I just returned to my office from teaching a seminar related to understanding and responding to the expectations of the CFPB. We had a packed room, 40 people or more, and all the participants had a few characteristics in common. First, I felt an overwhelming feeling of disbelief, as in “Can they really make us do all this stuff?” Second, I felt an even more overwhelming feeling of frustration, as in “How can we do all this stuff?” Third, I felt a very strong sentiment of self-righteousness, as in “How dare they make us do all this stuff?” These are natural reactions! After all, the vast majority of collection agencies are small companies with 25 employees or less, yet the collection numbers they are able to generate with such a small staff puts them totteringly close to the $10 million in gross collections line that the large market participant rule draws for agencies subject to supervision. Granted, for many, much of that is generated from the collection of medical debt, which may exempt them from supervisory examinations. But even so, they want to be prepared for the knock of the enforcement team, all the while hoping that never happens, and to implement forthcoming rules, even if they might not be subject to supervisory examination. This is a healthy approach to the reality.
The dilemma, then, is akin to how to eat an elephant. Looking at the CFPB examination manuals for debt collection, UDAAP, and compliance management systems alone, there are hundreds of items which examiners are directed to seek and evaluate. Not only do we expect to have to produce thousands of pages of documentation, we will need to produce records showing: the documentation has been provided in an appropriate manner to the appropriate people; those people have actually absorbed and understand the documentation; they are performing in accordance with it; we are monitoring their compliance with it; and we are taking corrective action when we discover defects in their performance.
Like eating an elephant, we must break this process down into manageable bites. Like any other project we take on, we have to have a plan. You would not think of installing a new phone system without a plan, right? I suggest a granular approach.
1. Write Policies and Procedures
Start with the most basic, build your foundation, and work your way up. For example, where is the greatest risk to consumers in your organization? Let’s assume it is the work performed day in and day out by your collectors— after all, they have the most direct and frequent contact with consumers. We look at what the FDCPA requires them to do, and prohibits them from doing, and we write policies and procedures related to those actions. We have to think broadly, and think about the process that we train, or that people learn from experience, in our offices.
2. Train Collectors How To Operate Within The Policy
The procedure section of the policy will tell your staff how to carry it out. For example, if your policy says your collectors identify themselves on every call, your procedure section might explain how and when to identify themselves. Do you want them to use their first name, their last name, a combination, their real name, an alias? When should they identify themselves? These procedures will drive your training.
3. Monitor Performance
Remember the saying “What gets measured gets done?” After training the behaviors our policies define, we monitor the performance of the staff who are expected to comply with the policy. This is where the server full of calls you have recorded and only access in an emergency will come in handy. Listen to the calls that occur post-training to see if the behavior expectations outlined in your policies are being executed as trained. Create forms you can use to ensure that every person conducting monitoring is doing it the same way. Conduct calibration sessions to ensure consistency.
4. Take Corrective Action
At the very least, provide correction to anyone who does not perform to expectations. Review the training you have previously provided with them. Ask them to restate back to you in their own words what the expectation is, and how they plan to perform the expectation going forward. Document the conversation. To ensure your feedback isn’t always about making corrections, be sure to communicate when your monitoring finds performance that meets the expectations, and reward good performers. This will help to reinforce the positive behaviors you desire and support the culture of compliance that you are trying to build.
5. Start Over Again With The Next Policy
Think of this process as a cycle. You are really never finished with the process. The examination procedures expect to see a training schedule for a rolling 12-month period into the future.
As you begin to write and implement policies, you will find the structure they provide promotes an environment of fair treatment for consumers and employees alike. You will be able to more objectively identify collectors who are not a good fit for your organization. While we may think the small size of our agency precludes the need for this kind of structure, in the long run you will find having policies and procedures which are trained, reinforced, and respected will result in higher levels of consistent practices and maybe even better results.
Debra Ciskey is the Compliance Officer at Wakefield & Associates. Inc. She is a member of the board of directors and a certified instructor for ACA International.