The Office of the Attorney General in Nevada has just offered their unofficial interpretation of the Financial Institutions Division’s (FID) recently-published clarifying regulations for S.B. 248- licensees that follow the rules (the draft regulations) for medical collections should not be subject to FID discipline.
Last week, the FID released draft regulations that offer guidance to collection agencies seeking to harmonize S.B. 248 with FDCPA requirements. The new regulations offered many suggestions for S.B. 248 compliance that are not part of the legal S.B. 248 statute, e.g., a draft 60-day S.B. 248 letter form, confirmation that only the first debt collector need incur the cost or a certified or registered letter. See Draft Regulations here.
Beyond the FDCPA conflicts left unresolved by the new regulations, uncertainty remains as to what effect, if any, the proposed regulations would have on new medical collection activity during the 6 month to 2 year approval process before the regulations are finalized.
The issue: Should an agency follow the express text of S.B. 248, or should the agency follow the draft regulations?
In response to direct questions, the Attorney General’s Office reported on August 31 that the FID will not take any enforcement actions against a collection agency if collecting medical debt consistent with the draft regulations. The Attorney General’s Office also stated the FID’s expectation that any licensee not complying with the S.B. 248 implementing regulations will be subject to recommendations for remediation during an audit; again, all despite the regulations not yet being official.
The likely take-away? At least per the Attorney General’s Office, Nevada licensed agencies may start collecting new medical debt and follow the draft regulations.
Like S.B. 248, the FID’s new guidance is not litigation risk free. Earlier this week, a lawsuit was brought alleging that a Nevada medical collector violated the FDCPA by not complying with S.B. 248.
Nevada medical collectors beware – you might escape FID scrutiny by following the draft regulations now, but regulatory compliance does not mean a consumer cannot sue you for that same activity if you are violating the FDCPA.
PLEASE NOTE: As of this writing, the FID has not published their official position.
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