3 Major Steps to Maintain Confidence in Your Compliance

starzec michaelIn the modern compliance era, collection law veterans have become inured to seemingly relentless rounds of annual, bi-annual, and quarterly testing, certification and recertification exams that we take on a yearly basis. For us, compliance is used to improve your practice, modernize workflow and protect against audit failures. Indeed, it becomes cost-effective as you avoid risk and attract business with robust compliance controls. However, your associate attorneys often do not perceive these impacts as they wrestle with compliance on a day-to-day basis.

In the not-so-distant past, I managed our associate attorneys, that tenure ending just as the reality of CFPB oversight lead to compliance-heavy training and testing. Then, as now, the allure of collections was the promise of a steady diet of court, arguing many substantive motions and obtaining significant trial practice. At that time, after a few hours of FDCPA training and testing and a quick review of the employee manual, a new associate was with attorneys on day one, reviewing case law and learning how to prepare a court call. By day two, they were shadowing an attorney in court.

Now, an associate won’t see an attorney or think about the law (other than the FDCPA) until their fourth day at the firm. In addition, depending on the client, a new attorney may take up to 14 different tests. And these tests cover areas as diverse as Fair Lending to the American with Disabilities Act to Anti-Money Laundering. In fact, at one point, for a mortgage lender we actually had a test on the federal Flood Insurance compliance. (Not surprisingly, flood insurance was never raised by a defendant in a single case we handled for that client.)

But when we reflect on the training, it is not surprising a new associate leaves bewildered. First, they take a test on the FCRA but later are informed attorneys cannot discuss the implications of the FCRA in settlement discussions. While they never process an electronic payment, they learn about the Electronic Fund Transfer Act (EFTA). They wonder if they would confront claims of inappropriate access to bank facilities. And, from all of this testing most of the attorneys immediately realize that simple, honest mistakes can result in FDCPA lawsuits. One associate noted that as attorneys handle the case last, they are the line of last resort to prevent a lawsuit.

- Click here for the Electronic Fund Transfer Act and checklist (Collection Advisor Professional Network Members Only) -

This sobering realization is useful information for all of us with management roles. While we want to create a compliance culture, we do not want to have employees constantly on edge, fearing decision making. For that reason, our firm has made efforts to ensure our attorneys can practice law and compliance with confidence.

1. See the Whole Process

First, we try to ensure that we don’t let our various departments work in a vacuum. Therefore, we expose our attorneys to the entire process, from placement review to filing of post-judgment remedies. Not simply to know how a file gets to court, but to let them know that there are people and processes in place to detect mistakes or changes in the circumstances of the file.

2. Someone to Summarize

Second, because we as partners and managers are engaged more often in disseminating information rather than having to act on that information, it is critical to come up with ways to cope with the sheer volume of material that falls upon the staff. On a monthly basis, think how many times we receive client updates or are issued an entirely new client guide comprising hundreds of pages. And all of these changes are acknowledged with a simple click of the mouse. With the amount of work an attorney must perform, synthesizing that information into actionable intelligence is nearly impossible. To combat information overload, at our attorney meetings, we have an attorney who is responsible for summarizing all the changes that may impact our attorneys over the course of that month. We quickly discovered that these summaries yielded discussion, questions and feedback. Something we rarely obtained by simple email dissemination.

3. Re-Familiarize with the Workload

Finally, it is important to re-familiarize yourself with the day-to-day work your attorney performs. Walk into their offices, find out what issues they are facing, find out how much the practice of collection law has changed since we were the ones running around the court house. Having effective lines of face-to-face communication leads great benefits to staff morale and leads not simply to work satisfaction but breeds a culture of cooperative compliance and teamwork that can only enhance the effectiveness of your practice.

Michael L. Starzec is a partner with Blitt and Gaines, P.C and is vicepresident of the Illinois Creditors Bar. He is a frequent speaker, writer and litigator on creditor’s rights.