Recently, Kathy Kraninger, the director of the Consumer Financial Protection Bureau, toured a collection agency in Chicago. The trip was set up by Irwin Bernstein, the CEO of CMS Services. Irwin took the time to answer some questions from AccountsRecovery.net about the meeting and shared his thoughts about Kraninger.
How did the meeting get set up?
The CFPB reached out to me to, explained Kathy’s interest in learning about the collection space and her interest in visiting a collection floor to acquire a firsthand understanding of the collection process from the ground up and the challenges the industry faces. When I asked why me, they thought I have many opinions that are different and tend to look at both the consumer and agency points of view.
How did you prepare for the meeting?
Since this was to be Kathy’s first official visit with our industry, I reached out to our associations to gather talking points and material to be shared. I also reviewed my own submission to the CFPB’s initial collection [Advanced Notice of Proposed Rulemaking].
We conducted the visit at the offices of Harris and Harris, a very well-run, family-owned, Chicago-based collection agency with more than 500 employees and a focus in government, medical, and utility collections. Members of that firm’s management and I spent a significant amount of time creating a cohesive story that, in a very short time, allowed the CFPB team to see the extensive work that goes into the preparation of an account for collection and the activities of a collection floor. During the tour and in our presentation we also tried to paint a fair picture of the challenges facing our industry and the major hoops that are required for firms attempting to comply with today’s uncertain legal environment.
What kind of information was she most interested in?
She was extremely engaged during the entire visit. As I mentioned previously, she was very curious about the entire collection process, from attempting to contact a consumer and validate a proper contact through the talk off and dispute discussions. She took extensive notes and asked very pointed questions about the challenges in contacting and engaging consumers. We had a lively discussion about the many conflicting or challenging state laws and court decisions and the significant costs of maintaining a nationally licensed collection operation. One highlight was Arnie Harris showing his father’s first collection manual — it was all of eight pages long!
We discussed the definition of consumers and the importance of a collection agency being able to communicate with consumers to alert them to problems, address concerns, and arrange satisfactory settlement plans that properly dealt with the consumer’s particular concerns and hardships. This led to a further talk about the risk of increases in collection suits if communication was curtailed or deemed too risky.
We also spent time on the value of certainty and the need for the CFPB to engage consumer advocates that sought benefits for consumers rather than gray areas that opened up opportunities for their own litigation business.
How would you assess her knowledge and understanding of the credit and collection industry?
She was joined by Brian Johnson and Jennifer Stockett. Brian, especially, has been very engaged in the rulemaking and was very well versed in the issues facing our industry. Kathy was making her first official visit to a collection agency so was more engaged in a learning role. She impressed me with her attention to detail, her interest in seeing the entire process, and her focused questions and desire to understand the process before allowing the release of rules that may not meet the goal of creating fair rules that protect consumers while allowing business to conduct the important function of getting creditors paid for their goods and services
What are your impressions of her now that you’ve met her in person?
Very engaged and interested in the process and how to create a fair playing field. I’m looking forward to seeing her work and how she balances consumer needs with industry concerns.
What would you like to share with the rest of the ARM industry, having been one of the only industry professionals to have met with her?
Kathy, Brian and Jennifer are very interested in hearing from industry participants. They welcomed comments and looked anxious to understand the impacts that rules and regulations have on industry and its ability to engage consumers. They appeared ready to move forward with rulemaking while also wanting to ascertain that they understood both the direct and indirect impact of their decisions. I would encourage each member of the industry to feel free to engage either through correspondence or through participation in association events.
If you want to engage with the Bureau, a great way is to contact the CFPB Markets group led by John McNamara. Kathy mentioned she has quickly learned of his value to her due to his knowledge of the collection space and his success in gathering and reporting on the concerns of our industry.
Director Kraninger is a breath of fresh air. Unlike, Mr. Cortray, who was a rabid opponent of the ARM industry, she is taking her time to weigh the various effects of rulemaking against what is fair and reasonable. What I find extremely fortuitous is the fact that the CFPB approached a member of our industry looking to further educate themselves as to what actually takes place in a collection agency and what steps are being taken to assure that we are complying with all existing rules and regulations even though at time those regulations may create grey areas maintained to provide financial gain for predator law firms.
I only pray that Ms. Kraninger and her associates will have the strength and perseverance to withstand an extremely chaotic and self-serving Congress and its current socialist leanings.