To view the information on this subject will require the password.
This was sent to each member, if you did not receive please emailpkralka@firstpointresources.com
To access the SAFE Act, motion by directors at the Nov 4 meeting, and member's comments, please click on the link below.
SAFE ACT NOV MEETING AND COMMENTS
CFPA REVISED & DEC 14 DB MEETING RECAP
The board will meet again on Tuesday, January 26, 2010 for another update and the review of several motions presented, a recap of these
motions which will be discussed and voted upon are noted below. If you have some input that you would like to share with the board
or the elected directors of ICA, please send these comments to Roger Medlin and I will forward to the board and our ACA directors.
Jan 26 Board Meeting Motions (To be considered)
Dear ACA member:
As newly appointed members of ACA's Legislative Council, we write to ask you for your support in defeating the proposed financial regulatory reform legislation creating the Consumer Financial Protection Agency (CFPA). This legislation specifically and intentionally includes debt collectors under the regulatory authority of the CFPA and would have far reaching consequences for our industry.
To have an understanding the context for this dynamic legislative activity on Capitol Hill, the following is a brief update on where this legislation stands, along with how you can help. Please read carefully!
Last summer, House Financial Services Committee Chairman Frank reported four pieces of "financial regulatory reform" legislation, one of which would create the CFPA. This legislation was reported favorably by his committee on October 29, 2009. It is being packaged with the three other bills, and is expected to be addressed by the full House as one, large omnibus bill by the full chamber in mid-December.
In the Senate, Banking Committee Chairman Dodd released a broad overhaul package that includes CFPA creation on November 10, 2009. The committee hopes to begin marking up this bill after Congress returns from the weeklong Thanksgiving recess. There is limited floor time due to the extended time required for the health care debate. Should Senate leadership decide to bring this overhaul package for consideration by the full body, such action would likely not take place until next year.
Finally, while the proposed CFPA legislation in the House and Senate largely mirror each other, there are wide differences in the broader financial regulatory overhaul packages. In order to be passed into law, the House and Senate must pass identical language in order for the financial regulatory reform legislation to become a law.
What this means is that, while critical decision s as to the legislation's components are being made right now, this legislation must pass several more critical steps before becoming law.
To best engage our entire membership on this issue within the various critical timelines, the Legislative Council has chosen to take a two-pronged approach.
First, we ask each and every ACA member make his or her voice heard in opposition to this incredibly onerous legislation. Please click the above link to be directed to a portal that will automatically determine your Members of Congress and allow you to send a letter to your Representative and Senators expressing and explaining your opposition to the CFPA. If you have not already visited our new Legislative Action Center we hope you will find this new tool on ACA's website to be helpful to you at any time.
There is also a window of opp ortunity for some of the most egregious provisions of the legislation to be removed or changed, and we are calling on members who have specific relationships with Senators on the Banking Committee to communicate with key Senate Banking Committee members discussing our association's reasons for opposing the CFPA legislation and alternatively offering amendments that would remove some of the most egregious components.
After reviewing the Dodd draft bill, soliciting and obtaining input from attorneys regarding legal concerns with the House and Senate bills, and considerable deliberation, the Legislative Council is proposing we focus our "Plan B" efforts on seeking amendments on issues including the following:
Registration: The one characteristic that concerns all affected parties of this legislation is that it provides excessively broad authority in numerous areas. Historically states have taken the lead in determining when credit and collections org anizations need to be registered or licensed. Regulators at the state level are familiar with the needs of consumers residing within the states' borders. Congress should not act in an area where states already have unless it is Congress' intent to have the CFPA pre-empt the states in registration and regulatory matters.
Enhanced Backstop Authority for FTC: The CFPA legislation provides what has been termed "backstop authority" for the existing regulators. What this means is that if the existing federal regulator (FTC) has noticed an outstanding issue that it believes needs to be addressed, it may petition the CFPA to do so. If after 30 days, the CFPA has not responded appropriately, the FTC can take action itself. This duplicity would result in our industry having two federal regulators, both of which may not always be in sync. Moreover, the draft legislation does not include any means or mechanisms for the federal regulators to reconcile their respective positions. They will often be at odds with each other, and therefore, this presents a very unstable regulatory foundation.
Restrictions on Compensation: One of the most extraordinary powers the Senate bill proposes for the CFPA under this legislation is the ability to control the compensation of covered persons, which would include collectors. As you all know, our industry is characterized by offering well-paying, white collar jobs to individuals who have attained a high school education. Our members provide significant on-the-job training and create sustainable jobs for Americans. While the CFPA is prohibited from capping the total dollar amount of compensation, the proposed legislation empowers the CFPA to prescribe rules governing employers' compensation practices regardless of the wide array of businesses in the vast number of jurisdictions the CFPA would regulate. This provision would have a direct negative effect on compensation and opportuni ties for jobs in our industry. Ample state and federal laws and regulations govern pay scales and compensation practices.
Fees: The legislation mandates the CFPA director assess fees to pay for the new agency. This additional financial burden should be taken from general Treasury revenue, similar to most federal regulatory bodies. Most companies are looking for ways to reduce costs, while trying to maintain the employee base. Additional costs will only endanger jobs and possibly many companies' existence. These additional fees also represent a conflict of interest for an agency to determine how its own funding is determined.
Penalties and Fines: Congress grants the CFPA three tiers of excessively high caps for civil penalties in the legislation. Even the base penalty for violations of any consumer protection law, regardless of whether or not they were reckless or made knowingly are up to $5,000 per day. These penalty rates are crippling, and in the third tier (knowing violations), they can be as high as $1,000,000 per violation per day.
