NACM Oregon
Business Credit Journal January/February 2013
The CFPB’s Rules Could Affect You Brenda Terreault, JD, CBA
In This Issue CFPB Rules............................. 1 Member Profile....................... 2 Chair’s Message...................... 3 President’s Message................ 3
U
p to now, only creditors doing business with consumers have been concerned with the new Consumer Finance Protection Bureau (CFPB). On January 1, 2013, the CFPB’s “Larger Participant Rule” will go into effect. At first glance, this Rule applies only to collection agencies, debt buyers, and collection law firms that earn $10 million or more in revenue from consumer debt.
International Corner................ 8
Because this is new regulation, there is nothing providing regulatory interpretation. All anyone can do is review the new Rule and anticipate its implications for trade creditors. There are some catch-all clauses in the regulations that should be considered critically. They may impact creditors, if not now, then potentially in the future, either through case law, amendments, or continued regulatory changes.
Upcoming Events.................... 10
Fair Debt Collection Practices Act
Collection Trends.................... 4 Scholarships........................... 6 New Designee’s...................... 7
BCLC Webinars....................... 12 Open House Pics..................... 14 Contacts................................. 16
One thing that may apply the Rule to first-party trade creditors is the Rule’s definition of “debt collector.” The definition in the new regulations tracks the definition for “debt collector” under the Fair Debt Collection Practices Act (FDCPA). The FDCPA applies the least-sophisticated-debtor test to determine whether a first-party creditor can be treated as a third-party participant. If the least-sophisticated-debtor could believe a first-party collector is a third-party collector, the first-party creditor could be declared a third-part collector for legal ...continue on page 15
Reasons to Use NACM’s National Trade Credit Report
A
national service offered by a growing list of dozens of offices throughout the United States, the NACM National Trade Credit Report (NTCR) has quickly become a remarkably useful tool for companies curious about their potential customers’ creditworthiness. There are endless reasons to
use it, but here are some to get you started. Accuracy: The NTCR is offered by more than 40 offices around the country and provides users access to accounts receivable information submitted by more than 10,000 businesses and 1,000 industry trade credit
groups nationwide. This adds up to more than ten million current lines of trade data on the NTCR database. Having such a deep well of information to draw from means the NTCR provides a complete picture, and one that’s as accurate and timely as anything on the market today.
Relevance: All of this trade data is uploaded by those 10,000 businesses—big and small—on a daily basis. That means the information included in the NTCR is timely and ready to use right now. The data submitted is also especially applicable to the function of ...continue on page 9
Page 1
7931 NE Halsey, Suite 200
Portland, Oregon 97213
Tel 503.257.0802
Fax 503.257.0247
www.nacmoregon.org
Pictured l to r: Nick Merriman, Nick Merriman Jr., Katie Merriman, and Pat Merriman.
Member Profile
M
asons Supply Company was founded in 1922 in a horse barn at the intersection of SE Water Ave. and Madison St., by J.D. Mackie and D.V. Jennings. It soon moved to its current location blocks away at SE 12th Ave. and Clinton St., where SE Milwaukie splits to form Portland avenues 11 and 12. Though the masonry supply—mostly related to concrete forming these days—business has been open for more than ninety years, it was the purchase of the company by Nick Merriman in 1967 that things began to change. William Nicholas Merriman—Nick to everyone who knew him—was from Tekoa, a small town in eastern Washington, just miles from the Coeur d’Alene Reservation. After studying Business Administration and Economics at the University of Washington, Merriman married and left for San Francisco to work for Inland Steel Company. Seeking better advantages for business and raising a family, Merriman brought his wife and six kids back to the Pacific Northwest in the 1960s. Jennings, one of the original owners of Masons Supply, passed away and the business was up for sale. It was a friend of Merriman’s who brought up the purchase. He wanted Merriman to come on board and run it as the General Manager. In the mid-1960s, Masons Supply sold “hard” materials— mostly brick, plaster, and sheet rock. They began diversifying into concrete forming and accessories. W. Nick Merriman’s sons, Pat, Nick, and Tom started working for their dad. Later on their sister, Jill, and brother-in-law, Don Clark, joined the company as well. In the 1980s, the business began expanding, with their first branch opening in Seattle. Since then, they’ve opened thirteen locations throughout Washington and Oregon with their most recent branch opening in Port Orchard, Washington. “It is thirteen times the fun and thirteen times the challenge of having one branch.” Though, “it makes sense,” Nick Merriman continues, “because our customers travel from border to border.”
