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.
Disclaimer: Ontario Systems is a technology company and
provides this blog article solely for general informational and marketing
purposes. You should not rely on the content of this material for any other
purpose or as specific guidance for your company. Ontario Systems’ advice,
services, tools and products described herein do not guarantee compliance with
any law or industry standard. You are ultimately responsible for your own
company’s actions and compliance efforts. Because everyone’s situation is
different, you must consult your own attorneys, accountants, and/or other
advisors to obtain specific advice on your company’s compliance, legal, tax,
regulatory and/or other business needs. Despite Ontario Systems’ efforts to
provide current and up-to-date information, you need to recognize that the
information contained herein may become outdated quickly and may contain errors
and/or other inaccuracies.
© 2016 Ontario Systems, LLC. All rights reserved.
Information contained in this document is subject to change. Reproduction of
this publication is not permitted without the express permission of Ontario
Systems, LLC.
