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How The Government Shutdown May be Bad News For the ARM Industry

As the government shutdown enters its third week with no end in sight, fully understanding the impact that the shutdown is having is difficult because unless you have been directly affected, it might seem like nothing has changed. But that is decidedly not the case. For many industries, including the credit and collection industry, the federal government is a watchdog, a protector, a provider, and a benefactor.

I was — and still am — a huge fan of “The West Wing” and it’s where I derive much of my wisdom, such as a quote from President Bartlet who said, “The most costly disruptions always happen when something we take completely for granted stops working for a minute.”

A consumer advocacy has compiled numbers from a group of federal agencies that protect consumers, and it’s startling to see just how few people are working right now.

For example, 83% of the 1,442 employees at the Federal Communications Commission have been furloughed, to go along with the 77% of the 1,124 employees at the Federal Trade Commission who are not working.

At the FCC, the departments that have been shut down include the groups that answer consumer complaint phone calls and enforce consumer protection statutes. At the FTC, the Do Not Call registry is closed, as are other resources for filing consumer complaints.

The only individuals who remain working at either agency — without pay, it should be noted — are those who are responsible for protecting life and property.

While there might be some who think the shutdown’s unintended consequence of forcing the FTC and FCC to suspend investigations and enforcement activities may be a good thing for the ARM industry, I would offer a different perspective.

The FCC and the FTC are the key enforcement agencies whose job it is to go after the worst offenders. Look at the enforcement actions that the FTC has taken in recent years and you’ll see a laundry list of the worst kind of tactics that collectors are accused of deploying. Generally, the people that the FTC go after are the ones that give the industry a bad name and a black eye.

If you read the “Getting to Know” profile that is published every week, those ARM industry professionals are asked a question — What is the one thing you wish you could change about this industry — and the answer that appears over and over is to erase the negative stigma attached to the collection industry. If nobody is going after the really bad guys, the industry’s reputation is only going to suffer. Rather than trying to come up with something clever on my own, allow me to wrap up by stealing a line from Colonel Nathan Jessep in “A Few Good Men”:

“You don’t want the truth because deep down in places you don’t talk about at parties, you want me on that wall, you need me on that wall.”

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