ACA International Board Halts Plans for Self Regulation in Collection Industry
A legislative proposal from the debt collection association to create a regulatory structure that it would have a hand in running will be withdrawn after a vote from the ACA's board of directors.
ACA International’s Board of Directors moved quickly Wednesday to halt proposed legislation that sought to create a self-regulation structure for the debt collection and purchasing industry after complaints from some of the board members.
The plan would have included federal mandates for state licensing and registration for agencies and collectors, and called for an industry education program run by ACA International.
Some board members told insideARM that ACA’s executive committee submitted the proposal in late September to Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, as an amendment to legislation that would create the Consumer Financial Protection Agency (CFPA). Sources said Frank could have introduced the proposal within two weeks.
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In July, ACA board members gave its executive committee the power to study and, if feasible, draw up a plan for a self-regulatory structure, complete with a nationwide debt collector registry and dispute resolution program.
But during a special meeting Wednesday of the board at ACA’s annual Fall Forum Conference in Chicago, directors voted to take away that authority. The board also directed the executive committee to withdraw, in writing and within 24 hours of the meeting’s end, its amendment proposal, and confirm to all board members the proposal’s withdrawal to Rep. Frank and other political bodies by Friday.
ACA National Board of Director member Jerry Greenblatt told insideARM he was “very happy” with the outcome of the vote. “What’s happened with the passage of this motion is that the decision making within ACA is slowly being given back to ACA members.” He added that the vote to withdraw the proposal “is a great victory for the members of the association, especially the small and mid-size agencies.”
ACA spokesman John Nemo told insideARM that the association will continue to study the issue while incorporating and addressing the concerns of the membership.
“We are a member driven organization. We listen to our membership,” Nemo said. “There was no intent to try to deceive anyone or do anything behind the scenes. We understand that this is an incredibly sensitive and important issue, perhaps the biggest one since the Fair Debt Collection Practices Act (FDCPA) passed, and we want to make sure we do as good a job as possible of being transparent about the process and making sure our board of directors and our membership at large are informed and able to give their input.”
ACA’s actions regarding a self regulation program raised questions within its membership and in the broader accounts receivable management industry.
Emil Hartleb, executive director of Commercial Collection Agency Association, told insideARM that ACA’s approach to self regulation was “fraught with danger for the industry.”
“Anytime you look at licensing or registration, there are unintended consequences that will come out. We don’t need more licensing. What we need is hard enforcement against rogue agencies who are committing these atrocities,” Hartleb said.
David Goch, legislative counsel for the Commercial Law League of America told inside ARM he was “surprised” to learn about a proposal by ACA to apparently legislatively create a debt collection industry licensing body.
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Comments
Comment from Anonymous on November 5, 2009 at 12:13PM EST
ACA is a self fulfilling prophecy. Collect more dues, make more rules , so we can collect more dues. The only plus to the ACA is the training materials and interpretations of legal opinions. For the most part they need to refrain from politicking unless they decide it is better to fight new rules rather than embrace them.
Comment from Larryq on November 5, 2009 at 12:27PM EST
Jerry, you need to think things through! Small and medium size agencies NEED uniform licensing across state lines to compete for a LOT of business. Your pressure and your vote has ended our hope for this reform. It is ok for you to stop our growth, if that is what you intended. But, PLEASE do not act like this extreme setback is a "great victory...(for) the small and medium size agencies" when you make our lives more difficult.
Comment from Outraged ACA member on November 5, 2009 at 1:01PM EST
John Nemo comment, "We are a member driven organization. We listen to our membership" is a joke. If they had been listening to the membership this would have never happened. Those responsible for this mishap should submit their resignation and apologize to the entire membership.
Comment from Kenlyn T. Gretz on November 5, 2009 at 5:54PM EST
I would rather have the ACA running it, than a government body who knows very little about how "good" agencies operate. They only know how "rogue" agencies operate and they would regulate to that extent. I would rather pay a fee to the ACA for training than to a government body. As far as licensing, that will never change. Each state will create their own rules. Tell me one industry that has national rules that are not regulated differently by each state?
Comment from Outraged ACA member on November 5, 2009 at 6:58PM EST
Who is ACA? Is it a few people at the top or is it the entire membership? The direction of the ACA should come from all dues paying members, not just a few at the top who think they know what is best. There are several states that have been very successful in defeating licensing. I want my association to be my advocate, not my regulator.