Injunctive Relief: The legislative language provides injunctive relief to the proposed agency through cease and desist orders without any need for the CFPA agency to present their case before a judicial body. Cease and desist orders and similar extraordinary relief typically are subject to a judicial review and reflection by a judicial body responsible for applying rules of evidence and procedure. Placing such authority in a regulatory body could lead to irrevocable harm to businesses prior to a judicial determination of actual wrongdoing.
Federal Preemption: One of the primary legislative objectives ACA International's most recent strategic planning meeting identified was to seek federal preemption of state law in order to dramatically reduce the administrative burden and expense of complying with varying state laws and frivolous lawsuits throug h uniform compliance requirements. There's no question that federal preemption represents a significant hurdle, but because the concept did arise during the House committee debate, it's not inconceivable that a more moderate Senate may provide even stronger consideration, and the benefits to our membership would no doubt be substantial. While this may not be an amendment the Senate would approve, it appears important to advance this amendment request on behalf of the association's members.
Statute of Limitations: The legislation would allow the CFPA to bring an action under the law up to three years after the date a violation is discovered. This "discovery rule" creates a hardship for businesses without offering a reasonable benefit to consumers. It would require businesses to retain records and other materials indefinitely since there is no timeframe within which a consumer must make reasonable efforts to determine whether or not a consumer protection law has been violated. In addition, other consumer protection laws (like the FDCPA) do not provide a discovery rule and also provide shorter time periods for bringing an action.
Delay in Rulemaking Authority: In order to provide Congress an opportunity to amend relevant statutes, we are proposing an amendment so that the enabling legislation would delay the CFPA's rulemaking authority. This allows the transfers of authority relative to the multitude of consumer protection laws to first occur, thus preventing a situation in which such rulemaking is done in a vacuum.
This "Plan B" requires the mobilization of members who live in states represented on the Banking Committee. Those states are: Alabama, Colorado, Connecticut, Idaho, Indiana, Kentucky, Louisiana, Montana, Nebraska, New Hampshire, New Jersey, New York, Ohio, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, or Wisconsin. Senators on the Banking Committee have the ability to offer amendments to this bill. If you would like to help, please contact Federal Government Affairs Director Adam Peterman at peterman@acainternational.org.
We strongly believe that together this strategy offers our industry the best opportunity to work to defeat this legislation if possible and failing that to squarely address the provisions in the proposed legislation by offering concrete amendments to some of the most onerous provisions. It is important to note that as we mobilize our association members and obtain feedback from visits and communications with key Senate and House members this strategy could be modified, updated or changed. It is the goal of the Legislative Council to regularly update you regarding financial regulatory reform developments and we welcome your input and questions.
We appreciate y our efforts in this grassroots mobilization to protect the rights of consumers without jeopardizing our industry.
Sincerely,
Chris Wunder | 
Mike Shoop |
CALL TO ACTION TO OPPOSE CFPA LEGISLATION
As chair of the ABD Committee, I personally encourage all debt buyers to review the CFPA legislation (House Bill, Senate Bill) being proposed in Congress and to contact your US Congress Representative and Senator to oppose this potentially onerous legislation. The proposed Bill could have far reaching negative consequences for the Accounts Receivable Management industry.
Additionally, on November 24, 2009 Chris Wunder and Michael Shoop, members of ACA’s Legislative Council, drafted a letter to ACA membership soliciting your support on defeating this legislation. The ABD Committee encourages all debt buyers to read this letter and to take immediate action.
The issues below may specifically affect our industry:
Registration: In addition to state requirements, it may require industry members to “register” employees and/or collectors at a national level.
Enhanced Backstop Authority for FTC: Will create dual and/or double federal regulatory oversight to the industry.
Restrictions on Compensation: There may be limits on how ARM industry professionals can be compensated.
Fees: The legislation mandates the CFPA director assess fees to pay for the new agency. The fees will be paid by the entities it regulates.
Penalties and Fines: There will be excessively high caps for civil penalties in the legislation from $5,000 to $1,000,000 per day per violation
Injunctive Relief: The legislation provides for injunctive relief through cease and desist orders without any need for the CFPA to present their case before a judicial body.
Statute of Limitations: The legislation would allow the CFPA to bring an action under the law up to three years after the date a violation is discovered.
ACA and the ABD Committee suggest taking the following the simple steps below to help protect our industry:
Step 1) Visit ACA's Web site and click on the Legislation Action Center. This will automatically show you your members of Congress.
Step 2) Click on the link “Take Action” under the Current Issue “Tell Congress to Oppose Creating the Consumer Financial Protection Agency”
Step 3) Read the auto-letter that will be sent to your U.S. Congressman and Senators. Complete the drop down boxes and click “Go”.
Additionally, those debt buyers who live in the states below have U.S. Senators on the Senate Banking Committee. Your voice opposing this legislation will be particularly important. Those states are: Alabama, Colorado, Connecticut, Idaho, Indiana, Kentucky, Louisiana, Montana, Nebraska, New Hampshire, New Jersey, New York, Ohio, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, or Wisconsin. Senators on the Banking Committee have the ability to offer amendments to this bill. If you would like to help, please contact Federal Government Affairs Director Adam Peterman at peterman@acainternational.org.
Please contact ACA's federal government affairs staff at (202) 547-2670 or govaffairs@acainternational.org for more information or to learn what more you can do.
Mike Varrichio
President
Global Acceptance Credit Company
5850 West Interstate 20, Suite 100
Arlington, Texas 76017
817 288 0266 work
888 288 0266 toll free
214 215 8805 cell
817 288 0269 fax
mvarrichio@gacc.biz
www.gacc.biz