CARES Act Business Processes Redefined LLC

After several days of partisan wrangling, the United States Senate finally, and unanimously, passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) on the evening of March 25, 2020.  It is expected to become law this week.

            Fortunately, the CARES Act does NOT include several provisions that had been proposed in the House of Representatives and would have devastated the accounts receivable management (ARM) industry.  To the contrary, the Act includes numerous provisions designed to help small businesses, including ARM companies, and provides $350 billion in aid and support for financial institutions and hospitals that many such companies service.

            A House bill draft which circulated earlier this week had included draconian restrictions on the ARM industry, including several restrictions on collection procedures and enforcement mechanisms.  Such restrictions would have not only crippled ARM companies but eliminated the assistance they provide to debt-laden consumers at a time when such consumers need help desperately.  More now than ever, consumers require assistance and direction as to how to pay or dispute a bill, to receive clarification concerning the source of debts, to develop payment plans which could halt further collection efforts, and to identify potential identity theft.  Had it been adopted, the House bill would have eliminated all such consumer resources, in addition to destroying countless ARM companies.

            Debt collection professionals have experience in dealing with natural disasters and other troubling times, and they have knowledge of training and hardship programs designed to help consumers address their individual financial situations.  Disrupting the work of ARM companies would deprive consumers of those benefits, which in turn would harm lenders, medical providers, and other businesses by undermining their consumer relationships and the credit ecosystem which sustains such relationships.

            Additional stand-alone bills targeting debt collection activities in the wake of the COVID-19 pandemic have been introduced in the past several days.  As it considers such proposals, Congress must recognize the critical importance that the ARM industry plays in our economy and the enormous benefits that it provides to consumers, especially this unprecedented trying time.                              

Business Processes Redefined LLC