AMENDED SMALL BUSINESS IMPACT STATEMENT

MGL c. 30A provides that prior to the adoption of a proposed regulation, an agency shall file an amended small business impact statement, which considers, without limitation, whether any of the following methods of reducing the impact of the proposed regulation on small businesses would hinder achievement of the purpose of the proposed regulation:

  1. Establishing less stringent compliance or reporting requirements for small businesses;
  2. Establishing less stringent schedules or deadlines for compliance or reporting requirements for small businesses;
  3. Consolidating or simplifying compliance or reporting requirements for small businesses;
  4. Establishing performance standards for small businesses to replace design or operational standards required in the proposed regulation;
  5. An analysis of whether the proposed regulation is likely to deter or encourage the formation of new businesses in the Commonwealth; and
  6. Minimizing adverse impact on small businesses by using alternative regulatory methods.

As previously reported, the updated Debt Collection Regulations (the “Regulations”) incorporate a number of changes, many of which will modernize the outdated regulations, allow them to endure over time, and make them more consistent with other state and federal regulations of debt collectors.  Examples of this type of amendment can be found in the “Definitions” section of the Regulations, which includes rewritten terms such as “creditor” and “debt,” and in the “General Unfair or Deceptive Acts or Practices” section.  The updated Regulations now include parameters for text messaging and other electronic forms of communication in order to appropriately regulate constant initiation of contact which recent technological advances have made possible. 

 

Amended Small Business Impact Statement:

To comply with the Small Business Impact requirements of M.G.L. c. 30A, the Office of the Attorney General reviewed similar regulations at the state and federal levels, and examined the regulatory burden of complying with the Regulations, especially considering such burden on small businesses.  While the Attorney General’s Office acknowledges that many regulations fall disproportionately on small businesses, the nature of the regulatory changes proposed here actually lessen compliance requirements that small businesses engaged in debt collection may face because of the updated proposed consistency with other similar regulations.  In this regard, the anticipated burden on small businesses, as well as the nature of the Regulations, did not justify putting in place separate compliance or reporting requirements specifically for small businesses. 

The Regulations largely set out permitted and prohibited practices in connection with collection of debts as opposed to compliance or reporting requirements, therefore it was unnecessary to establish less stringent compliance or reporting requirements or schedules or deadlines for compliance or reporting requirements for small businesses, or to consolidate such requirements for small businesses.  In fact, the Regulations do not contemplate any particular reporting requirements, and the only anticipated administrative costs that businesses, both large and small, will have to bear will be those associated with ensuring compliance with the Regulations (training of employees, time spent reviewing and instituting appropriate collection practices, etc.). 

In fashioning these Regulations, the Attorney General’s Office considered the appropriateness of performance standards versus design standards and concluded that performance standards are the most reasonable and cost-efficient method of achieving meaningful protections for Massachusetts consumers while also ensuring that creditors who refrain from using abusive debt collection practices are not competitively disadvantaged.  For this reason, there were neither design nor operational standards in place.  As was the case before the public hearing, the Attorney General’s Office feels that the proposed Regulations are unlikely to either deter or encourage the formation of new businesses in the Commonwealth because these Regulations have been in existence for approximately forty years and creditors operating in the Commonwealth have always had to comply with them.  Finally, because the impact on small businesses in particular is predicted to be neither burdensome nor onerous as compared with larger businesses, alternative regulatory methods for small businesses were found unnecessary.