1. Hot Topics in Compliance NCHER Annual Conference - June 5, 2018
Elise Nowikowski, Principal – Evidens Group
Larry Laskey, Vice President and General Counsel – Windham Professionals
Jaye O’Connell, Director of Collections, Compliance & Information Security Officer – VSAC

2. Electronic Signatures in Global & National Commerce Act (ESIGN)
Enacted June 30, 2000
Did you know? June 30 is “National ESIGN Day”
Electronic signatures & records are equal to paper documents provided that valid disclosures are provided & consents are obtained
Required if the law, regulation, or other rule of law requires information to be provided in writing (i.e., paper)
policy to practice

3. Electronic Communications
FDCPA (and some states)
Disclosure requirements
“Inconvenient” contact rules
Third party disclosure
Validation notices (and post-dated check letters)
Cessation of activity pending debt verification
eSIGN
“Consent” to providing information electronically if required to be in writing
GLB (and client security requirements)
New York ( other than for validation notices and not to work address)
November 25, 2018
Confidential - © Copyright Windham Professionals Inc.

4. Electronic Communications
How to include all disclosures in a text message?
Avoiding third party disclosure
“from” and “subject” line
Add space to accommodate preview mode
Send s only during permitted call times
What about work addresses?
Not in NY
BCFP proposes (non-transferrable) consent
November 25, 2018
Confidential - © Copyright Windham Professionals Inc.

5. Electronic Communications
Must you use a password-protected attachment, or link to a secure site?
Does that create a second FDCPA “communication”?
Will consumers open it (especially from an unrecognized source)?
Electronic Communications Privacy Act/Stored Communications Act?
November 25, 2018
Confidential - © Copyright Windham Professionals Inc.

6. Validation Notices (Outside of NY)
Written validation notice must be sent; receipt is a “rebuttable presumption”
“…there is no evidence that (the consumer) should have recognized as safe an from (the debt collector). Today, users are regularly warned …to beware of … web-based attachments”
Conveyance of debt validation must be sent by mail
November 25, 2018
Confidential - © Copyright Windham Professionals Inc.

7. Confidential - © Copyright 2016 - Windham Professionals Inc.
eSIGN “Consent”
Consent to receive electronically that which must be provided in writing
Specific disclosures
Assurance consumer can receive the communication
What if you don’t have it?
Retain proof of access and have “paper” alternative within requisite 5 days; or
Absent consent, 1692g “sent” requirement is not met
Is creditor-obtained consent transferrable?
Scope of consent
Hardware/software requirements and “proof” of accessibility?
Administration of revocation/contact information update process?
November 25, 2018
Confidential - © Copyright Windham Professionals Inc.

8. “We Really Want More Regulation...”
…Was not said, by anyone, ever (except maybe us?)
FDCPA
Strict lability statute
“least sophisticated consumer” review standard
“Difficult” judicial interpretations
Not readily adaptable to use of technology
Impairing ability to reach consumers with information and alternatives
Increases likelihood of
Unwanted calls
Litigation/Garnishment
November 25, 2018
Confidential - © Copyright Windham Professionals Inc.

9. Appropriate Regulations May…
Promote use of electronic communications
Text links to required disclosures
attachments/links part of a single “communication”
Ability to reach borrower (clear, reasonable third party disclosure rules)
Re-interpretation of FDCPA “communication”
Exclude “unintended” disclosures
Interpretation of what constitutes direct consumer consent
Address “call labelling”
November 25, 2018
Confidential - © Copyright Windham Professionals Inc.

10. Appropriate Regulations May…
Standardize disclosures (and permit them by link/attachment)
Validation notices
Interest accrual
Collection costs
November 25, 2018
Confidential - © Copyright Windham Professionals Inc.