Concrete supplies quickly became their company’s focus. “We’ve become pretty well-known for our expertise in our field.” Though the demand for building supplies rises and falls with the economy, their choice of specialty has been a smart one. On average, the amount of concrete used on infrastructure in the northwest has grown steadily since the 1960s. The customers of Masons Supply come from three main categories: municipalities, residential, and commercial contractors. Credit management is an integral part of their sales process, which is why Masons Supply joined NACM during the recession of the late 1970s. “It’s huge,” Pat Merriman says, when speaking of the roll NACM has come to play. It is a necessary sign of the times. Contracts and due diligence have replaced a binding handshake. “The |complexity of business has changed since we started,” says Nick Merriman. One thing that hasn’t changed at Masons Supply is how long their employees stay with the company. The average tenure is about twenty years, with some employees pushing forty. “We take care of our people,” Pat Merriman says. By hiring former contractors and promoting from within they ensure customers are talking to staff with deep product and business knowledge. Another element that hasn’t changed is the fact that Masons Supply is still a family business. Nick, Tom, Pat and Jill Merriman’s father still came to work every day and was involved with the business until he passed away a few months ago. Pat, Nick and Tom fill many rolls in the business and are planning to rotate the position of President each year. Up until W. Nick Merriman’s passing there were three generations of Merrimans working together. Pat’s daughter, Katie, and Nick’s son, Nick, are following in their fathers’ footsteps at Masons Supply.
NACM Oregon
Business Credit Journal January/February 2013
Message from the Chairman
Message from the President
The holiday leftovers are still in
2012 was a challenging year
the refrigerator, and I am sure your first thought for the New Year is probably more directed at family than business. As your Chairman, I have a responsibility to remind you that 2013 is here and it is time to start planning for the new year. NACM Oregon will be offering a variety of educational opportunities this year to help improve your credit knowledge if you are just beginning a career in credit or if you have been in the profession for years and feel you have a blind spot in your overall knowledge base. Remember, our website is always available to give you the resources you need to help you through your day and also serves as a gateway to all the various credit-reporting agencies that are available to our membership. Even though it is only January, most of us have to advise management of our vacation schedule and business-related travel for the upcoming year. This year, NACM National is holding their annual Credit Congress and Exposition at the Rio Hotel in Las Vegas, Nevada, on May 19 through the 22. Early Bird registration is from December 15, 2012, to March 1, 2013. Make reservations as early as possible; conference rates are based on availability. Identify yourself as part of the NACM Credit Congress (SRNACM3) to secure the conference rate. This year, I am going to try to attend this conference, and I recommend that you try to add it to your schedule too. I wish every member a happy new year and trust NACM Oregon will be a valued resource in the upcoming year. John Hardy Emerson Hardwood Co. jhardy@emersonhardwood.com
for the credit profession and NACM Oregon. We are very excited to welcome 2013, and we have a lot going on at NACM Oregon. We are finalizing the 2013 education and events calendar, and soon we will send this to you. I do want to remind you of the February 7 membership meeting with Chris Kuehl. As you may know, Chris is the NACM National economist, and he reviews the Credit Managers Index each month online and in the press. If you’ve seen Chris, you know he’s a very entertaining and informative speaker, and he enjoys every minute of his presentation. He’s also great with questions from the audience. There’s more information and a registration form on page 10 of this issue. I hope to greet you there. We look forward to the CFDD education event at Edgefield on March 8 and 9. The topics and speakers look great, and, again, more information is included on page 11 of this issue. Also mark your calendar for Thursday, April 25, for the NACM Oregon Annual Meeting. We will have a morning seminar with a national speaker and a luncheon – with just a little bit of business – and an entertaining speaker. Watch for your invitation! Do you use NACM Oregon to help with collection accounts? As you know, NACM Oregon is a member benefit, non-profit organization, controlled by the members through the Board of Directors. The Association’s purpose is to help members reduce delinquency and avoid bad debts. One way we do this is with Collection Services. In 2013, we are making this easier by moving away from ladder pricing and offering a flat rate on collection claims. Your Account Executive will have information to share with you about this change. And remember, as an NACM Oregon member, you receive free final demand letters. Best
wishes for an enjoyable and prosperous 2013! Rod Wheeland, CCE, CAE Direct: 971.230.1158 rwheeland@nacmoregon.org Page 3
7931 NE Halsey, Suite 200
Portland, Oregon 97213
Tel 503.257.0802
Fax 503.257.0247
www.nacmoregon.org
NACM Oregon
Business Credit Journal January/February 2013
Collection Trends Commercial Collection Agency Association of the Commercial Law League of America Collectability of Delinquent Commercial Debts At Time Intervals After the Due Date
Length
of
Delinquency
in
Months Since Due Date
*For some industries the due date may be several months after the delivery date.
