A look back at some of the most influential legal, advocacy and regulatory happenings in the industry covered by ACA International.
2020 was an unprecedented year for advocacy and legal accomplishments in the accounts receivable management (ARM) industry, especially given the changes during the COVID-19 pandemic. Among federal news items, the Consumer Financial Protection Bureau released its final debt collection rule, the U.S. Supreme Court issued a ruling on the bureau’s structure and is expected to issue a ruling on the Telephone Consumer Protection Act in 2021, and we advocated to successfully change several legislative proposals impacting debt collection and the ARM industry.
At the state level, hundreds of executive orders were issued in response to COVID-19, impacting debt collection agencies that needed to pivot to work-from-home operations and faced temporary closures. ACA achieved milestones in state advocacy on that front by ensuring our members’ businesses could remain open and ultimately helping shape what will be permanent laws on working from home in the ARM industry.
At the compliance level, ACA’s members have achieved significant wins in FDCPA cases supported by the Industry Advancement Fund, and our corporate counsel and compliance analysts continue to provide valuable resources preparing members to comply with the CFPB’s final debt collection rule by Nov. 30, 2021.
ACA’s news coverage in ACA Daily and Collector magazine has focused on all these milestones and accomplishments to keep members informed and showcase our state and federal advocacy and compliance efforts to regulators and lawmakers.
Here’s a recap of some of this year’s most significant and recent stories published in ACA Daily representing those topics.
House Vote on Debt Collection Legislation is Cancelled
The legislation would have extended the Fair Debt Collection Practices Act to collectors of debt owed to a federal agency and debt buyers, contrary to language in the CFPB’s final debt collection rule.
ACA International, in conjunction with members, secured an important victory on Capitol Hill Tuesday when the Stop Debt Collection Abuse Act, H.R. 4403, was pulled from the U.S. House of Representative’s scheduled votes in December.
ACA focused its advocacy efforts on ensuring that the problematic legislation should not advance in the U.S. House of Representatives.
The bill would have swept both federal agency debt collectors and debt buyers under FDCPA coverage. It also would have capped fees and interest, added time limits when collecting federal agency debts in a way that conflicted with several laws, and impeded debt collectors’ federal contracts.
Perhaps most concerning to ACA, however, is the bill would have conflicted with language already finalized in the CFPB’s rule defining “debt” and “debt collector.”
H.R. 4403, so far, was the only bipartisan House bill impacting the accounts receivable management (ARM) industry slated for a vote before the 116th Congress adjourned.
In 2020, the Democrat-led House Financial Services Committee proposed nearly two-dozen bills that would have impacted ARM industry operations. The House version of the Coronavirus Aid, Relief, and Economic Security Act and the Health and Economic Recovery Omnibus Emergency Solutions Act would have also severely restricted the ability of ACA members to operate and continue to communicate with consumers.
Read more here.
ACA Cast: Revisiting Progress of the TRACED Act
This comprehensive episode of ACA Cast includes a recap of the Federal Communications Commission's requirements to implement the TRACED Act as well as its impact on the accounts receivable management industry in the year ahead with Leah Dempsey, ACA's vice president and senior counsel of federal advocacy, and Mark Brennan, partner at Hogan Lovells in Washington, D.C.
Read more here.
ACA Offers Initial Analysis of CFPB Debt Collection Rule
The CFPB released its long-awaited rule for the ARM industry, signaling the biggest development in the ARM industry since passage of the Fair Debt Collection Practices Act more than 40 years ago.
Not all issues addressed in the original Notice of Proposed Rulemaking have been included in the final rule.
Part one of rule primarily focused on communication issues, and many of the sections concerning the model form validation notice, out-of-statute debt, and other disclosures were addressed in part two of the rule.
In our initial review, it appears that the rule supports several key issues ACA has long sought clarity on, including safe harbor procedures for the use of voicemail messages and the ability to use modern forms of communication, such as text messaging and email (although with some arguably complex compliance burdens).
California to Begin Licensing and Regulation Process Jan. 1
California will become one of 35 states to require a license for debt collection effective Jan. 1, 2021, and agencies will have one year to comply.
