The CBE Group, Inc. (CBE), a leader in the debt collection industry, announced today the appointment of McGladrey LLP, the fifth largest U.S. provider of assurance, tax and consulting services, to conduct a proactive business assessment in preparation for future federal supervision of CBE by the Consumer Financial Protection Bureau (CFPB).
In February, the CFPB announced a proposed rule to include debt collection and consumer reporting agencies under its nonbank supervision program. This supervision includes an annual audit conducted by the CFPB and marks the first time debt collection agencies, like CBE, are subject to federal supervision. Under this rule, debt collection agencies with more than $10 million in annual receipts from debt collection activity are subject to supervision. The CFPB estimates that this covers around 175 debt collection firms, including CBE.
CBE’s President and CEO Tom Penaluna said, “Compliance is one of our top priorities. CBE continually invests in compliance programs and systemic processes, like speech analytics and extensive training, to inspect what we expect. An external compliance audit conducted by a highly respected company, like McGladrey, will provide verification of CBE’s current policies and operation, as well as assist us in finding areas of potential improvement prior to the CFPB conducting its audit.”
CBE and McGladrey began the assessment process with consultants on-site for a week in May and again in June. McGladrey will deliver its findings in a final report to CBE in August. The assessment included interviews with key personnel, tests and reviews of standard operating procedures. The assessment follows the template used by the CFPB when it conducts audits of financial institutions; however it was tailored for a debt collection agency. McGladrey’s first step was to complete a risk assessment. McGladrey’s focus is on the regulations that apply to debt collection agencies, such as the Fair Debt Collection Practices Act (FDCPA) and Fair Credit Reporting Act (FCRA).
McGladrey’s Jolene Topinka said, “When CBE executives approached us with this project, we were quick to develop a program that will prepare the company for federal supervision and future audits conducted by the CFPB. McGladrey has been in the financial sector for many years and has extensive experience conducting regulatory and compliance assessments for financial institutions. Although this assessment is the first of its kind, McGladrey now has the framework in place to review other collection agencies that will be subject to federal supervision under the CFPB. Because of CBE’s strong mission of Defining the Future of Debt Collection, company leaders want to reveal the operations of good players in the industry.”
“The driving spirit at CBE is to ensure we deliver on the brand promise our clients have made to their customers. This proactive audit strengthens our commitment to doing the right thing for consumers and our clients,” said CBE’s COO Chad Benson. “The investment in this audit will provide our team with an objective understanding of what we are doing well and where we can improve in the areas of compliance, process, communication and systems. CBE’s approach to treating every consumer in a manner that each of us would like to be treated can only get better through this process,” Benson said.
CBE has been in the accounts receivable management business since 1933 and currently employs nearly 1,000 people in four locations nationwide. Its corporate headquarters is located in Cedar Falls, Iowa, with additional facilities in Waterloo and West Des Moines, Iowa, and Overland Park, Kansas. CBE was named one of the best places to work in the Waterloo/Cedar Falls metropolitan area the last seven years. CBE represents many of the nation’s most renowned and respected organizations. CBE serves a variety of industries including healthcare, utilities, satellite, telecommunications, financial services, education and government.
McGladrey LLP is the fifth largest U.S. provider of assurance, tax and consulting services, with more than 6,500 professionals and associates in 75 offices nationwide. McGladrey is a licensed CPA firm, and is a member of RSM International, the sixth largest global network of independent accounting, tax and consulting firms.