On Tuesday, 19 January 2021, Massachusetts' Division of Banks hosted a webinar titled "Debt Collection Practices: Perspectives and Highlights from the Massachusetts Division of Banks and Useful Resources." (You can watch the full presentation here.)
The webinar reviewed the Division of Bank's regulatory oversight of debt collectors, highlighting the Division's approach to consumer finance examinations as well as reviewing past and current examination trends. Massachusetts DOB also discussed the ongoing nationwide collaborations involving multi-state examination efforts and consumer outreach campaigns, such as the recent "Operation Corrupt" Campaign.
This was a pretty comprehensive agenda, especially for only an hour, and not everything on the agenda was addressed. But here are the highlights:
- During the continuing pandemic, Mass. DOB's examinations of debt collectors has had a strong focus on the quality and frequency of calls made.
- The DOB is also focused on ensuring proper payment flow: that is, that payments from consumers are correct, that they aren't being assessed unnecessary (and illegal) fees, and that agency payment accounts are used appropriately.
- In collaboration with other states' regulators, the DOB is rolling out a new State Examination System in order to better coordinate efforts across states and with the Federal Government.
- Mass. DOB -- and other states -- are also starting to show an increased interest in data security measures companies have in place.
- As has been the practice generally, the DOB will focus most of its investigative time on agencies with high volumes; they see these companies as posing the greatest potential threat to consumers.
- Companies that are working payday loan accounts in Massachusetts were reminded that payday loans are complicated. Most payday loans in Massachusetts are not legal loans, which means a collection agency would have no right to collect on those debts. The relationship between payday loan client and collection agency is one that will need continual review to make sure agencies are not collecting on illegally granted payday loans.
One final note: Massachusetts has yet to fully compare their state laws with the incoming Regulation F. There may be changes, or realignments, to some of Massachusetts' rules for debt collectors after a complete review and comparison.