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#106368 - 08/14/03 06:33 PM Collection Agency
Ski Offline
Platinum Poster
Joined: May 2003
Posts: 639
South Louisiana
The bank just entered into a relationship with a collection agency to collect loans 60 days or more past due. FDCPA has not been an issue, but what effect does this new relationship have on it?

Any thoughts/help is appreciated.

Dave Majkowski, CRCM
Compliance Manager
Farmers-Merchants Bank & Trust
Breaux Bridge, La.

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Lending Compliance
#106369 - 08/14/03 07:36 PM Re: Collection Agency
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 46,762
Bloomington, IN
Once the loan goes to the collection agency it is now in a "third party's hands". They will have to comply with the FDCPA. (Not sure if this is what you were asking.)
The opinions expressed are mine and they are not to be taken as legal advice.

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#106370 - 08/14/03 09:42 PM Re: Collection Agency
1 Peter 5:7 Offline
Diamond Poster
1 Peter 5:7
Joined: Jun 2001
Posts: 1,339
Adding to Dan's comment, you might ask bank management if they intend the collection agency to collect in the name of the bank giving the appearance of a first party collection. This is a trend in the world of outsourced collections the last few years. If so, I'd recommend you consult outside counsel for an opinion. You want to avoid the bank becoming a "debt collector" under the FDCPA.
Opinions are mine not my employer's, and should not be taken as legal advice.

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#106371 - 08/14/03 09:50 PM Re: Collection Agency
redsfan Offline
Power Poster
Joined: Dec 2000
Posts: 3,455
The Pennant Race
And even if they aren't doing "first party" collection, you will want to monitor their efforts on your behalf to be sure that they are complying with the requirements of FDCPA. If they are abusing your customers, even those who are in default, your bank will be the one to take the reputation hit.
The opinions expressed here are personal and do not represent opinions of my employer.

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#106372 - 08/15/03 07:47 PM Re: Collection Agency

What about privacy implications? How about turning accounts over for collection and reporting customers to Chex Systems. I read something in a course about not reporting account numbers. I was not sure if that applied to turning overdrawn accounts over for collection. Chex Systems is a third party. Appreciate your thoughts?

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#106373 - 08/16/03 01:00 PM Re: Collection Agency
tuma Offline
Gold Star
Joined: Feb 2003
Posts: 368
Here & There
regarding Privacy; since it is a collection, it is generally exempt, but you should still check on the agency's privacy practices and policies. This link may help: click here

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