments in response to it. We will be reviewing them through the lens of supporting a fair, objective, and well-supported bureau rulemaking,” Neeb said.
He also urged the bureau, throughout its continued work in finalizing the rule to continue collaborating with the FCC on issues such as call blocking and labeling.
“Thank you again for the opportunity to participate in this important discussion today, as we continue to work towards our shared goal of helping consumers achieve the most successful outcome possible when facing an unpaid debt,” Neeb said.
Members are encouraged to review the proposed rule (text of rule starting on page 447). As previously noted, in the coming days and weeks, ACA will be reaching out to its membership for reactions and feedback on the proposed rule. ACA will continue to work closely with the CFPB to advocate on behalf of the accounts receivable management industry and to ensure that the final rule will be beneficial for the debt collection industry and consumers alike. Please stay tuned to ACA’s Daily Newsletter for more information.
Read in-depth coverage of the proposed rule by Compliance Analyst Andrew Pavlik.
Pictured above, ACA International had strong representation with staff and members in attendance at the CFPB’s Debt Collection Town Hall on May 8 including LJ Ross Associates Inc. Compliance Specialist Nichole Clemons; LJ Ross Associates Inc. Chiefe Operating Officer Rebecca Roberts-Stewart; ACA Board President and President of Gulf Coast Collection Bureau Inc. Jack Brown III; President of Allen Daniel Associates Inc. Dan Desatnick, IFCCE; ACA International Vice President and Senior Counsel Karen Scheibe Eliason; Shareholder at Weltman, Weinberg, Reis Co. LPA, Eileen Bitterman; President of BCA Financial Services Inc. Leslie Bender, IFCCE, CCCO; ACA International CEO Mark Neeb; ACA International Vice President and Senior Counsel of Federal Advocacy Leah Dempsey and Compliance Program Manager at Emergent Business Group Inc.Charles Riter Jr. CCCO.
CFPB Director Kathy Kraninger, center, with ACA leadership including Vice President and Senior Counsel Karen Scheibe Eliason; CEO Mark Neeb; ACA Board President Jack Brown, president at Gulf Coast Collection Bureau; Shareholder at Weltman, Weinberg, Reis Co. LPA Eileen Bitterman; ACA Vice President and Senior Counsel of Federal Advocacy Leah Dempsey; and ACA Board Member Rick Perr, attorney at Fineman, Krekstein and Harris P.C.
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