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Is the Sky Falling from the CFPB?

posted on 2013-11-22

ACA President’s Letter

Michael Ryalls

 

Chicken Little was right but it’s not all bad.

Over the last 20+ years that I have been involved in this industry I have seen massive changes.  From technological advances to societal shifts these forces have changed the shape of our businesses.  Collection agency operators are great innovators and for the most part have adapted remarkably well. 

Lately, however, the rate of change seems almost unmanageable and something else is different this time - something very important.  As I attend conferences, read the news, review e-lists, and chat with colleagues, I have sensed something previously unknown.  The difference is the attitude, the feeling, of us - the collective us - that is this industry.  I have heard many times that smaller agencies lack the resources to respond and larger agencies are often too muddled in their own bureaucracy to change.  The feeling that is so palpable is fear.

Fear of CFPB (Consumer Financial Protection Bureau)    

It is beyond my ability to change the collective fear that seems to have gripped us but I am going to try to add a little perspective and hope you will at least consider the possibility that this is all good.

First of all, I think it is important to say that the CFPB is not going anywhere and soon will be everywhere.  If you are hanging on a thin hope that a new administration or lawsuit will save the day, you are wrong.  The CFPB is here to stay.  If you think that your company is out of reach because you only work medical or have lower revenues, again, you are wrong.  The CFPB will extend to medical ultimately and any sized agency is within its enforcement reach.  

Now that we know they are here to stay and everyone is within target range, let’s look at the positives of which there are many. 

Well run compliant agencies suffer a competitive disadvantage to cheaters and lawbreakers.  One, because our costs are much higher while following the rules and two because our collection recovery rates are often lower than abusers.  To say it another way, cheaters collect more and spend less.  Consistently enforced, nationally recognized regulation levels the playing field.  If you, as a compliant agency, are competing against a bad agency you are at a competitive disadvantage and should be looking forward to the new world.  If you are an agency that abuses consumers and generally breaks the law then fear is appropriate. 

Next, there are no surprises with the CFPB.  They have been very transparent and all indications are that is likely to continue. They are not playing gotcha politics and sneaking around hiding.  Go to their website and start researching and you will be inundated with information.  The Supervision and Examination Manual, available for download on the site, is over 900 pages alone. They have posted comments, bulletins and even the Debt collection examination procedures to insure that we, the regulated, are well informed.  A Facebook page, Twitter feeds and email notification systems are all also available to keep us up to speed.  The only thing to fear here is ignorance and inaction.   

My last point, but I think the most important, is that compliance is good for business.  If your clients are anything like mine, the conversation has shifted from performance to compliance.  Maybe medical clients are too focused on other issues right now but I believe they too will change soon.  Being the most compliant, having a compliance management system in place and living the philosophy from the top, is a winning strategy.  Business will increase, law suits will decrease and once established your businesses will run better.  Being ACA members, we have always lived by a higher standard and professional clients understood what our membership meant.  Now we, as an industry, have an enforcement arm that will ensure everyone lives by the same standards or lives in fear.  

As we have done so many times before, as an industry and as individuals, let’s be positive.  Let’s embrace this inevitable evolution of our industry and let’s be positive agents of change together.  The ACA is the outline and structure by which that can happen and needs your support.