States across the country are taking bold and unprecedented steps to contain the spread of coronavirus, steps that are endangering the ongoing viability of the accounts receivable management industry.
It started yesterday morning, when the state of the Financial Institution Division of Nevada’s Department of Business and Industry released guidance that ordered all non-essential businesses to close for the next 30 days. Defining a collection agency as a non-essential business, the guidance then “recommend[ed]” that all “collection agencies holding a license or registation” in Nevada to close for 30 days. But the guidance raised a lot of questions, because some read that it applied to any agency that had a license to operate in Nevada, regardless of whether the agency was in Nevada or not. While there have been attempts to clarify exactly whether the guidance applies only to agencies in Nevada or whether they meant all agencies holding Nevada licenses, it was the first salvo felt by the industry from a state government attempting to contain the spread of coronavirus.
Around dinner time, the governor of Pennsylvania signed an executive order ordering the closing of all “non-life-essential” businesses by 8pm Thursday night. He also announced that the state would begin to take enforcement actions against business that did not close. In the order, Gov. Tom Wolf did say that the order did not apply to virtual or telework operations “so long as social distancing and other mitigation measures are followed in such operations.”
Then, just before bedtime last night (at least here on the East Coast), the governor of California announced a similar order, requiring all 40 million residents of The Golden State to stay home. Workers in 16 different industries, including financial services, are exempt from the order, but whether the collection industry counts as being part of the financial services industry is not immediately clear.
What is clear is that the ARM industry is facing a significant crisis. Companies are scrambling to put plans in place to have individuals work from home, if possible, while others have been forced to lay off employees because of the requirements being put into place by state and local governments and because many clients are asking agencies to stop making outbound calls as we all try to figure out just how much worse things will get.