Cash flow is the engine that drives businesses large and small. Delinquent accounts are the brakes that bring companies to a screeching halt. The economic exigencies of recent years has pushed many companies to extend the time they will permit an accounts receivable to age prior to instituting formal collection efforts. Based on a survey of members of the Commercial Collection Agency Association of the Commercial Law League of America (CCAA). This “loosening of payment requirements may be severely impacting companies cash flow and bottom line. According to the survey results, the probability of full collection on a delinquent account drops dramatically with the length of
delinquency. For example, even after only three months, the probability of collecting a delinquent account drops to 69.6%. After six months, collectability drops to 52.1%. And after one year, the probability of ever collecting a delinquent account drops to 22.8%. The results of this survey clearly demonstrate the critical importance of taking positive action when an accounts receivable ages past its due date. Mr. Emil Hartleb, Executive Director of the Commercial Collection Agency Association noted, “Today’s competitive economy requires that companies maintain a healthy cash flow with the ability to adapt to constantly changing market conditions. This is true ...continue on page 5
Page 4
7931 NE Halsey, Suite 200
Portland, Oregon 97213
Tel 503.257.0802
Fax 503.257.0247
www.nacmoregon.org
NACM Oregon
Business Credit Journal January/February 2013
Collectability, continued from page 4 whether you are in the printing industry or a company in the silicon valley. Delinquent accounts, if they are permitted to age, can wreak havoc on a company’s liquidity, as well as tie up management and staff time that could be put to far better use. Companies must take a hard line on past-due receivables, and turn to professional help when their internal efforts have not proved successful.� The CCAA survey polled the members of the Commercial Collection Agency Association, who in aggregate handle about eighty percent of claims placed with professional commercial collection agencies in the United States. CCAA member agencies handle over $13.0 billion in commercial claims annually. The Commercial Collection Agency Association was established as a separate section of the Commercial Law League of America in 1972. The Association is dedicated to elevating the standards of the commercial collection industry through the establishment of operational standards, a code of ethics, member and public education, and legislative initiatives. For more information about the Association, please contact Mr. Emil Hartleb, Executive Director, at 973.239.0721.
Ten Reasons Not to Purchase Credit Insurance Last month, an essay was published describing some of the reasons that com-
panies do purchase business to business credit insurance. Here are ten reasons not to do so: 1.
Certain accounts will have specific coverage limits assigned by the insurance carrier and most likely the credit limits will be far less than the amount you requested.
2.
Most (all?) policies include annual and per-loss deductibles, meaning that credit insurance is not first dollar loss coverage. This means that every company purchasing credit insurance must self-insure a portion of the risk.
3.
Insurance policies usually include exclusions on coverage, meaning customers for which no credit insurance coverage is offered.
dispute. As you know, customers in financial trouble often claim the balance owed is disputed. 8. The more concentrated your company is with small number of customers or the more concentrated your business is in serving a single industry, the more difficult it will be to find the right credit insurance policy at a reasonable cost.
9. 4. Typically, losses under a certain dollar amount (example: <$25,000) are not covered at all. 5. The insurer may have the right to 10. end coverage on your customers during the policy year. 6. The insurer will likely require detailed periodic reports about the status of customers covered by the policy. Failure to provide this information could invalidate your coverage. 7. Credit insurance policies will usually not pay the creditor company if the debtor claims the balance due is in
Credit insurance involves risk sharing, not risk transfer. Not surprisingly, most insurance companies decline coverage on companies they consider high risk. The problem is that the customers you want coverage for are often precisely the same customers the carrier does not want to insure.
Finally, the more account exclusions, the more coverage limitations in the policy, the more restrictions, and the more terms and conditions in the policy the more difficult it will be for any potential buyer to determine the value of a credit insurance policy to their company. Š 2010 Michael C. Dennis. All Rights Reserved
Page 5
7931 NE Halsey, Suite 200
Portland, Oregon 97213
Tel 503.257.0802
Fax 503.257.0247
www.nacmoregon.org
NACM Oregon
Business Credit Journal January/February 2013
NACM-Oregon Foundation Scholarships
NACM National 2013 Scholarship Program
The NACM-Oregon Foundation grants scholarships to credit professionals for continuing education, professional designations, and conference expenses.
The Foundation manages two scholarship funds: the NACM-Oregon Scholarship Fund and the Phylliss Clark Memorial Fund. The Foundation offers scholarship to the following events: • All NACM Oregon educational courses • Portland Community College courses within the Credit Administration and Advanced Credit Administration Programs in preparation for professional designation • Self-study courses in preparation for professional designation • Registration and exams fees for the National NACM Professional Designation Program • NACM/CFDD Pacific Northwest Credit Conference • National Credit Congress and Exposition • NACM National schools such as Credit Management Leadership Institute, Mid-Career School, and the Graduate School of Credit and Financial Management If taking a course or pursuing your certification seems like an expensive proposition, think again. These scholarship funds are a benefit to you as a member, so please take advantage by applying for next year.
