The U.S. Chamber is Resetting the Consumer Finance Discussion (So Keep Talking!)

This article appeared today on the Ontario Systems blog and is republished here with permission.

The ARM and revenue cycle management industries are critical pieces of the U.S. economic puzzle. We know that. And believe it or not, so do many in Washington D.C. The U.S. Chamber of Commerce has said it outright: Receivables management and revenue cycle management play vital roles in ensuring our credit system is healthy and efficient – A key driver of economic growth, which provides jobs, access to credit and improves quality of life across the country. 

Travis Norton, former Executive Director of the Chamber’s Center for Capital Markets Competitiveness, spoke about that truth at our annual customer conference last month, PowerUp 2016, discussing how the cost and efficiency of collection has upstream effects on the cost and availability of credit. Turns out, the Chamber has been watching the ARM and revenue cycle management industries. They’ve even gone so far as to engage with Ontario Systems to learn more about how regulations are impacting our customers. That’s because they understand with increasing compliance costs and an increasing number and complexity of rules comes a regulatory system that doesn’t work as it should: When it’s too difficult to operate, the machine seizes up, and we all suffer. The Chamber argues that Americans deserve a working regulatory system that’s fair for everyone. Specifically, he says that while the Chamber believes individual consumers should be well-served, regulations that govern our industry should be improved by:

• Taking into account the views of communities and businesses
  
• Providing stakeholders with the opportunity for notice and comment in advance of rulemaking
  
• Evaluating the impact rules will have on the quality and number of jobs available to our citizens as well as the cost to comply with the new rules
  
• Protecting economic and personal freedoms
  

We know American economic growth is stuck in a rut despite eight years of monetary policy, three rounds of qualitative easing, and trillions in stimulus spending. It’s time to discuss why.

The Chamber reminds us that one, but certainly not the only issue restraining economic growth is the regulatory pressure felt by those in our industry. Since the enactment of Dodd-Frank, we’ve seen new policies enacted at an accelerated rate, leaving ARM professionals with too many one-size-fits-all cookie-cutter rules. As they see it, regulators tend to adopt the opinion that one-size and one-sided regulations work. And whether it concerns mortgages, prepaid cards, or payday loans, entities like the CFPB feel the need to reshape markets – choose what’s best for consumers – and then legislate it, rather than simply rooting out and prohibiting bad behavior.

We’ve seen the inefficiencies resulting from broad-brush regulation in the industries we serve. For example, before the Bureau’s recent proposal on third-party collection, we observed a series of enforcement consent orders, each with their own unique terms. In turn, the Bureau warned people to beware – That it would be “regulatory malpractice” to avoid scrutinizing one’s own business for similar practices, or to avoid ensuring similar outcomes. These scare tactics have created uncertainty in the market, in turn creating new costs. They have also effectively spurred contraction within the industry such that debt collection and receivables management is soon to be a business only accessible to the very largest of companies within the credit and collection space.

The Chamber agrees: There is no need for this kind of inefficiency in an industry so integral to an efficient credit market. By driving up the cost of credit, consumers are harmed, being less able to afford the financial tools they need. Those in the business of preserving that credit market certainly aren’t served by it either.

The Chamber has worked to reset the discussion around consumer financial issues in DC, including dialogue with the CFPB. There has to be a better way, and we appreciate their support and that of other advocacy groups working to ensure a process that considers the important voice of the business community. After all, the ARM and revenue cycle management professionals we serve ensure our country sustains economic growth, the engine that provides jobs and improves quality of life.

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