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Editorial Viewpoint Quick Response, Thoughtful Support Spotlight On Peregrin Services Corporation Spotlight On HSBC Bank USA, N.A. COVER STORY Expanding Menu of Network Services Adds Exciting Options for Our... NEWS REPORT Bankruptcy Reform Legislation Spurs DMP File Changes... NEWS REPORT HSBC Dramatically Expands Electronic Volume in Retail Lockbox NEWS REPORT Advertorial Aims to Raise Biller Awareness about Electronic Payments NEWS REPORT New Program Takes Educational Approach to Selling the MasterCard RPPS... INDUSTRY INSIGHTS Q&A with Gwenn Bézard		EDITORIAL VIEWPOINT - By Cathleen M. Conforti Quick Response, Thoughtful Support With passage of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) earlier this year, creditors and consumer credit counseling agencies knew they were heading into new territory. We were hearing from you at conferences, in meetings, in phone calls, as you speculated about what the new landscape would look like and what tools might be needed to negotiate the terrain. We began to evaluate what you might need from us to operate effectively in the new land. Once the Executive Office for U.S. Trustees (EOUST) issued its administrative rules in mid-July, however, we all had a map to the new territory and could begin to explore the practical ramifications of the new legislation. Consumers who wished to file for bankruptcy would now be required to first attend a session with an EOUST-certified counselor to evaluate their economic status and to determine the type of bankruptcy for which they might be eligible (i.e., Chapter 7 or Chapter 13). The new legislation did not require MasterCard RPPS to take any action directly. However, with our customers facing the new procedures demanded by the law, we were committed to doing whatever we could to accommodate your needs and minimize the impact to your organizations. We also knew we had just three months to get a solution in place. We quickly took steps to learn what your primary concerns were, and we went to work to address them with thoughtful solutions. The Credit Counseling User Group we organized (see related article) went a long way to identifying your immediate needs. For example, creditors and credit counseling agencies had concerns about creating a new type of debt management plan (DMP) to assist those individuals who lacked the financial means to repay their entire debt. Traditionally, DMPs developed with the assistance of a credit counseling professional have required full balance repayment. Because of this, individuals with overwhelming debt were precluded from seeking relief through DMPs and more likely to file for bankruptcy. BAPCPA encourages creditors to consider offering settlements (partial balance repayments) to such individuals. This would require the creation of a less-thanfull-balance DMP, which creditors would, of course, have the option of accepting or not. Less-than-full-balance DMPs could allow credit counseling agencies to serve a wider range of individuals and provide creditors with another means for reducing bankruptcy losses. We knew we had to put in place a simple and flexible solution that would not require significant development on your part. We also knew that participation had to be optional and that we needed a mechanism to enable each agency and creditor to easily opt in or out. In the end, careful listening to your concerns and needs defined the MasterCard RPPS solution. We identified space in the electronic DMP files that could be populated with the additional information —a prebankruptcy client-type indicator and the terms of any less-than-full balance proposal—for those that wanted it. We devised a way for creditors to opt out of receiving the information. We also set up testing procedures and a timetable that allowed customers to get up and running fast. As a result, on October 17, when the law went into effect, we were ready to support all the data requirements for those organizations that choose to participate. Anticipating your concerns, listening to your input, acting quickly to produce a thoughtful solution—it's what you look for in a leader, and it's what MasterCard RPPS strives to deliver day in and day out. Printer Friendly Version Back to Top