Without your very generous support, we would not have the funds available to award as many scholarships as we do! Thanks to each and every one of you for supporting the NACM Scholarship Foundation and the Foundations’s silent auction. If you are in need of financial support we encourage you to apply for these scholarships. Applications will be accepted between December 1, 2012, and January 18, 2013. Details are posted at http://www.nacm. org/scholarship-foundation/ scholarship-details.html.
To apply— To apply for scholarship funds, or for more information, contact Lourdes (Lou) Rice, NOF Scholarship Committee Board Director, Pacific Metal Company at 503.454.1051 or lrice@pacificmetal.com. Submit applications to: Lourdes (Lou) A. Rice, NOF Scholarship Committee Board Director Pacific Metal Co. 10700 SW Manhasset Dr. Tualatin, Oregon 97062 p: 503.454.1051 f: 503.454.1065 e: lrice@pacificmetal.com
Page 6
7931 NE Halsey, Suite 200
Portland, Oregon 97213
Tel 503.257.0802
Fax 503.257.0247
www.nacmoregon.org
NACM Oregon
Business Credit Journal January/February 2013
Lifetime Certified Credit Executive
New Publication in the NACM Library
Recertification Congratulations are in order for Deborah Davis, ICCE, Viasystems Corp.; Kathy Hamilton, SAIF, Corp.; Marsha Johnson, TEC Equipment, Inc.; Steve Porter, Past President, U.S. Digital; and Jeff Wood, Stewart Building & Roofing Supply who were recertified for their CCE designation.
CBA’s And, congratulations to the following who successfully completed the CBA exam: Trista Cathcart, Superior Tire Service, and Beverly McCluskey, JELD-WEN Inc. NACM Oregon recognizes their accomplishments and applauds their success.
Jeffrey O’Banion, CCE, ICCE Congratulations to Jeffrey O’Banion, Northwest Natural Gas., Co., in becoming a Lifetime Certified Credit Executive. Those of us who hold the CCE designation recognize the significant effort in time and funding that is required to retain certification. Now, Jeff is able to successfully avoid submitting a form and paying fees every three years! Again, congratulations on earning your Lifetime CCE designation.
Trade Finance Handbook This hands-on resource guide equips decision makers with valuable tools, insightful tips, and proven techniques for successfully navigating cross-border finance. Written by export and finance authorities, Trade Finance Handbook delivers a practical understanding of how international transactions can be structured effectively. The book emphasizes how to identify, assess, and mitigate international risks, as well as quote prices and negotiate with clients and banks. It provides a solid understanding of standard payment options and how to use them, outlining 20 critical do’s and don’ts of using letters of credit. It also includes thorough coverage of the value of drafts and acceptances, the function of insurance, key financing options available to exporters, and the role of government financing programs. Delivering compete coverage of the most common international finance tools, this book is an excellent resource for executives, marketing officers, credit managers, accountants, finance officers and others making export decisions.
Page 7
7931 NE Halsey, Suite 200
Portland, Oregon 97213
Tel 503.257.0802
Fax 503.257.0247
www.nacmoregon.org
NACM Oregon
Business Credit Journal January/February 2013
International Corner, by Alice Knight, RGCP In November, I was privileged to join 160 attendees from 29 States and six countries for ICTF’s Annual Trade Symposium in Florida. Three noted economists set the world stage. The opening speaker was Daniel Altman with “Outrageous Fortunes: The Twelve Surprising Trends That Will Reshape the Global Economy.” Daniel focused on long-term trends that will change the way international business is viewed and conducted and included such diverse items as: • China will get richer and then poorer again • The European Union will disintegrate as an economic entity • The backlash against Capitalism won’t last but it will not be replaced by political stability • The collapse of the WTO will open up new gains from trade • A new set of lifestyle hubs will replace today’s business hubs • As the global economy integrates the middle man will win
only a 30% probability for a significant transfer of Sovereign rights to the EU. Ludovic predicted little economic growth in the USA for 2013 which will be positively or negatively impacted by solutions to the fiscal cliff, that the emerging world, which represents 38% of World GDP, will grow slower than anticipated and that global insolvencies will increase 4% for 2012 and 3% for 2013. Ludovic also commented on the 3-tier European DSO which has a March 2013 deadline for convergence at 60 days. As expected the largest variation (120-150 days) is in the South and the lowest (15-45 days) is in the North. Pharmaceuticals were highlighted as an “A” for market growth potential. Dr. Hans Belcsak, President of S.J. Rundt Associates, Inc., was the third economist and addressed “A World of Challenges.” Megatrends to watch included:
As an interesting contrast Ludovic Subran, Chief Economist and Director of the Economic Research Department of Euler-Hermes, journeyed from Paris, France, to bring a short-term perspective on world affairs. While forecasting little or no growth in Europe until at least 2014, he gave only a 10% chance for a breakup of the Eurozone. There was a consensus among all three economists that it is extremely difficult to have a common currency but independent fiscal policies but different opinions as to how this situation would be handled. Ludovic predicted a 60% probability for closer fiscal and economic coordination but
• The Arab Spring—revolution does not mean a change compatible with Western interests. • The Money Machines—Central Banks keep printing money • Al Qaeda—revived with new names, forms, and countries • Protectionism—DOHA is dead and there will be more unilateral agreements The best possible business environment has low taxes, limited regulations, a reliable legal system, a flexible labor market, cheap power, and certainty that there will be no sudden arbitrary changes. The USA currently has laws with thousands of pages, an incomprehensible tax code, the highest business taxes, over regulation, and no
certainty. All three economists predicted little or no growth for the USA in 2013 unless some major changes are made. A quick summary around the world included: • Argentina—serious payment delays and problems • Bolivia—some payment delays • Mexico, Chile, Peru, Columbia—no payment delays • Venezuela—devaluation, controls and delays • China—slowing • Indonesia—doing well • Turkey—problems with neighbors • Nigeria—Dysfunctional state The tenor of the symposium stressed the challenges for the near future and the increased need for current ongoing credit risk evaluation. Next month, I’ll share what some major corporations are doing to meet these challenges.
