Recognizing the impact of the coronavirus (“COVID-19”) health crisis, the North America Collection Agency Regulatory Association (“NACARA”) recently released a message offering information and guidance to consumers, financial institutions, including debt buyers and collection agencies, and fellow regulators.

Consumers and Commercial Debtors

Noting that many consumers and commercial debtors may face difficulties in repaying accounts placed with debt collectors, NACARA suggested that individuals contact any collection agencies that are servicing an account as soon as possible. While collection agencies are able to provide a variety of payment assistance options, including deferral of payments, NACARA stressed that a collection agency can offer these options to a consumer or a commercial debtor only if the entity establishes an open line of communication with the collection agency.

Regulated Entities

In the same vein of encouraging consumers and commercial debtors to reach out to their collection agencies, NACARA encourages collection agencies to help those who get in contact because they are facing difficulties due to the health crisis. NACARA suggested that, “[a]t minimum, regulated entities should take reasonable steps in an attempt to offer assistance to all consumers and commercial debtors who have suffered a loss of income due to this emergency or have otherwise experienced impacts that could affect their ability to repay their debts.”

Specifically, NACARA states that businesses should immediately consider:

  1. forgoing the credit reporting of payment information during the health emergency, or modify the credit reporting of payment information to consumer reporting agencies in a manner that minimizes the impact of delinquent payment on credit histories;
  2. offering modifications, forbearances, or other options to allow consumers and commercial debtors to reduce and/or defer payments;
  3. ensuring customers are provided options to make timely inquiries, manage their accounts, and make payments, even if there is a reduction in the collection agency’s staff;
  4. reaching out to customers proactively to provide information on available assistance; and
  5. ensuring that all customer-facing staff are fully informed regarding any assistance available and are proactive in informing customers of such.


In addition to encouraging regulated entities to ease the impact of the health crisis on consumers and commercial debtors, NACARA likewise encouraged member regulators to recognize that regulated entities are facing the same crisis. Because many regulated entities are affected by state laws, regulations, and executive agency orders that limit the ability of employees of such entities to work from home during the health crisis, NACARA called for regulators to provide guidance to regulated entities with respect to the issue. Specifically, NACARA suggested that the following restrictions could be imposed when authorizing remote work arrangements:

  1. a prohibition on the storage of records created relating to collection agency activities at the remote work location;
  2. a requirement that the records created as part of collecting an account are being entered remotely into an electronic system housed at a licensed location; and
  3. a requirement that no payments on an account are received at the remote work location.

In addition to suggesting this guidance, NACARA urged regulators to be sensitive to the fact that collection agencies may be facing significant difficulties in supporting the staff necessary to serve customers during the health crisis. Pointing out reduced staff sizes and/or employees working from home, NACARA stressed that regulated entities may face difficulties in addressing agency requests and filing required reports in a timely manner and encouraged regulators to remain flexible and lenient, and not to take unnecessary punitive action if due dates are not met.

In sum, NACARA’s message encourages understanding, flexibility, and communication between parties at every level of the collection industry in light of the COVID-19 health crisis. By encouraging communication between consumers and commercial debtors and collection agencies, encouraging collection agencies to lessen the impact of the health crisis on consumers and commercial debtors, and imploring regulators to issue guidance allowing regulated entities to adapt to this uncertain time, NACARA has provided a suggested path forward for all involved in the collection industry during the COVID-19 health crisis.