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Are You or Someone You Love a Larger Market Participant? 

The CFPB, which oversees the collection industry in general, and Larger Market Participants in particular, has started sending Covid-19 questionnaires to those companies to understand business practices currently in place.

This came up in a question sent in through the Research Assistant portal:

Hi Mike!!

Have any other agencies been contacted by the CFPB for either a Q&A session or a “prioritized review” to see how we’ve handled collections during the COVID pandemic?

Thanks!

Most smaller and mid-sized agencies probably won't have the opportunity to explain their Covid practices to the CFPB, but for those who fall into the category of Larger Market Participant, you're very likely to receive either a request for a Q&A session or a prioritized review.

In some cases, these requests have come during a regular, separate investigation, adding additional work and using already scant resources.

If you're curious as to what may be expected, here are the kinds of questions the CFPB is asking:

  • Are you offering hardship accommodations? If so, what are they and how many people are participating?
  • Are there state and local laws that effect what you are offering? Are there restrictions on communication? New legal requirements? What was the effective date of these changes?
  • How many people have filed BK?
  • How have your call centers operations changed?
  • Do you outsource?
  • Have you seen an increase in inbound calls from consumers distressed by COVID? Provide data.
  • Are you experiencing delays in payment processing due to office closures?
  • What procedures do you have in place to allow people to cancel pay plans?
  • Do you use email or text to communicate with consumers? Describe how policies have changed since COVID?
  • Do you handle litigation? Describe how you identify available assets. How did you make sure you weren’t taking CARES Payments. Provide policies. Provide volumes.
  • What is your process for stopping wage garnishment or bank levy. Provide numbers

These are probably questions all agencies should have an answer of some kind for -- whether it be for a regulatory investigation, or when looking for new business or new business partners. 

Just because you're not asked now, that doesn't mean you won't possibly be asked later. Stay safe out there.

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I Love New York. I Need New York. I Love, I Need, Unique New York. 

Last week, we talked about NYC's new letter requirements -- specifically, the requirement to provide communications in multiple languages if necessary.

There have been some updates.

For one thing, it sort of feels like NYC didn't entirely think through the language requirements that they were demanding or, at the very least, they weren't entirely prepared on their end for people to ask questions like "Where's that glossary?" and also "You mentioned you'd have a glossary?"

The reason the glossary is an issue is NYC expects collection agencies to include a link to its Department of Consumer Affairs site, where there would be a glossary of all relevant debt and debt collection terms consumers can access in the language of their choice. (To give props to NYC Department of Consumer Affairs, they offer a LOT of languages.) However, there currently isn't one, and it seemed unlikely that there would be one by the time the rule went into effect on 6/27.

In effect, it was a damned-if-you-do/damned-if-you-don't situation for collection agencies. If they didn't include the link in their communications, they would be afoul of the DCA's requirement. However, if they included the link, it would take consumers to a site where the information they were told would be there isn't.

And that's a lawsuit.

New York has now granted a 60-day grace period, but still intends the law to go into effect on Saturday -- Saturday -- 27 June.

As soon as that glossary function is on the DCA site, we will let you know.


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