d Alice Knight is Vice President of Finance & Administration for Paper Products Marketing, Inc. Ms. Knight has more than 45 years' of experience in International Finance and is an active member of ICTF and NACM. She has served as Co-chair, Panel Member, and Presenter at Annual Global Conferences,as President of FCIB Forest Products Group.
Page 8
7931 NE Halsey, Suite 200
Portland, Oregon 97213
Tel 503.257.0802
Fax 503.257.0247
www.nacmoregon.org
NACM Oregon
Business Credit Journal January/February 2013
It Can Happen to Anyone: Be Prepared
NTCR,
by Brenda Terreault, JD, CBA
trade credit and risk
A phony collection
operation calling itself the National Fraud and Investigation Agency is currently operating in the midwest. The “company” will call consumers demanding payment on defaulted payday loans and threatening to arrest or sue those who don’t pay immediately. Often, the caller provides partial or full social security numbers, past bank account numbers or driver’s license numbers, along with addresses and employer information for consumers to make the threats seem legitimate. One Ohio consumer states National Fraud and Investigation Agency falsely accused her of receiving online loans six years ago. They threatened her with felony charges if she did not pay nearly $600 within 30 minutes and another $600 within 30 days. She was afraid she would be thrown in jail, separated from her three small children and forced to pay a $7,000 bond. But she had the presence of mind to ask where the company was located. The business refused to provide
management, accounting for items like days beyond terms and account aging, which speak directly to a company’s ability to meet its debts.
her with a valid business address and she contacted her local Better Business Bureau. When the BBB called the operation, it was given an address in Cincinnati that belongs to the Hamilton (Ohio) County Courthouse. We offer the following advice to consumers who receive suspicious telephone calls about an outstanding debt. • Ask the debt collector to provide official documentation that substantiates the debt. • Do not provide or confirm any social security number, bank account information, credit card data or other personal information over the phone until you have confirmed the legitimacy of the call. • File a complaint with the Federal Trade Commission online if the caller is abusive, uses threats, or otherwise violates federal telemarketing laws. Because this company obtained partial information on consumers from somewhere, we also offer the following advice to
7931 NE Halsey, Suite 200
Portland, Oregon 97213
continued from page 1
creditors: • Make sure any documents that may contain personal identifying information on a consumer or principals on a commercial account are shredded or you have a contract with a document destruction company who will shred documents for you. • If you are unsure whether a document or file contains personal identifying information, err on the side of caution and shred it. • Do not provide information on a consumer or principal of business until you have confirmed the legitimacy of the call. • Follow your company’s document/information security and Red Flags policies.
