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Editorial Viewpoint Quick Response, Thoughtful Support |
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Spotlight On Peregrin Services Corporation |
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Spotlight On HSBC Bank USA, N.A. |
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COVER STORY Expanding Menu of Network Services Adds Exciting Options for Our... |
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NEWS REPORT Bankruptcy Reform Legislation Spurs DMP File Changes... |
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NEWS REPORT HSBC Dramatically Expands Electronic Volume in Retail Lockbox |
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NEWS REPORT Advertorial Aims to Raise Biller Awareness about Electronic Payments |
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NEWS REPORT New Program Takes Educational Approach to Selling the MasterCard RPPS... |
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INDUSTRY INSIGHTS Q&A with Gwenn Bézard |
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NEWS REPORT 
Bankruptcy Reform Legislation Spurs DMP File Changes |
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| MasterCard RPPS Leadership Facilitates Quick Delivery of Optional Solution | ||||
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In July, the Executive Office for U.S. Trustees (EOUST) made public its
administrative rules implementing the requirements of the Bankruptcy Abuse
Prevention and Consumer Protection Act. That gave the credit counseling industry
just three months to prepare for a radically different environment. "On August 10, we convened a meeting of the MasterCard RPPS Credit Counseling User Group to discuss what network changes would be required to accommodate the new law in the short term," says Janet Smith, vice president, MasterCard RPPS Product Management and Account Support. "We invited creditors, processors, and credit counseling agencies of all sizes—a representative sample of our credit counseling industry stakeholders. "The meeting was very successful. We came to a consensus on a nearterm solution," she says. "When the law went into effect on October 17, MasterCard RPPS was ready to support our credit counseling customers' needs." Identifying need Under the new bankruptcy law, most consumers will be required to attend a session with an EOUST-certified counselor as a prerequisite to filing for bankruptcy. In the session, consumers will be informed about the advantages of credit counseling assistance and, as appropriate, encouraged to enter into a debt management plan as an alternative to bankruptcy. To understand how the provisions of the legislation would affect our customers, MasterCard RPPS conducted customer interviews and a survey prior to the user group meeting. "By understanding the real issues in advance of the meeting, we were able to focus the large user group on identifying an effective near-term solution that could be developed and deployed by October 17, 2005," says Smith. At the meeting, four essential requirements emerged from the discussion. MasterCard RPPS customers would need
Smith's team released the agreed-upon solutions for comment to the attendees. Their feedback and additional input from MasterCard RPPS were incorporated into the MasterCard RPPS Credit Counseling Product Update Guide that was then released to all credit counseling customers. (The guide may be accessed in the News Center on the Credit Counseling section of the MasterCard RPPS Web site.) The solution allows transmission of the additional information using refinements to existing fields within the electronic DMP files. "We were working under very tight time constraints, but the beauty of our solution is that it fulfills the basic needs of our customers with minimal impact on their operations," Smith says. "Agencies will be able to submit the prebankruptcy indicator and the less-than-full-balance proposals, along with the term and percentage of balance to be paid, and they will be able—via our online directory—to identify which creditors will accept this information. "Creditors will be able to receive the information, but they can also opt out of seeing the prebankruptcy indicator or receiving less-than-full-balance proposals." The solution is entirely optional. Neither agencies nor creditors are obligated to participate. Testing procedures and time frames were also communicated to customers. "Originators can conduct self-testing, but creditors need to schedule testing with us," Smith says. Looking ahead MasterCard RPPS will convene another meeting of the Credit Counseling User Group to evaluate performance of the near-term solution and focus on longterm answers. "Our customers have a lot of good ideas about how they'd like to see the DMP file formats change overall, and we also may see new rules from EOUST," says Smith. "So in 2006, we'll begin assessing the long-term needs of our customers to deliver an even more robust offering for the credit counseling industry. "We're proud of the focus that we and our customers brought to the immediate challenge, and of the solution we developed together. In a few short weeks, we've listened to what our customers told us, developed a viable solution, and deployed the changes. It's been a very successful effort all around." 
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