Comment from Gil V on November 5, 2009 at 7:52PM EST
I see a close comparison here to the issue of self-certification of agencies by ACA International. I was against this concept from the time it was first proposed at an ACA International meeting in the early 1990's. While I admire the concept and congratulate those agency members who are PPMS certified, it's value is limited since ACA cannot regulate the application of certification. In addition, the thousancs of agencies that are non-ACA members (many by choice) cannot be so certified, diluting the value of this self-certification. It simply is not comparable to ISO or other internationally recognized certifications.
I likewise was against self-regulation of agencies by ACA International for basically the same reasons. While the concept is plausible, it cannot exist without governmental regulation and intervention, to which all agencies are strongly opposed.
I strongly support legislation which would protect the thousands of basically innocent agencies from the clutches of the bottom-feeder attorneys who make a living from agencies simply because they can. The law allows them to. In addition, I am in favor much more severe penalties, including jail time, for collectors (and in appropriate cases the owners of agencies) that are found to be egregiously illegal and/or criminal in their tactics.
Comment from San Diego 1950 on November 5, 2009 at 7:57PM EST
I fail to see the need for agency licensing in any state. Especially when all the states are concerned with is the revenue for licensing. ACA stopped listening to it's members years ago. More laws and regulations are unnecessary. What is necessary is clear clarification of the current laws and enforcement of the laws we have.
Comment from San Diego 1950 on November 5, 2009 at 10:08PM EST
The ACA has abandoned it's purpose. I thought it was a advocate for it's members. Instead it has turned into a profit center and is acting like a government regulator. I am in shock at some of the things the executive committee advocated and now wonder why we even need the ACA anymore.
Comment from Anonymous on November 6, 2009 at 11:56AM EST
I applaud the ACA for it's forward thinking. Nothing good comes from federal gov't involvement and oversight. Just look at the outdated FDCPA.
Comment from Fran Fisher on November 6, 2009 at 12:58PM EST
It's interesting to read the various comments from ACA members that the association doesn't listen to us. Any member can get involved and have a loud voice, if they choose to do so. I'm currently President of VCA (the Virginia unit) and now serve on ACA's Legislative Council, which is the committee that reviews and recommends responses to pending legislation that affects our members. I got there by being involved at the state level and working my way up through VCA's board over 10 years. My company is a tiny agency with only 12 employees and some of the provisions in ACA's registry proposal would have hurt us. Other points are well thought out. The Legislative Council was still in the process of reviewing the proposal and hadn't discussed it out of committee yet but the proposal was on the fast track because the CFPA legislation was on the fast track.
As members of the industry, we can't sit back & watch Congress railroad us without trying to protect ourselves in the most practical way possible, which sometimes means going along with legislation that seems inevitable but suggesting changes that make it less burdensome rather than fighting it and losing entirely.
That doesn't mean I'm in agreement with the proposal. I'm still reserving judgment and believe that all issues and potential consequences need to be carefully considered. However, it's introduction was far from a power grab by ACA, it was an attempt to provide whatever protection is possible to our members in an extremely unfriendly political environment. The good news is, that environment may be shifting a little in our favor with Tuesday's elections.
In my experience, ACA welcomes all member participation, but I didn't know that until I actually started getting involved in the national organization instead of just on a state level. Just like in the political arena, if you don't get involved and offer your opinions or vote, you have no basis for complaining about the outcome.
Comment from LADebtBuyer on November 6, 2009 at 2:29PM EST
Self-regulation is better than government regulation, in some instances.
Witness the FTC rountables and legislative interest in the credit card collections area. There is also the new federal agency with fdcpa enforcement powers.
Some people will be surprised when they get what they wished for: no self regulated industry, but more government action in a way which they cannot control.
Comment from San Diego 1950 on November 6, 2009 at 8:17PM EST
I would like to hear of a successful self regulation agency. As long as we have the Barney Frank's of this world making regulations we are all in trouble. He and Chris Dodd have done a wonderful job with Freddie Mac. Frankly, I can't figure out why they aren't in Jail. Government regulation is onerous and often put upon us with lame politicians that. The ACA use to fight licensing laws and moves that effected agency profitablity. This time they jumped into bed with a well known incompetent legislator(Barney Frank). As long as he and his ilk are the party in power it will be miserable for all business. Next thing SEIU will be coming to unionize all the agencies.
Comment from Anonymous on November 7, 2009 at 10:12AM EST
This was nothing short of a power grab attempt - a move to go from trade association to trade union. If it is such a good idea - why not do it in the light of day where all the members can weigh in?
Comment from Jean Manary on November 9, 2009 at 9:30PM EST
The Barney Frank's of this country scare the devil out of me. The ACA has not only become very political in the "political ring" but there is much politics within it's own organization.