Guest Editorial
Dear Recovery and Remarketing Professionals,
In an attempt to clarify some misunderstandings, and add factual information to the discussion, ARA is addressing the new requirements placed on the lending industry (the banks) by the CFPB that are also affecting us as third party service providers.
Lenders have been forced to make these changes because of what the law requires of them. This is not some arbitrary set of requirements that some vendor department thought up and placed on us. To be compliant, the lenders that hire us must adhere to the rules placed on them by the CFPB and the federal government. The CFPB has issued a bulletin numbered 2012-03 that is available to you to read so you, as a businessman, can understand compliance from the CFPB’s own directive. I am aware that each lender will develop its own risk-mitigation standards, but they will be based on this published directive.
Hostile blog posts and over-emotional comments about the banks are just showing how out of touch some people are with what is happening in their own industry. In many cases, I find that it looks like these attacks are on the “messenger” and not the authorities at the upper levels of the lender that made the decision. I am sure that almost all of these edicts are being handled at the senior compliance officer level and not at the recovery vendor manager level. I do not see where it is helpful to our industry’s image to attack those that are, many times over, trying to help us. Frankly, it makes us look unprofessional – which is the opposite of what we pride ourselves in being.
ARA strongly suggests that all agencies get a copy of CFPB third party servicing rules, and read them to see where/how they apply to you. If you have a lot of extra reading time, take a look at theCFPB act (Dodd-Frank) to get a taste of what our clients are up against. Hopefully, you, as an agency owner, will see why we have to become verifiably compliant. It’s not the lenders, as stated earlier.
Those who choose to say no to compliance verification services will only make it better for those of us who are willing to comply. The banking community has no say in this; it’s the Federal Government that’s dictating these laws. This is something we, as recovery professionals, need to get on top of – not fight or push against it. We should own it, embrace it, and we will prosper from it. Those who choose not to comply give their client no alternative but to find an agent that has become verified compliant.
I am proud that ARA has recognized the need for compliance training and verification and is working quickly to provide a solution from which our members will benefit. The track we are on now will only lead to more splintering within our industry and an increased financial burden on agency owners.
Sincerely,
Jim Hall
ARA Past President
Jim:
Thank you for your Editorial. I agree that compliance is a necessity and we ought to be as professional as possible in both our written and verbal communications at the public level.
I feel that all of the Associations have all done a wonderful job in getting their members CFPB compliant and in teaching us the importance of the compliancy.
Though it is as American as apple pie to not comply blindly and to resist Government regulation, I feel we do need some compliance for not only consumer protection, but our own as well.
It is with great hope, and lots of work, that we can begin to write and set standards for our industry for all to adhere to so that both the repossessor and the consumer are safe during the repossession experience. I feel NARS will be the best platform for this to happen.
There is a point I respectfully disagree with your editorial. You seem to have mixed Compliance with Compliance Verification Services. This may have been a simple matter of two thoughts converging as one on paper, but in case it was intentional, then I must disagree.
To be compliant is the one issue we all should agree on, but to subscribe to compliance verification services is completely another.
Many agencies have spent in to the thousands of dollars to become CFPB compliant. While initially I disagreed with this because the requirements are leveled at the lending institution. It is their responsibility to make sure all of their service providers are complaint. I succumbed to the process simply so our agency would be acceptable to the lenders in order to receive further work.
The concept, or business practice, of paying for an outside service to verify my credentials is ludicrous. While I hold no truck for those that have gone in to the Verification business, I will not pay someone else to tell a lender what I easily can tell them on my own. It is a middleman between middlemen. I do not feel it will ever be “required” to use a verification service and if it becomes so, then I will stop working for that lender. If all of the lenders require it, then I will go out of the repossession business and open a forwarding company that provides verification services, transportation services, skip tracing services, and any other dog & pony show that is slowly sucking this industry dry. If that is where all the repossession money is going to go, then I too will go there.