Tel 503.257.0802
Fax 503.257.0247
Predictability: Credit management is, by its very nature, a forward-looking profession. These professionals look at a company and make a determination as to whether or not a future event, such as payment or default, will or will not occur. The NTCR relies on business data submitted by these individuals, and the scoring model it uses is designed to predict late payments and severe delinquency looking forward six months. Service: Each and every NTCR includes information on the NACM office distributing the report, meaning the user is fully aware of who and where to call should they have a question. These offices provide the NTCR because they’re proud of it, and the report comes with exceptional customer service driven by knowledgeable professionals who are eager to help. Every NACM Oregon full member receives 25 reports as part of the membership package. You can access a report by logging into https:// nacmoregon.cicnetwork.com/ member_side/login.asp or call you account executive for more information. Page 9
www.nacmoregon.org
NACM Oregon
Business Credit Journal January/February 2013
Join Us February 7, 2013
Now What? Does 2013 Look Like Recovery or Retreat
The months right after an election year can leave you scratching your head with unanswered questions. The issues that defined 2012 are still with us—everything from the debt and deficit to the next “fiscal abyss.” There are some glimmers of hope in housing and in energy and there continues to be expansion in manufacturing. Will that be enough to drag the economy out of its slow-growth pattern? What pitfalls await? Join us for breakfast as Dr. Christopher Kuehl helps you sift through all of the political debris left over from MONTHS of a tornado of heavy campaigning to determine what really happened and what it all means. Dr. Christopher Kuehl (PhD) is a managing director of Armada Corporate Intelligence and one of the cofounders of the company in 1999. He has been Armada’s economic analyst and has worked with a wide variety of private clients and professional associations in the last ten years. He is the chief economist for the National Association for Credit Management and is on the Board of Advisors for their global division – Finance, Credit, and International Business. He prepares NACM’s monthly Credit Managers Index. He is the economic analyst for the Fabricators and Manufacturers Association and writes their biweekly publication, Fabrinomics, which details the impact of economic trends on the manufacturer. Chris is the chief editor for the Business Intelligence Briefs, distributed all over the world by business organizations and he is one of the primary writers (with Keith Prather) for the Executive Intelligence Briefs. He also makes close to a hundred presentations each year to business and industry associations in the U.S. and overseas. He is on the Board of the Business Information Industry Association in Hong Kong and serves as a resource for the media and for many trade publications.
Membership Meeting—Recovery or Retreat February 7, 2013, 7:30 - 9 a.m. The Monarch Hotel, 12566 SE 93rd Ave., Clackamas $35—member; $75—nonmember Name: Company: Billing Address: City, State, Zip: Phone:
Fax:
Email:
Payment Options Please bill me later. (NACM Oregon members only)
Check Enclosed.
Please charge my credit card. (MC, Visa, Discover only)
Name on Card: Card Number: Expiration Date:
Signature: Please return registration to: Elizabeth Heintz, eheintz@nacmoregon.org or fax to 971.230.1121.
Page 10
7931 NE Halsey, Suite 200
Portland, Oregon 97213
Tel 503.257.0802
Fax 503.257.0247
www.nacmoregon.org
NACM Oregon
Business Credit Journal January/February 2013
Professional Development Retreat Collections “For All Seasons”
2013 Credit Congress & Exposition
March 8 & 9 8:30 a.m. - 4:30 p.m. McMenamin’s Edgefield, 2126 SW Halsey St. Troutdale, Oregon A comprehensive course in collecting commercial accounts receivable, presented in a two-day series, co-sponsored with CFDD Salem-Albany and CFDD Portland Chapters. This course is designed to provide up-to-date techniques, management, and professional requirements for individuals involved in commercial collections. It is designed to take you from basic to advanced levels. Watch your mail for more details! March 8
March 9
• Basic Collections • Intermediate Collections
• Advanced Collections • International Collections • Navigating Office Politics • Dress for Success • Meeting Planning/Presentations
Rates
Early Bird
Regular
Single Day
NACM Members
$200
$250
$125
CFDD Members
$200
$250
$125
Non-NACM Members
$295
$147.50
Non-CFDD Members
$295
$147.50
By 1/25/13
After 1/25/13
Join us at the Rio Hotel, Las Vegas, May 19-22, 2013, for the year’s largest gathering of business credit professionals in the country.
Get registered today!
Friday or Saturday
Page 11
7931 NE Halsey, Suite 200
Portland, Oregon 97213
Tel 503.257.0802
Fax 503.257.0247
www.nacmoregon.org
NACM Oregon
Business Credit Journal January/February 2013
Business Credit Learning Center Webinar Schedule
2013 Credit, Cash & Collections: The Lifeblood of the Business January 11 9-10 a.m. (PT) The Real Measure of Cash Flow January 15 9-10 a.m. (PT) To Lien or Not to Lien: That is NOT the Question January 16 9-10 a.m. (PT) Getting It Right: Key Elements of a Great Credit Application January 17 9-10 a.m. (PT) International Credit Webinar Series January 25, February 1, February 8, February 15, February 22 9-10 a.m. (PT) Understanding International Credit January 25 9-10 a.m. (PT)
Coming Soon!
Cross Cultural Communication February 1 9-10 a.m. (PT)
2013 Education Class Schedule
Payment Mechanisms: A Focus on Letters of Credit February 8 9-10 a.m. (PT) Getting Paid: Effective Telephone Collections February 14 9-10 a.m. (PT) Understanding International Collections February 15 9-10 a.m. (PT) Financial Statements Overview February 19 9-10 a.m. (PT) Summary Case Study of International Credit Series February 22 9-10 a.m. (PT)
Getting Paid: Using the Credit Application for Collections January 28 9-10 a.m. (PT) Webinar fee: $79 each—member; $109 each—nonmember For a complete list of webinars and descriptions, please visit www.businesscreditlearningcenter.com. If you have any questions on any of the webinars, call Elizabeth Heintz at 971.230.1120, or eheintz@nacmoregon.org.
