Collector - January 2018 - 23
on this issue regarding the unintended
consequences of these proposals and the
real negative impact the legislation would
have on consumers.
Garnishment will also continue to be a
hot topic. Last year Colorado, California,
Louisiana, Nebraska and Tennessee
considered legislation to significantly limit
garnishment procedures. Similar efforts are
expected to come back in these and other
states during the 2018 legislative sessions.
As of June 30, 2017, eight states managed
debt collection licenses in the Nationwide
Multistate Licensing System and Registry.
There are 1,189 companies in NMLS
that hold more than 3,600 approved
debt collection licenses. In 2018, several
additional states are expected to move
toward using the NMLS to manage their
debt collection licenses.
The NMLS is also expected to launch a
new modern platform next fall. Information
on the new NMLS platform as well as ways
to provide input on what's being developed
can be found here: https://new.nmls.org.
Overall, 2018 is looking to be a strong year
for mergers and acquisitions in the accounts
receivables management industry given the
changing regulatory environment and more
interest from buyers.
"In our engagements, we've seen that
owners that are considering a sale have
many more high-quality potential buyers to
speak with than in recent years," said Brian
Greenberg, CEO of Greenberg Advisors
LLC. For example, in 2017 one of his firm's
clients received more than 10 offers from
"We think that's indicative of the market
... and we think it will continue in 2018,"
Deregulation, or even a softer regulatory
environment, can lower the amount of
perceived risk in the collection industry,
enticing buyers to make investments in
debt collection firms.
With the increased interest comes more
competition, and sellers need to make
sure they have a "differentiated service or
technology offering that will drive buyer
interest and therefore result in a completed
transaction," Greenberg said.
Potential sellers with a high "client
concentration," when a significant portion
of their revenue is derived from one client
or a handful of clients, may face challenges
in the marketplace.
CONSUMER FINANCES &
Economist Bill Conerly predicted in Forbes
that consumer spending would remain
weak through early 2018, but
after that "wages will rise, improving
incomes and enabling faster growth
of consumer spending."
Meanwhile, the lending world continues to
swell with credit cards-outstanding revolving
debt levels reached a record high in 2017.
Student and auto loans are also on the rise, and
all of this will affect the volume of accounts that
go out into the agency world this year.
Social Security will see some changes in
the coming year. The good news: recipients
will see a 2 percent cost of living benefit
increase starting in January. The lessgood news: as a result of this cost of living
adjustment, some people will see their
Medicare premiums go up a bit in 2018.
Slowly but surely, collection agencies
are engaging consumers through websites,
emails and even text messaging, though use
is still fairly conservative due to regulatory
In one recent case, Lavallee v. Med-1
Solutions, LLC, the court ruled that a validation
letter attached to an email did not comply
with the Fair Debt Collection Practices Act.
While Med-1 Solutions attempted to be as
compliant and secure as possible, the Indiana
court decided the process surrounding its email
communication was flawed. Decisions like this
only add to agencies' hesitation to communicate
with consumers in the manner they prefer.
Industry experts are hoping the CFPB provides
some clarity on this issue in its proposed rules
for the debt collection industry.
Anne Rosso May is editor of Collector
State legislatures will
be very busy from midJanuary through early May,
but this activity will wane in
early summer as campaign
pressures increase with the
looming November election.
2018 is looking to
be a strong year for
mergers and acquisitions
in the accounts receivables
management industry given
the changing regulatory
environment and increased
Expect to see action
Department of Education's
approach to loan servicing
as well movement on
reauthorization of the
Higher Education Act.