Creditors in the early 2000’s were very focused on one thing, portfolio liquidation performance. As time has passed and rules have changed, today the focus is split. Now, rather than just looking at the raw liquidation data, creditors now have a balance to strike, a balance between performance and compliance.
Understanding the Need for a Balance
Performance and compliance are not polar opposites, but strict compliance often creates additional steps to processes or other barriers to recovering the balance of an account. Since the creation of the CFPB (Consumer Financial Protection Bureau) compliance has taken over the driver’s seat of many debt buying organizations. The threat of receiving a $10,000,000 fine for non-compliance has become a real threat and for many businesses protecting against that type of consequence has taken priority over the ability to perform the businesses core function, liquidating receivables accounts.
Finding the Right Balance for Your Business
With these two forces each calling for priority, each business needs to find the right balance for them. Compliance is very important, but if you are not collecting any money, your business cannot survive. That is not to say that you should consider breaking the law, but it might require your business to make investments into the technology and tools needed to automate compliance functions, so you can continue to concentrate on the core of your business. Finding the right balance for your business can be a difficult task and the decisions you make should be driven by the type of business that you are, which types of accounts you are working and other factors.
National Debt Holdings Finds the Balance for Creditors
Companies like National Debt Holdings have been able to find the right balance of performance and compliance, a mix that works for them, their clients and their agency network. National Debt Holdings has made significant investments into having the right compliance technology to assist them with managing their internal compliance needs and the ability to automate the process of overseeing the compliance of their partners.
When asked about the balance achieved by National Debt Holdings, President Jeremy Poehler said “Finding a balance between performance and compliance is something we have worked hard to achieve over the last few years. This is a unique challenge and we found our balance through system and process management. Compliance would slow down performance, until we were able to find systematic ways of managing compliance at lightening speed, while using only the compliance staff that we already had.”
When it comes to compliance, the work is never done. The constantly changing regulatory landscape of the receivables management industry will continue to evolve over the coming years and debt buyers and collection agencies will need to continue to adapt to these changes.