11. ESIGN experience
Global ESIGN Disclosure & Consent as initial step of web portal registration (new and existing customers)
Registration requires acceptance of consent
Private loan origination process –
Separate ESIGN Disclosure & Consent
Scope specific to applying for private loan

12. Telephone Consumer Protection Act (TCPA)
Automated Dialing Systems (ATDS)
Calls, Texts, & Recorded Messages
Prior Express Consent – Defined Scripts
Revocation policy
Compliance with a law never implemented (BBA of 2015), varying court cases, & FCC rulings ???
policy to practice

13. TCPA (Still) DC Circuit Court of Appeals
Interpreted “ATDS” too broadly and lacks clarity
“potential” capacity sweeps in smart phones (unless focus on “to make a call”)
Unclear as to requisite functionality
Random or sequential number generation
Human intervention
FCC can interpret “called party” as subscriber
“One call” reassigned number rule does not affect intended “balance”
No reason why second call entitled to any less reasonable reliance
Consent revocation can be by any reasonable means
But, we may be able to define reasonable
Phone, mail, ?
November 25, 2018
Confidential - © Copyright Windham Professionals Inc.

14. FCC Request for Comment
Definition of ATDS?
What constitutes “capacity” and what are the relevant functions
When is a system “automatic”
Must it be able to generate and dial random or sequential numbers
What does “making a call” mean in terms of using ATDS “capacity” 
Who is the (reassigned numbers) “called party”?
What opt out mechanisms would make other not “reasonable”?
Are federal contractors are covered under TCPA?”
November 25, 2018
Confidential - © Copyright Windham Professionals Inc.

15. Confidential - © Copyright 2016 - Windham Professionals Inc.
AND MEANWHILE …
In Florida
Prior FCC Orders (2003, 2008 or 2015) were not overruled
“Capacity” found too expansive, but not status of predictive dialers
FCC could not be “of two minds” as to need for on random/sequential capacity, but didn’t decide, and neither can the court
Use of predictive dialer, absent human intervention, = ATDS
In Arizona
No clear guidance on random/sequential issue from FCC, so need not follow
“Potential capacity” has been set aside, as has rejection of a “human intervention” test
Web-based platform sending manually-created messages to pre-determined numbers input by user was not ATDS
November 25, 2018
Confidential - © Copyright Windham Professionals Inc.

16. Confidential - © Copyright 2016 - Windham Professionals Inc.
AND MEANWHILE…
In Nevada
Inconsistency as to random/sequential number capacity = need it for ATDS
No proof that outbound dialing system had that capacity (who placed the calls?)
Even following FCC, human intervention = no ATDS
Manual clicker used with an automated outbound dialing system = no ATDS
In Georgia
Same manual clicker technology
“Potential capacity” goes too far
Requiring manual dialing all 10 digits for human intervention also “goes too far”
Presence of human intervention = no ATDS
November 25, 2018
Confidential - © Copyright Windham Professionals Inc.

17. TCPA
TCPA Scorecard: tool to support risk assessment including controls to mitigate risk, gaps and remediation
Control Example: Collecting & Tracking Cell Phone Consent
In credit agreements and applications
Phone script used for obtaining verbal consent
Tracking borrower revocation of consent
Active/passive consent and implications for revocations

18. Three categories - Monitor Implement State Laws Servicing requirements
Licensing requirements
Servicing requirements
Ombudsman requirements
Monitor
Implement
policy to practice

19. State Laws State Law experience Resourcing State Law Compliance
cost and complexity
overview of compliance workload

20. Bureau of Consumer Financial Protection (BCPB)
Small participant approach
Complaint tracking, metrics, monthly reports
Reliance on student loan trade associations/internal resources to support issue spotting of BCFP activity with potential impacts
Compliance assessments in response to published BCFP Bulletins, Complaint Reports, Supervisory Highlights, consent orders/actions

21. Guaranty Agency Issues
Old news: No consensus on Borrower Defense Neg Reg
Tentative agreement on Issue Paper 7; waiting for NPRM
In progress: Onsite security audits
VSAC internal annual self-assessment in advance of onsite review
Up Next: TOP Weekly Certification

22. Hot Topics in Compliance NCHER Annual Conference - June 5, 2018
Questions ????