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ConsumerFi Podcast: Recovery Industry Update with the American Recovery Association’s Les McCook and Dave Kennedy

July 1, 2022

Episode 9


Joel is joined by two very influential voices in the recovery industry and the founders of the American Recovery Association, Executive Director, Les McCook, and President, Dave Kennedy. They discuss how the ARA was created, the importance of ‘being at the table’, compliance challenges and where the recovery industry is headed.

Read the association’s most current white paper here.

ConsumerFi is presented by Nortridge Software: Loan Software That Accelerates Change

And special thanks to The National Automotive Finance Association: The only trade association exclusively serving the nonprime auto finance industry.


[00:00:20] Hello everybody. I am excited today to have on the podcast with me, two of the leaders in the industry, uh, two, two gentlemen that I look up. To, uh, as mentors as well, we’ve gotten to know each other well over the past couple of years, uh, they are the, the brains behind the American recovery association. The ARA we have, uh, please welcome, uh, Les macaque, he’s the executive director of the ARA and, uh, Dave Kennedy.

[00:00:47] Who’s, who’s the president of the NRA. And he also owns a recovery company out in Western PA called first credit resources. Um, guys, welcome to the podcast. So great to have you.

[00:00:58] Dave Kennedy: [00:00:58] Oh, it’s going to be a blast. [00:01:00] Thank you for inviting us.

[00:01:01] Les McCook: [00:01:01] Love it, man. Glad to be here with you. So we made that

[00:01:04] Joel Kennedy: [00:01:04] shirt. Yeah. Thank you.

[00:01:06] Anybody watching on YouTube, you’ll be able to see the, my fancy shirt and the fact that less, uh, wins the hair contest, uh, as always. And Dave wins the stash contest.

[00:01:19] Dave Kennedy: [00:01:19] Well, I would do, I would try to match you to church, but I didn’t do that today and think about it

[00:01:24] Les McCook: [00:01:24] last year. Really? Like you’re very bland today.

[00:01:28] Very calm today. I got my green eyes shirt on

[00:01:35] Joel Kennedy: [00:01:35] the MRL dial is alive and well. Um, guys, we met, we met some years back. I think it was at one of these conferences here in San Diego. We were able to bring bread. Um, ha ha it got to know each other a little bit better. And I got a clue. You guys had some big audacious plans at the time. I mean, this has got yeah.

[00:01:53] B shoot four or five years ago and you guys, you know, help paint the picture. There [00:02:00] was, there was like, you know, A bunch of different trade associations. I think there was a things you guys wanted to bite off. Can you guys kind of, you know, I think it’s a fantastic story. Cause you guys, from a management leadership standpoint set a goal.

[00:02:13] And you went after it and you’ve been very successful. And, and I’d like to just kind of highlight, you know, that planning and the execution.

[00:02:22] Dave Kennedy: [00:02:22] Well, we left that meeting. Number one point was get you back at another one, cause I certainly appreciate you buying dinner that night. Our mate, Dave came aboard.

[00:02:32] The idea was to do something because consolidation or industry was starting to happen. And from all in all sectors. We were seeing an issue. The ARA was, you know, national trade association bill really brought together his marketing pieces. Back in the fifties, the gentleman has set these things up and originally were very smart, intelligent guys and set them up for great purposes.

[00:02:53] Our goal was to transition to what a true association should be, which is to provide services, training, uh, [00:03:00] programs, to benefit financially insurance programs, things that meant and help you become better business people. So that’s been our cast since then some of the consolidations happened as you know, since we started and, you know, we’ve got a couple of big names coming up, but we’re really excited about keep going.

[00:03:17] We haven’t stopped. We haven’t gotten where we want to go, but, uh, we’re going to get there.

[00:03:22] Les McCook: [00:03:22] Yeah. I was very fortunate to come in at a time when there was a lot of turmoil in the industry and people were ready, then prime for change. And so Les really helped me. Uh, you know, Les has been in the industry since, you know, right after they, they, uh, learned how to distill whiskey and, but, uh, he’s been in a long time.

[00:03:44] So together our brains, you know, He’s always wanted to do a lot of things. And he, I came in, we had a real plan, you know, the unification of the industry and education, and just like let’s, let’s set everything that we’ve been able to put together. Insurance programs, [00:04:00] you know, for the first time ever life insurance for the agents and everything.

[00:04:03] I mean, we wanted to become, we looked at the. The top 10 associations in the nation and what do they offer? And then we say, okay, well, this is what we gotta do. You know, we have to offer these types of things in order to sustain, uh, being what a true association is for its members. And that’s what we’ve headed towards.

[00:04:26] And we’ve been able to accomplish a lot of it.

[00:04:29] Joel Kennedy: [00:04:29] Uh, I’ve been a beneficiary of that open-mindedness and point of view. I was working with Jack Tracy with the national automotive finance association, uh, to try to develop standards for how we as lenders manage, uh, the recovery, uh, uh, professionals, right.

[00:04:48] Manage that relationship. And that’s when, when I really started working with, with you and, uh, and less, and I got to tell you, it was, it was inspirational to me because as I took the helm as [00:05:00] president of the NAF, I felt a lot more, um, confident in making some more bold goals for the organization. You know, for me, it was about making sure that we were conservative mostly known by the CFPB.

[00:05:15] We, we want them to call us and ask us questions when things change. And I will tell you, they did that when COVID started, you know, they wanted to kind of have an idea of what do we think the real impacts are going to be to you and to the consumer? Um, And, and, and there’s, you know, other things that, that we’ve done on the trade side, that, that I’ve been very proud of, but you guys were kind of in inspiration for that.

