Mike Ginsberg’s Blog: An Insider’s Perspective on Legislative and Regulatory Affairs Impacting ARM

Mike Ginsberg

Legislative and regulatory activity was relatively quiet during the second quarter of 2012.  Was this an aberration or an indication of things to come?

However, negative press exploded at the local, state and federal level in Q2, most notably with regard to medical collection activity by Accretive Health. Negative press has served as the leading indicator that increased activity by lawmakers and regulatory bodies will follow.  Rozanne Andersen, my friend and one of the foremost experts on legislative and regulatory matters impacting accounts receivable management has, once again, provided the industry with her keen perspective in the Kaulkin Ginsberg Q2 report.

Here are some of her key findings:

1. Two Sheriffs in Town – Confusion in the marketplace remains over the role and function of the FTC and the role and function of the CFPB.  Both will continue to have enforcement authority.   Rozanne carefully explains the distinctions between these two government agencies in this report.
2. Federal Trade Commission Action – With respect to the ARM industry, there were no administrative or judicial actions reported by the FTC filed against collection agencies or asset purchasers during the second quarter of 2012. But several of the FTC’s enforcement actions this quarter did touch our industry – albeit indirectly.   In our report she details which ones.
3. Fair Debt Collection Practices Clarification Act of 2012: On May 17, Rep. Barney Frank (D-Mass.) introduced a revised version of H.R. 4101, the Fair Debt Collection Practices Clarification Act of 2012, in the U.S. House of Representatives. The stated purpose for the reintroduction was to further clarify the limitation on liability when leaving voice mail messages.
4. End Debt Collector Abuse Act: In May, Senator Al Franken (D-MN U.S.) announced his intent to reintroduce his End Debt Collector Abuse Act.  According to Franken, the bill will address abusive debt collection practices detailed extensively in reports by the Federal Trade Commission, GAO, Minnesota Attorney General and recent news articles.
5. State Legislative and Regulatory Action – As predicted in previous ARM Legislative and Regulatory Briefings, proposed state legislation primarily staged to further curb debt buying activity and eliminate or restrict the ability to collect out of statute debt gained legs in the second quarter. Fortunately, through the efforts of ACA International, DBA International, industry coalitions and the efforts of industry members such as Encore Capital Group and Cavalry, the bills were either tabled, sent back to committee or died.

Looking forward, we are confident that the rest of 2012 will be active with the CFPB releasing its definition of larger participant and the first wave of change stemming from the CFPB for the debt collection and asset purchasing industry. We all wait with great anticipation.