© New Yorker Cartoon. William Hamilton from cartoonbank.com. All Rights
Schedules are subject to change.
Page 12
7931 NE Halsey, Suite 200
Portland, Oregon 97213
Tel 503.257.0802
Fax 503.257.0247
www.nacmoregon.org
NACM Oregon
Business Credit Journal January/February 2013
Network Announcements - Visa® and MasterCard®
V
antiv is committed to keeping its valued merchant partners informed of important network announcements and industry news. In November 2012, a federal court provided preliminary approval of a settlement agreement among Visa, MasterCard, and U.S. financial institution defendants to resolve the Class Plaintiffs’ claims in the multi-district interchange litigation (MDL 1720), in which the plaintiffs allege that Visa, MasterCard, and certain of their larger member financial institutions unlawfully fixed interchange fees in violation of antitrust laws. The court’s preliminary approval order triggered Visa and MasterCard’s obligation to implement several revisions to their respective Operating Regulations in regard to transactions at merchants in the U.S. and U.S. territories (“U.S. merchants”). Under the settlement, effective, January 27, 2013, U.S. merchants will have the option of adding a surcharge to Visa and MasterCard credit card transactions. All U.S. merchant surcharging of credit card
transactions will be subject to the following requirements: · Visa and MasterCard will permit surcharging of credit card transactions only. · The settlement does NOT change current restrictions on the surcharging of signature debit transactions. · Merchants will be able to surcharge credit card transactions at the brand level (i.e., MasterCard and Visa transactions) or at the product level (i.e., World Card or Signature Card transactions). Merchants cannot surcharge at the brand AND product level. Merchants also may NOT surcharge at the card issuer level. · Surcharging practices are subject to a competitive “level playing field” limitation that depends on whether credit cards from other payment network brands impose surcharge restrictions on credit cards and the merchants’ costs of accepting those credit cards. · The surcharge amount will be capped based on the “cost of acceptance” of the applicable card.
· Merchants that elect to surcharge must provide advance written notice to Visa or MasterCard and the merchant acquirer 30 days prior to surcharging. · Merchants will be required to disclose their surcharge policy at the point of store entry and the point of sale prior to the purchase transaction being completed. · Merchants will be required to disclose the surcharge amount on the receipt. · Several states laws currently prohibit or restrict surcharging. Please consult your legal counsel for review of state laws and how they may impact your ability to surcharge. The terms outlined in this communication are subject to the final approval of a federal court. For complete details on the requirements for credit card transaction surcharging under Visa’s and MasterCard’s respective Operating Regulations, please consult the resources below and/or each card brand’s website.
Resources Please access the following websites for additional information: http://usa.visa.com/merchants/operations/surcharging. html?ep=v_sym_merchantsurcharging http://www.mastercard.us/ merchants/support/surchargerules.html As your processing partner, Vantiv will closely monitor developments and, as we learn more about the claims process, we will consider how we can best assist our merchants. The statements contained herein are based upon the information available to Vantiv as of the date and time of this bulletin and are subject to change. This communication is a summary and is not legal advice. As such, we recommend you seek the advice of legal/regulatory counsel with respect to the above and your rights under the proposed settlement agreement contained therein.
Page 13
7931 NE Halsey, Suite 200
Portland, Oregon 97213
Tel 503.257.0802
Fax 503.257.0247
www.nacmoregon.org
Pics of the 2012 Open House Those who attended the 2012 Open House had a wonderful evening. Good food, cider, wine, and holiday music was provided. Guests mingled throughout the evening enjoying the holiday atmosphere.
NACM Oregon
Business Credit Journal January/February 2013
CFPB, continued from page 1 purposes. So long as the other criteria for the Larger Participant Rule are met, the CFPB could extend the rule to cover the first-party’s activities. FACTA Red Flags Amendment The CFPB final Rule also provides a catch-all regulation that subjects to examination any entity that the CFPB designates as posing a risk to consumers. This is similar to the catch-all regulation for the FACTA Red Flags Rule. As mentioned previously, there is no interpretive guidance on these regulations. There are many reasons why a trade account may contain consumer information, such as accounts for sole proprietorships and partnerships, or any account in which a personal guarantee was obtained. Under this catch-all, the CFPB potentially could extend its reach from consumer accounts used primarily for family, household, or personal use, into commercial accounts containing consumer information which the CFPB may deemed as posing risk for consumers. Validation of Debt The quality of creditors’ collection documentation is a theme repeated throughout the CFPB regulations. The CFPB believes that creditors and their collection agencies as pursuing debt that the consumers do not owe. In an October 2012, settlement with the CFPB, American Express agreed to pay $85 million to 250,000 customers for alleged violations of marketing, billing, and collection practices and another
$27.5 million in fines. According to the CFPB, many billing and collection issues were debts that American Express could not validate. Currently, the regulations provide documentation requirements on banks and financiers; legal experts believe the CFPB will extend these regulations to trade creditors and collection agencies. Agency Theory and Vicarious Liability Also, the Rule creates a vicarious liability for covered entities and vendors who provide services connected to consumer accounts. Those entities covered by the Rule, both banks and nonbanks, must manage relationships with their third-party collection agencies as service vendors and can be held accountable if the agency breaks the law. Simply handing accounts to an outside vendor will not create a shield; the creditor subject to this rule could be held responsible for its collection agency’s violation of the law. Equal Credit Opportunity Act Negotiation of settlements and payment plans can also snare covered entities. The CFPB published the Debt Collection Exam Manual for use under the Rule. The Manual contains an entire module (module 6) on the Equal Credit Opportunity Act (ECOA) which can be found at this link: http://files. consumerfinance.gov/f/201210_cfpb_ debt-collection-examination-procedures.pdf. Covered creditors’ internal operations are likely to be subject to the same standards as that of ECOA.
