Debt Collection Experts Clarify Industry Practices During House Financial Services Hearing

WASHINGTON, Sept. 27, 2019 /PRNewswire/ -- The House Financial Services Committee heard from two ACA International representatives Thursday in a hearing about debt collection practices. The hearing follows the Consumer Financial Protection Bureau's 120-day public comment period on the Notice of Proposed Rulemaking for the severely outdated Fair Debt Collection Practices Act. ACA International submitted a 154-page comment letter on the proposal, which may be accessed here. ACA International's comprehensive comments recommend fair and objective policies that clarify legal obligations for the accounts receivable management (ARM) industry and provide clarity for consumers.

Meanwhile, on Thursday, longtime ACA International member John Bedard, owner of the Bedard Law Group in Atlanta, and Sarah Auchterlonie, an ACA consultant and shareholder at Brownstein Hyatt Farber Schreck in Denver, testified before the committee, chaired by U.S. Rep. Maxine Waters, D-Calif. Many questions posed by committee members related to the CFPB's proposed rules. Here are a few quotes representative of the hearing:

• "The CFPB's proposed rule gives unconditional control to consumers over the communication methods used by debt collectors. This control gives consumers unprecedented power over the debt collection process while at the same time building a stronger technology bridge between consumers and debt collectors," Bedard said.
• "Efforts to delay or eliminate conversations between consumers and creditors' collection agents do not help consumers. Rather, preventing communication about collection options will enhance consumer harm by increasing incentives for creditors to file collection suits because they are stymied in their ability to settle debts outside of court," Auchterlonie said.
• "A healthy connection between debt collectors and consumers increases access to credit. It encourages the local appliance store to sell that washing machine on terms. It encourages the local dentist to provide those braces on the promise of future payment. And it gives comfort to the auto mechanic that they will be paid tomorrow for their repairs today," Bedard said.
• "I have seen firsthand the problems a lack of clear regulatory guidance can create for both consumers and the ARM industry, and the CFPB has at times exacerbated these problems through unfair and agenda-driven enforcement actions. Regulation by enforcement is wrong. It is unlawful. It is happening today, and it needs to stop," Bedard said.
• "Modernization of the FDCPA is long overdue, and this [the proposed rule] is a step in the right direction to help protect consumers from harmful debt collection practices," said U.S. Rep. Lee Zeldin, R-N.Y. "Open communications between borrowers and debt collectors is key to a functioning credit system. The current debt collection rules are outdated and fail to take into account advanced communication technology. The FDCPA was passed in 1977 when email and text messaging were not in existence. I have not met a millennial who would prefer a letter or a phone call to a text message or an email. It is absurd that the guidelines for this industry are stuck in the 1970s."
• "If a consumer is struggling to pay, they should be treated with dignity and they should be treated with respect in the debt collection process," said U.S. Rep. Andy Barr, R-Ky. "I do think some of the modernizations under the CFPB proposal achieve that very goal. The cost of unpaid debt does not just disappear; someone has to bear the cost and I worry that it may get passed to other consumers. If we don't deal with it, the cost of credit goes up."

To read Bedard's and Auchterlonie's prepared testimony, visit ACA International's Advocacy Resource Center here.

ACA International (ACA), the association of credit and collection professionals, is the largest membership organization in the credit and collection industry. Founded in 1939, ACA brings together third-party collection agencies, law firms, asset buying companies, creditors and vendor affiliates, representing tens of thousands of industry professionals. ACA produces a wide variety of products, services and publications, including educational and compliance-related information; and articulates the value of the credit and collection industry to businesses, policymakers and consumers. www.acainternational.org.

Contact: Kim Coghill
VP Communications
ACA International
202-374-7535
[email protected]

SOURCE ACA International

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