The ARM industry, and collection agencies specifically, are subject to regulation (and potential enforcement actions) from the Consumer Financial Protection Bureau (CFPB), the Federal Trade Commission (FTC), many states, and some cities.  Keeping up with potential changes can be challenging.  Some recent examples include the following.


On February 23, 2016 the State of Montana, Department of Administration, Division of Banking & Financial Institutions, issued a Memorandum that included the following opinion regarding the Montana Consumer Loan Act (Act):

“It is the opinion of the Division that the provisions of the Act continue to apply to an entity that acts as a servicer by receiving or accepting payments due pursuant to a Montana Consumer Loan and either keeping those payments or directing them to another entity(s). It is the opinion of the Division that a servicer of Montana Consumer Loans must be licensed under the Act.”

The Memorandum states one of the reasons:

“Mont. Code Ann. § 32-5-103(4) states, “Any loan made or collected in violation of subsection (1) by a person other than a licensee or a person exempt under subsection (5) is void, and the person does not have the right to collect, receive, or retain any principal, interest, fees, or other charges.” (Emphasis added.)

Second it is also clear that the drafters of I-164 intended that anyone who collects a Montana consumer loan must be a licensee under the Act. Mont. Code Ann. § 32-5-103(1) states, “Except as provided in subsection (5), a person may not engage in the business of making consumer loans in any amount and contract for, charge, or receive directly or indirectly on or in connection with any loan any compensation, whether for interest, fees, other consideration, or expense, except as provided in and authorized by this chapter.”

 A copy of the Memorandum can be found here.


As insideARM reported last month (August 25th) the Massachusetts Division of Banks made the following announcement:

The Massachusetts Division of Banks (Division) and the Massachusetts Office of the Attorney General are seeking input on the current state of debt collection and debt collection regulation within the Commonwealth. The Division and the Office of the Attorney General are considering whether changes to the statutory and regulatory framework regarding debt collection may be warranted.

The Division and the Office of the Attorney General welcome interested members of the public, consumers, consumer advocates, and industry members to attend an informational session and provide oral or written testimony regarding the current state of debt collection and regulation within the Commonwealth. The informational session will be conducted jointly by the Division and the Office of the Attorney General.

 The session will be held as follows:

When: September 22, 2016
Time: 10:00 a.m. – 12:00 p.m.
Where: 1000 Washington Street
Hearing Room 1-E, First Floor
Boston, MA 02118

It seems fairly clear that there will be some rulemaking coming out of that meeting. insideARM encourages debt collector participation in the September 22 hearing. Interested parties are encouraged to submit responses to a list of questions which can be found in this article.

Rhode Island

Recently, Edward (Ted) Smith, CFA, ACAMS, State Chief Bank Examiner, Department of Business Regulation sent out an email to all Rhode Island Licensed Debt Collectors. That email read:

To all Rhode Island – licensed Debt Collectors,

The State of Rhode Island has had numerous consumer complaints about “debt-collectors”.  It is, in fact, often our number one monthly consumer complaint.  These complaints are attracting increased interest from many groups, individuals and regulators in Rhode Island and across the country.

If you are not fully conversant with the Federal Debt Collection Practices Act, please review the following:

Rhode Island together with our Operation Collection Protection partners are stepping up enforcement.  For your review, here is the 2015 FTC and Federal, State and Local law enforcement press release:  In addition, the six attached PDFs detail recent enforcement results.

Should you have any questions, including education and training concerns, please contact me by hitting reply or emailing me at

Thank you for your efforts to ensure debt collection compliance.

It seems as if Rhode Island is putting debt collectors on notice that they will be joining forces with the FTC and vigorously pursue enforcement actions.


Just yesterday, the Office of the Commissioner of Financial Regulation for the State of Maryland, Department of Labor, Licensing and Regulation, sent an email to ARM companies currently licensed in Maryland, with the following notice:

“As part of the (Governor Larry) Hogan Administration’s focus on regulatory reform and customer service, the Commissioner of Financial Regulation is seeking comment from Maryland Collection Agency licensees about current regulations and statutes pertaining to your industry.   Additionally, our Office is seeking comment regarding our current policies, processes, and practices that licensees believe should be studied, amended, or repealed.

 The Commissioner invites your comments in writing on or before October 15, 2016 or by your participation in a forum for Maryland Collection Agency licensees to be hosted by the Commissioner on September 22, 2016 at 2 pm at 500 N. Calvert Street, Baltimore, MD  21202.   Please enter the building by using the Centre Street entrance and you will be directed to the meeting room.”

It is interesting (perhaps coincidental) that the Maryland hearing is the same day as the Massachusetts hearing. With a favorable flight schedule, an ambitious ARM executive or Compliance Officer could make most of both hearings.

Like Massachusetts, Maryland is soliciting regarding our current policies, processes, and practices that licensees believe should be studied, amended, or repealed. However unlike Massachusetts, Maryland has not published any specific list of questions.

ARM-U, a webinar series and virtual conference from insideARM, hosted a webinar yesterday on how to design a state licensing strategy. Recordings of that webinar will be available for Compliance Professionals Forum members free of charge at the conclusion of ARM-U. In the meantime, don’t miss the rest of ARM-U, which is free for everyone when broadcast live.


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