ARM Data Exchange Standards Focus of FTC/CFPB Collection Roundtable

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If a theme emerged at Thursday’s joint FTC/CFPB roundtable on data used in the debt collection process, it was the need for a uniform set of standards in the flow of account data from creditors to collection agencies and debt buyers.

The all-day session, which featured a series of presentations and roundtable panels, brought together representatives from the ARM industry, consumer advocacy groups, original creditors, regulatory groups, and the judicial system. Like previous FTC sessions on debt collection, each panel had a mix of interested parties and focused on one topic under the broad theme of data integrity in debt collection.

In the day’s opening remarks, FTC Commissioner Julie Brill set the stage for the conversation and its focus on data used in the collection system. But she also noted the need for a legislative, rather than regulatory, fix in the form of Fair Debt Collection Practices Act (FDCPA) reform, a matter she described as “close to my heart.”

A series of presentations then laid out the case for a focus on data as participants heard a largely economic argument from the Federal Reserve Bank of Philadelphia, an informational presentation on the collection process given by the CFPB’s John Tonetti, and an overview of the FTC’s Debt Buyer Study.

The idea of universal data standards in ARM account exchanges came up in the very first panel, which focused on information available to debt collectors. Larry Tewell, SVP of Wells Fargo’s credit solutions division, was one of the most ardent supporters. In his closing remarks, Tewell stated directly and “for the record,” that uniform national standards for collection data and media would benefit all parties. Loraine Lyons, SVP and general counsel for debt collector FMA Alliance, agreed that standards would benefit everyone.

It was the beginning of what would become a theme: national standards for data exchange in the ARM process. In a later panel, judge Annette Rizzo joked that if you hadn’t picked up on that theme, you hadn’t been paying attention.

Generally, the panels were muted and respectful, with panelists showing obvious preparation for the event. The only real fireworks of the day were generated in the third panel on debt collection litigation, a topic that has always been highly contentious.

That panel featured an interesting cross-section of stakeholders, including Brandon Black, formerly of debt buyer Encore Capital; Joann Needleman of NARCA; Judge Rizzo; Peter Holland, instructor at Maryland’s law school; and Maryland Assistant Attorney General Thomas Lawrie. At one point, Lawrie tacitly accused the ARM industry of not wanting collection case defendants to show up, allowing for more default judgments. When industry members pushed back noting that it’s in everyone’s best interest if the collection attorney and consumer speak, he directly accused the ARM industry of using those opportunities to “coerce” consumers into settlements.

To underscore exactly what the ARM industry can expect in the way of universal standards, an afternoon presentation by two FTC attorneys featured recently enacted state laws that enumerate requirements for account data before a debt collector or buyer can file a suit and in some cases commence debt collection activity.

For more detail on the event, check out insideARM’s Twitter feed from Thursday, or read our live blogging posts from the workshop:

John Tonetti: Flow During the Debt Cycle

Heather Allen: Overview of the FTC’s Debt Buyer Study

CFPB Panel 1: Info Available to Debt Collectors at Time of Assignment, Sale

CFPB Panel 2: Verifying Disputed Debts Under the FDCPA/FCRA


Continuing the Discussion

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  • avatar John Smith says:

    Brandon Black was very impressive in defending the ARM’s industry when being attacked by a rabid group of liberals. The issue of defendants not appearing for their court dates was some how the responsibility of collectors! All kinds of excuses were made for the consumer. Once again, liberals do not hold individuals accountable for their action or inaction. It is always society’s fault etc.

    The bulk of the debtors I have communicated with over a collection career span of 45-years were irresponsible procrastinators. That is why they DO NOT show up in court. Conversely, those that do have a legitimate reason for non-payment generally show-up to defend themselves.

    BTW, Judge Rizzo was implying that the courts should go knocking on doors when a defendant does not exercise their right to defend themselves.

    Where will the money come from to pay for transport services and door-to-door “sales persons” to sell the idea of responding to a subpoena? I am sorry to be witness to this country’s eminent demise and fear for my children and grandchildren.

  • avatar amy-robbins says:

    John Tonetti ( who I have worked with before ) was brilliant in his discussion of ” Flow During The Debt Cycle. A Lot of communication is lost between the original creditor and the Collection Agency/Debt Buyers. This information is key in getting a better flow between the debtors and the agency. As Collection dwindle down, the discussion with less and less around how will new credit take place? If creditors knows that once the debt is charged off, they have limited recourse through Collection Agencies or laws that will soon govern them as well, they will be more hesitant to issue credit to those ” borderline” applicants. Overall this will hurt the ability to get new credit in the future. Although this takes a bit for this trickle down effect, it happened several years ago, and will happen again. As laws on collections become even more “pro-debtor” creditors will begin to tighten their belts on granting. Where does this leave us? A recession? Already there. There are many issues in the FDCPA that need to be looked at and re-examined I can only hope that at some point in my lifetime this will happen. Thanks Mr. Tonetti for trying to map out that path and paint a very accurate picture of ” The Flow “.

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