Examiners are specifically instructed to look for areas of discretion with respect to fair lending and discrimination. Credit managers use their discretion in negotiating and agreeing to settlement amounts, payment plans, and promissory notes. Creditors can be left vulnerable if the credit manager does not make extensive notes for the reasoning behind the settlement. One debtor could bring an ECOA claim if another debtor’s settlement amount is lower, or his payment plan is over a longer period of time. While not immediately affected by this Rule, all business people might consider starting 2013 with a review of internal policies and relationships. Perhaps such a review will help us all have a happy New Year.
Brenda Terreault, JD, CBA, is the Collection Services Manager for NACM Oregon and an Oregon attorney. She has more than 18 years’ experience as an attorney, investigator, and operations manager in governmental, corporate, and law firm settings. Brenda is a regular instructor for NACM Oregon classes/seminars and webinars and a contributing writer in the monthly NACM Oregon Business Credit Journal newsletter. She earned her CBA designation in March 2010. You can contact her at 971.230.1196 or bterreault@nacmoregon.org.
Page 15
7931 NE Halsey, Suite 200
Portland, Oregon 97213
Tel 503.257.0802
Fax 503.257.0247
www.nacmoregon.org
NACM Oregon
Business Credit Journal January/February 2013
Contacts NACM Oregon
Board of Directors Chairman John Hardy Emerson Hardwood Co. jhardy@emersonhardwood.com
Directors Steve Amiel Tektronix, Inc. steven.amiel@tektronix.com
Customer Service/ Credit Reporting 971.230.1220 services@nacmoregon.org
Industry Groups Richard Browning, CGA 971.230.1188 rbrowning@nacmoregon.org
Vice Chair Marsha Johnson, CCE TEC Equipment, Inc. mjohnson@tectrucks.com
Linda Bishop, CCE, CICP Tektronix, Inc. linda.j.bishop@tek.com
Data Contribution Shannon Abnal, CGA 971.230.1166 sabnal@nacmoregon.org
Kristen McBride, CGA 971.230.1176 kmcbride@nacmoregon.org
Secretary/Treasurer Pat Swope, CCE, CICP Pacific Seafood Co., Inc. pswope@pacseafood.com Counselor Raeann Binau, CICP, RGCP Airgas - Norpac, Inc. raeann.binau@airgas.com
Will Campbell Standard Supply Co. willc@standardsupplyco.com Tony Ceniga Industrial Finishes & Systems t.ceniga@industrialfinishes.com Paula Cooley, CBA American Steel pcooley@american-steel.com Sue Hein Rapid Bind, Inc. sue@rapidbind.com Lori Jones, CCE ljdangermouse@gmail.com President Rod Wheeland, CCE, CAE NACM Oregon rwheeland@nacmoregon.org
Member Services Kathy Linscott, CGA 971.230.1164 klinscott@nacmoregon Member Services Account Executives Clara Nemeth, CGA 971.230.1144 cnemeth@nacmoregon.org Denise Redding, CGA 971.230.1178 dredding@nacmoregon.org National Account Executive Caroline Anderson, CGA 971.230.1168 canderson@nacmoregon.org
Collection Services Brenda Terreault, JD, CBA 971.230.1196 bterreault@nacmoregon.org Billing Marmie Carpenter 971.230.1146 mcarpenter@nacmoregon.org Meeting Room Rental Elizabeth Heintz 971.230.1120 eheintz@nacmoregon.org Newsletter Editor Barbara Salazar 971.230.1182 bsalazar@nacmoregon.org
Education Elizabeth Heintz 971.230.1120 eheintz@nacmoregon.org
Page 16
7931 NE Halsey, Suite 200
Portland, Oregon 97213
Tel 503.257.0802
Fax 503.257.0247
www.nacmoregon.org