ARM Data Exchange Standards Focus of FTC/CFPB Collection Roundtable

If a theme emerged at Thursday’s joint FTC/CFPB roundtable on data used in the debt collection process, it was the need for a uniform set of standards in the flow of account data from creditors to collection agencies and debt buyers.

The all-day session, which featured a series of presentations and roundtable panels, brought together representatives from the ARM industry, consumer advocacy groups, original creditors, regulatory groups, and the judicial system. Like previous FTC sessions on debt collection, each panel had a mix of interested parties and focused on one topic under the broad theme of data integrity in debt collection.

In the day’s opening remarks, FTC Commissioner Julie Brill set the stage for the conversation and its focus on data used in the collection system. But she also noted the need for a legislative, rather than regulatory, fix in the form of Fair Debt Collection Practices Act (FDCPA) reform, a matter she described as “close to my heart.”

A series of presentations then laid out the case for a focus on data as participants heard a largely economic argument from the Federal Reserve Bank of Philadelphia, an informational presentation on the collection process given by the CFPB’s John Tonetti, and an overview of the FTC’s Debt Buyer Study.

The idea of universal data standards in ARM account exchanges came up in the very first panel, which focused on information available to debt collectors. Larry Tewell, SVP of Wells Fargo’s credit solutions division, was one of the most ardent supporters. In his closing remarks, Tewell stated directly and “for the record,” that uniform national standards for collection data and media would benefit all parties. Loraine Lyons, SVP and general counsel for debt collector FMA Alliance, agreed that standards would benefit everyone.

It was the beginning of what would become a theme: national standards for data exchange in the ARM process. In a later panel, judge Annette Rizzo joked that if you hadn’t picked up on that theme, you hadn’t been paying attention.

Generally, the panels were muted and respectful, with panelists showing obvious preparation for the event. The only real fireworks of the day were generated in the third panel on debt collection litigation, a topic that has always been highly contentious.

That panel featured an interesting cross-section of stakeholders, including Brandon Black, formerly of debt buyer Encore Capital; Joann Needleman of NARCA; Judge Rizzo; Peter Holland, instructor at Maryland’s law school; and Maryland Assistant Attorney General Thomas Lawrie. At one point, Lawrie tacitly accused the ARM industry of not wanting collection case defendants to show up, allowing for more default judgments. When industry members pushed back noting that it’s in everyone’s best interest if the collection attorney and consumer speak, he directly accused the ARM industry of using those opportunities to “coerce” consumers into settlements.

To underscore exactly what the ARM industry can expect in the way of universal standards, an afternoon presentation by two FTC attorneys featured recently enacted state laws that enumerate requirements for account data before a debt collector or buyer can file a suit and in some cases commence debt collection activity.

For more detail on the event, check out insideARM’s Twitter feed from Thursday, or read our live blogging posts from the workshop:

John Tonetti: Flow During the Debt Cycle

Heather Allen: Overview of the FTC’s Debt Buyer Study

CFPB Panel 1: Info Available to Debt Collectors at Time of Assignment, Sale

CFPB Panel 2: Verifying Disputed Debts Under the FDCPA/FCRA