The Debt Collection Licensing Act (SB 908), from California State Sen. Bob Wieckowski, D-Fremont, was signed into law by Gov. Gavin Newsom in September, as was legislation to create the Department of Financial Protection and Innovation (DFPI)—essentially a state version of the CFPB. The DFPI will include oversight of debt collectors and emerging financial technology products.
It was welcome news for the accounts receivable management (ARM) industry and ACA that the governor approved both these measures, allowing for a separate licensing process outside of the DFPI.
The California Association of Collectors advocated to ensure workable options for consumers and the ARM industry in the licensing bill. And the Collectors Insurance Agency (CIA) licensing team had a seat at the table to negotiate the best licensing legislation possible for the ARM industry.
Read more here.
Washington State Department of Licensing Sets Public Hearing on Remote Work Rule
The accounts receivable management industry has a chance to weigh in on a work-from-home rule by submitting written comments or voicing their thoughts during a virtual public hearing on Jan. 5, 2021.
The Washington State Department of Licensing sent out the hearing notice Dec. 1 to codify a permanent rule on the option for collection agencies to offer licensees and their employees the ability to work remotely.
The permanent rule would allow licensed agencies to continue to offer the public their necessary services as long as the required security measures and data storage requirements and detailed definitions and requirements of remote work are in place, according to the notice from the Washington State Department of Licensing.
This rule has been at the heart of advocacy efforts for ACA International in Washington. ACA’s Vice President of State Unit and Government Affairs Andrew Madden and ACA member Kevin Underwood, attorney with Linebarger Goggan, Blair & Sampson, LLP, serve among six subject matter experts on the Washington State Collection Agency Licensing Board (CAB) Rule Committee. The committee also includes two CAB members, including ACA member Mark Case, general counsel for Receivables Performance Management LLC.
Read more here.
All About Semantics in Facebook v. Duguid Oral Argument
Oral arguments before the U.S. Supreme Court in Facebook v. Duguid came down to the semantics of the statutory definition of an automatic telephone dialing system (ATDS) in the Telephone Consumer Protection Act and a debate about the role that Congress or the courts should play in modernizing the statute.
With Chief Justice John Roberts presiding, the court heard arguments from Paul Clement, partner at Kirkland & Ellis in Washington, D.C., on behalf of Facebook; Bryan Garner of Garner & Garner LLP on behalf of Noah Duguid; and Jonathan Ellis, assistant to the Solicitor General, on behalf of the U.S. government, which has aligned itself with Facebook in the appeal.
As modified after Barr v. AAPC, the Duguid case presents a simple question: Whether the definition of an “automatic telephone dialing system” in the TCPA includes any device that can “store” and “automatically dial” telephone numbers, even if the device does not “us[e] a random or sequential number generator.”
Recall that the D.C. Circuit’s decision in ACA International v. FCC blew open the debate over this provision of law back in 2016, with a subsequent circuit split developing as to the definition of an ATDS and whether the statutory language should be interpreted narrowly or broadly.
Read more here.
ATDS Ruling About Twilio Text Platform Serves as Industry Win
A district court ruling handed down on Feb. 25, 2020, provides some positive precedent for accounts receivable management companies in the 11th Circuit that use the Twilio text-messaging platform.
Text messages sent via Twilio do not fall within the ambit of the TCPA, the U.S. District Court, Middle District of Florida, ruled in a summary judgment in Northrup v. Innovative Health Ins. Partners, LLC. The court held that neither 212CRM—which the defendant used for contact management—nor the Twilio text-messaging platform qualified as an ATDS “as a matter of law because (1) neither had the capacity to randomly or sequentially generate numbers, and (2) both require[d] human intervention” in order for the defendant to initiate a text message.
Notably, the summary judgment ruling represents the first district court opinion in the 11th Circuit to follow Glasser v. Hilton Grand Vacations Co., LLC, which set a powerful circuit precedent with its ruling that an ATDS must both have the capacity to use random or sequentially generated numbers and must dial those numbers automatically.
Read more here.