Collector - July/Aug 2021 - 40

PERSPECTIVES
How I Do It
The Debt Buying Market
Comes of Age
ACA member breaks down the buyer/seller relationship.
The relationship between debt buyers and sellers is complex. We chatted with
Janice M. Boyd, president/CEO of JMB Global Services, about what these partnerships
look like today, and how sellers can rely on buyers to protect their public image.
Q How has the debt buying
market changed in the last
10 years?
A Several years ago, there was not
a lot of structure to the overall debt
Janice M. Boyd
Title: President/CEO
Company: JMB Global Services
Location: Stewartstown,
Pennsylvania
sale process. And there was no uniformity
to consumer communication
after the sale. That changed when the
Consumer Financial Protection
Bureau placed a major focus on our
industry. It was a very good thing,
in my opinion, and we saw a lot
of debt buyers exit the industry that
were just not on the forefront of
compliance and security. Today you
must have a very strong compliance
department in place, which typically
includes a chief compliance officer to
stay current on all legal and regulatory
requirements, stringent compliance
policies and procedures, security
certifications, etc. to protect internal
operations and your sellers.
The CFPB's rules and guidelines provided
great insight to sellers as to what areas
are critical when assessing a potential new
buyer for their portfolios. Their main goal
is protecting all parties: the consumer, the
sellers and the buyers.
Before the CFPB everything was about
price, price, price. Today it is a combination
of many variables. Price should not be
the only consideration when deciding on
which buyer to select to purchase a portfolio.
It is critical to evaluate the buyer's
security and compliance policies, financial
stability, operations and reputation in
the marketplace.
40
acainternational.org
Q What are the top three
things that are negotiated
between the buyer and
the seller?
A First is the no-resell clause, or the
conditions that need to be met if they are
going to allow it. If the seller is open for
resale, they will typically require the buyer
to provide the name of the next buyer
and conduct a full due diligence prior to
final approval on resale. This process can
increase the overall price; however, we
typically advise our sellers not to allow it
due to brand protection. I would say that
sellers typically do not allow any resale
about 70% of the time.
If it's a passive buyer, most sellers will
request details on the buyer's agency network.
Since the buyer is not servicing the
purchased debt directly, necessary controls
are implemented for the agencies to ensure
strict compliant operations. The seller will
approve or deny a suggested agency within
the network based on the review of their
internal policies and procedures. This is
just another example of additional safeguards
to protect the seller's best interest.
It is very common today.
The third factor is if they allow legal
collections. The decision to allow legal
collections impacts the pricing of the portfolio.
If you are allowed to implement
a legal strategy in servicing the portfolio,
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Collector - July/Aug 2021

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