The Debt Collection Industry?s Window to Washington

In this difficult and fragmented industry, people often think that there is no one out there looking out for them. Government regulation, consumer distain and intense competition can often isolate members of the credit and collection industry making matters even worse. It?s understandable that many in this industry feel helpless when looking at all of the various laws and regulations that govern collectors? behavior. After all, how is a little collection agency with 20 employees going to get their voice heard on matters such as the FDCPA and FTC and FCC regulation?

Enter ACA International, the Association of Credit and Collection Professionals. The association?s stated goal is the ?protection and advancement of the credit and collection industry,? and has been such for the past 65 years. Many in the industry have come to know ACA International as a one-stop shop of sorts for training of collection staff and legal and regulatory compliance issues. But the association also has a highly developed Government Affairs department that works very closely with lobbyists, regulatory authorities and members of Congress and their staffs to ensure passage of legislation favorable to the credit and collection industry.

The past two years have been very busy for the staff in ACA International?s Government Affairs division. The most recent 18 months have seen a number of high-impact, collection industry-focused bills floating around the halls of Congress. In addition, regulatory activities from various government agencies have commanded a great deal of attention from accounts receivable management proponents.

Obviously, the bill that would allow the IRS to use private collection agencies to track down tardy taxpayers is the most public — and controversial — bill in play currently. The bill has a long and well-documented history. And as with any controversial measure, the plan has detractors.

Although the proposal enjoys the support of several members of Congress, the General Accounting Office and the IRS Commissioner himself, some consumer rights groups and other activist organizations have made every attempt to forestall the legislation. Currently, the proposal to allow private collection agencies to collect back taxes on behalf of the IRS is attached to a larger bill that is stuck in committee. Part of the reason that the larger bill is stalled is the IRS debt collection proposal and the opposition to it. ACA International is actively working with members of the committee, the IRS and members of both political parties to ensure the bill?s passage. And this is where the Government Affairs department?s real challenge comes into play.

In today?s super-charged, partisan political climate, passage of a controversial piece of legislation is nearly impossible. Add the drama and grandstanding of an election year and matters get even worse. Reaching both Democratic and Republican members of Congress is imperative.

?We have to attain bi-partisan support for any measures we want passed,? says Rozanne Andersen, ACA International?s General Counsel and Senior Vice President for Legal and Governmental Affairs, ?and that?s particularly challenging right now.?

Although the IRS outsourcing proposal has become a partisan fight, some legislation beneficial to the collection industry has enjoyed broader support. A bill, HR 3066, meant to clarify the FDCPA, currently has 49 co-sponsors in the House. The co-sponsors include Democrats and Republicans. ACA International has taken a very hands-on approach to supporting HR 3066 in the House.

In March, ACA International members descended on Washington, DC for Washington Agenda ?04, ACA?s legislative conference (read story). Among the topics was HR 3066. Collection agency owners and managers and lobbyists linked arms to invade Capitol Hill to drum up support for the bill. ACA members visited more than 140 congressional offices that day, meeting one on one with House members or high ranking staff.

The efforts appear to have paid off. The bill was referred to the Financial Services Committee for work. Andersen is cautiously optimistic on passage of the bill this session.

?We have been working very closely with staff from the Financial Services Committee, both Democrats and Republicans,? said Andersen. ?We believe that key lawmakers are beginning to realize that clarity in the law is a boon for both consumers and the debt collectors who must comply with the FDCPA.?

Another hot topic for the government affairs folks is regulatory relief. A recent amendment to the Telephone Consumer Protection Act would make it illegal for anyone to call cell phone numbers using an autodialer. Given the recent trend of consumers using cell numbers as their primary number, and the collection industry?s increasing reliance on autodialers, this regulation could be a huge problem for collectors. Andersen feels that the situation will be resolved peacefully. She said that ACA International?s Government Affairs department is working directly with the FCC to get an exception in the regulation for collectors, similar to the exception contained in the Do-Not-Call list.

So what?s on the horizon for ACA International? A bankruptcy reform bill may be showing signs of movement. The industry?s primary goal is to see the insertion of a clause that would ask debtors to include a list of both third party debt collectors and creditors on their bankruptcy petition. This modification to the code would speed up the process of notification so no misunderstandings can take place between the consumers who are petitioning for a fresh start and the debt collectors who are otherwise unaware of the filing.

Also, the next congressional session will surely bring ACA International to Capitol Hill as champions for the industry on the medical collections issue. ?Legislators frequently misunderstand the high degree of professionalism exhibited by the industry when collecting medical debt and the role debt collectors play as the agents of providers. The role of the professional debt collector in the U.S. healthcare delivery system is critical to every American. Debt collectors return billions of dollars to the economy each year and their value cannot be overlooked or discounted,? Andersen said. Her staff will be closely monitoring bills that are introduced in Congress that seek to undermine or complicate the great strides the industry has taken to comply with HIPAA, the Fair Credit Reporting Act, the Gramm Leach Bliley Act and of course the Fair Debt Collection Practices Act.

?We have to make sure Congress does not overreact to many of the patient privacy incidents of the past year with stifling legislation,? she said. ?Reasonable minds can prevail.?