ACA International Board Halts Plans for Self Regulation in Collection Industry

ACA International’s Board of Directors moved quickly Wednesday to halt proposed legislation that sought to create a self-regulation structure for the debt collection and purchasing industry after complaints from some of the board members.

The plan would have included federal mandates for state licensing and registration for agencies and collectors, and called for an industry education program run by ACA International.

Some board members told insideARM that ACA’s executive committee submitted the proposal in late September to Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, as an amendment to legislation that would create the Consumer Financial Protection Agency (CFPA). Sources said Frank could have introduced the proposal within two weeks.  

In July, ACA board members gave its executive committee the power to study and, if feasible, draw up a plan for a self-regulatory structure, complete with a nationwide debt collector registry and dispute resolution program.

But during a special meeting Wednesday of the board at ACA’s annual Fall Forum Conference in Chicago, directors voted to take away that authority. The board also directed the executive committee to withdraw, in writing and within 24 hours of the meeting’s end, its amendment proposal, and confirm to all board members the proposal’s withdrawal to Rep. Frank and other political bodies by Friday.

ACA National Board of Director member Jerry Greenblatt told insideARM he was “very happy” with the outcome of the vote. “What’s happened with the passage of this motion is that the decision making within ACA is slowly being given back to ACA members.” He added that the vote to withdraw the proposal “is a great victory for the members of the association, especially the small and mid-size agencies.”

ACA spokesman John Nemo told insideARM that the association will continue to study the issue while incorporating and addressing the concerns of the membership.

“We are a member driven organization. We listen to our membership,” Nemo said. “There was no intent to try to deceive anyone or do anything behind the scenes.  We understand that this is an incredibly sensitive and important issue, perhaps the biggest one since the Fair Debt Collection Practices Act (FDCPA) passed, and we want to make sure we do as good a job as possible of being transparent about the process and making sure our board of directors and our membership at large are informed and able to give their input.”

ACA’s actions regarding a self regulation program raised questions within its membership and in the broader accounts receivable management industry.

Emil Hartleb, executive director of Commercial Collection Agency Association, told insideARM that ACA’s approach to self regulation was “fraught with danger for the industry.”  

“Anytime you look at licensing or registration, there are unintended consequences that will come out. We don’t need more licensing. What we need is hard enforcement against rogue agencies who are committing these atrocities,” Hartleb said.

David Goch, legislative counsel for the Commercial Law League of America told inside ARM he was “surprised” to learn about a proposal by ACA to apparently legislatively create a debt collection industry licensing body.