CMC's Industry Advisory Group discusses compliance, other critical topics in collections.

Collections Marketing Center, Inc. (CMC) is pleased to launch its blog with the following findings from its recent Industry Advisory Group (IAG) meeting, where thought leaders representing nearly 30 of the industry’s top lenders and service providers gathered to share insights and perspectives on the major challenges facing the industry in the coming year.  Some of the key topic areas covered:

Meeting Introduction and Theme

Vytas Kisielius, CEO of CMC, introduced the meeting’s theme: “Has the industry’s ‘strike zone’ changed, and what can we do about it?” with a summary of IAG members’ responses to a pre-IAG survey: whereas reducing losses was THE concern two years ago and cost reduction topped last year’s survey, the issue preoccupying the majority of respondents’ executive attention in this year’s feedback was regulatory compliance.  He then covered the implications on spending plans of the technology adoption anticipated by respondents, as well as CMC’s progress in its technology, infrastructure, and business growth in the past 12 months.

Current Industry Outlook

Matt Scarborough, CEO of Bridgeforce, shared the leading consultancy’s perspective on the impact of our gradual-but-painfully-slower-than-hoped economic recovery in terms of focusing creditors’ behaviors toward re-gaining revenue traction versus shoring up operations.  Banks’ focus on regulatory compliance spending is crowding out the necessary investment in efficiency and effectiveness; it is this investment that should be viewed, he argued, as a ‘cost of doing business’ rather than diverting spend to temporary fixes that distract the organization while competitors who previously invested in a strong foundation of automation-based operational efficiency continue to build a superior competitive position based on their operational and cost advantage.  He recommended that creditors analyze complaints proactively and take actions to improve their operations now in order to avoid future regulatory actions.

User Perspectives

Collections Solution Product Manager for TSYS, presented the various components of a comprehensive collections operation, highlighting the interdependencies that arise from the desire on the part of enlightened collections executives to treat each debtor individually and maintain a single conversation across numerous departments and touch points.  She then reviewed how TSYS and CMC combined capabilities to address this problem in the TSYS Collections solution.

Collections and Loan Modifications Manager for RBS Citizens, presented the results of the bank’s recent deployment of FlexCollect as their collections platform: significant FTE savings while roll rates and losses were reduced, leading to a dramatic reduction in loss reserves.  A new initiative in loan modification will be Greg’s newest undertaking, in which he hopes to post similarly strong results.

Collections Strategy Manager for Barclaycard, presented the bank’s positive experience leveraging email enticements to increase online payment and program acceptance volume using a substantially more efficient self-service channel and freeing agents to handle more specialized cases.

Collections Strategy Manager for Sallie Mae, reviewed the lender’s success in deploying live chat on their online collections platform to reach ‘spinners’ and target online conversations with impossible-to-reach or high-risk debtors rather than every debtor.  Providing this option, she reported, “increases the perception on the part of our borrowers that we’re flexible and easy to deal with… which helps our collections efforts”.

Peter Blau, Principal of Customer Growth, presented his firm’s successes in helping creditors redesign their campaign’s content and execution in enticing more borrowers to utilize self-service options; he also offered to provide IAG members with a trial of the consultative help that can propel them to greater effectiveness.

Compliance Panel Discussion

Dawn Willey of Bridgeforce, Bill Weinstein of Weinstein & Riley, and Tony L’Abbate of NCO collaborated to bring IAG members their collective expertise on this topic that loomed broadly over all of the day’s discussions. The panel covered the compliance implications in such diverse areas as Operating Policies/Procedures, Documentation and Disclosures, Contact Management Strategies, and Vendor Management (subject of a CFPB bulletin issued this past Friday).  Bill provided comprehensive Exhibits detailing recent developments regarding the TCPA, FDCPA and CFPB, which he elaborated by saying that those regulations had generally become less unfavorable to the industry but that the “penumbra of fear” caused by uncertainty over what the CFPB would actually require was still blocking a lot of much-needed innovation.  Tony pointed out that more and more creditors are pursuing zero tolerance policies in reviewing the performance of their outsourced agencies, and that Compliance Scorecards were quickly taking their place alongside the financial performance metrics.  Dawn added that the more proactive an operation could become, especially concerning SCRA and UDAAP-related issues, the more likely they would be to withstand an audit and forestall any negative enforcement rulings.

General

Attendees generally agreed that getting minimum acceptable standards defined by CFPB would mitigate, but not eliminate, the greatest immediate-term threat, which is that posed by activist Attorneys-General in several states.  As a follow-on activity, CMC has gathered the IAG’s “collective wisdom” in order to provide the CFPB with an enumeration of the crucial “asks” the industry would like to see from the bureau in clarifying how they will approach their newly-empowered roles in regulating, supervising and enforcing debt collection behaviors and practices.