[00:05:34] So, you know, let me go ahead and pump you up on that, but, um, let’s talk a little bit about some of the big issues, cause, cause there’s a lot going on and I’ve been involved as well. Um, and I’ll be happy to share some of that, but I want to start off with you guys, you know, two, two big areas this year, obviously legislative.

[00:05:53] Um, and then regulatory. So let’s start off with the legislative stuff. Dave, you’ve been very active in, uh, [00:06:00] lobbying or, or, or educating the, the, you know, electric on, on, you know, who we are, uh, changing, uh, what could be, uh, the perception, which is wrong, right about, about what the recovery agent is and who we are.

[00:06:14] Um, tell us a little bit about what you’ve been doing this year on that front.

[00:06:19] Les McCook: [00:06:19] One of the things that we realized is that we, the recovery industry, the collateral recovery industry has never had a voice, an organized voice on either the state or the national level. So, you know, working again to be the voice of the industry for the nation.

[00:06:37] We helped develop the repo Alliance, which then was able to hire a lobbying firm by the name of band squad and associates. And we now have a very prominent voice on the Hill and we have, uh, put out white papers to the senators and the house. And we have had this today alone. I have three calls with staff [00:07:00] members from the leaders on the banking and finance committee, uh, to be sure that, you know, our voice is heard and we give them options.

[00:07:10] You know, there’s obviously the two different sides are hugely different. One side you see, and what they put out there, the word moratoriums all over the place for. All types of consumer credit, the other side, the more, the word moratoriums never used. And they’re look, they’re taking a much more, uh, conservative approach and still coming up with ideas for relief.

[00:07:33] So we’re working diligently to be sure that they understand the, you know, how unintended consequences happen. You think you’re coming out with ideas that are going to help. The consumers, but in actuality, some of the things you might be proposing could have devastating effects on the people you’re actually trying to help.

[00:07:53] So we’re moving forward. Um, the Senate came out with their update to phase four of the, uh, the heroes [00:08:00] act it’s about three days ago. And there’s some good news in there as far as, you know, more PPP money and. And help for small businesses and everything else like that. But unfortunately, you know, I’m on the Hill.

[00:08:12] One thing we’ve learned is that, uh, it’s going to change six times before it gets passed. And, but the key is this that I’ll never forget. The one Senator that said to me, and this is the one sense I’ve taken away from this. And that is if you’re not at the table, you’re on the menu. And that’s where we don’t want to be.

[00:08:32] We want to be at the table. We don’t want to be on the menu. And that’s what we’re trying to do for our industry is to be sure that to protect us from being on the menu of what’s going to get gobbled up and eaten by people who really from talking with them, I’m going to be honest with me. They virtually never even thought of this segment of the finance industry has been about housing and.

[00:08:54] You know, we’re like the ghost, you know, nobody knows anything about our industry. And so that [00:09:00] has been our big job. And so we’ve literally been putting. One pagers, you know, into the hands of their chief of staffs and things like that to take back to the senators and the table, to be sure they truly understand what our industry does and how we actually are a major pipeline for protection to consumers as well.

[00:09:18] Uh, as you know, the only one, the part they know about is the actual recovery part and television. Hasn’t done us any favors because that’s anything we’ve had out there. Yeah, so there we have it. There’s the legislative part. It’s, it’s moving, it’s changing. It’s constantly evolving. But the one thing I can tell you is that we are there very strongly, um, meeting and we have, by the time this is before election day, we will have met with every single.

[00:09:48] Members staff that is on the banking and finance committee, as well as appropriations. I mean, we’ve had, it’ll

[00:09:55] Joel Kennedy: [00:09:55] be like 35 calls. That’s amazing. We

[00:09:58] Les McCook: [00:09:58] will personally [00:10:00] talk to everyone.

[00:10:01] Joel Kennedy: [00:10:01] That’s amazing access. And for folks that don’t know the name of the pack is called repo Alliance. And I encourage anybody in the space who wants to see a healthy and functioning, uh, You know, well-functioning marketplace, especially for the consumers, right?

[00:10:18] You can’t, you can’t make, uh, you can’t cut off things like this and expect for a well-functioning system. So, um, kudos to you guys with your leadership there, that the focus of the repo alliances on the federal. Uh, the federal issues. However, I will, I do need to call out that there are state based organizations, particularly Texas in California that were involved in, in a lot of this setup that, um, and that’s where I’ve gotten involved.

[00:10:44] And I’ll, I’ll throw in my 2 cents. Sarah. I have a, I live in California and we had some legislative issues we had, uh, I like to call her the mini AOC, this lady, Monique limo out of, uh, I think the central coast central Valley, and she wanted to just go [00:11:00] all out and demonize us and talk about a one pager.

[00:11:04] We were effective using the, the local, uh, California based trade association, uh, that were, you know, coordinated with. To be able to get information in the hands of, of the folks. And it was down to the wire on that boat. And, uh, I think that actually the tides have turned as of recently, I spoke with Marcel who heads up that trade association here in California.

[00:11:23] I think that she’s back to business, which is great news. I mean, it’s like, David’s, like you said, if you don’t, if you don’t have representation, you gotta, you gotta pick up your glove and get in the game. Otherwise your, your, your lunch, right? That’s it. I love that analogy. Um, that that’s, that’s true. Less.

[00:11:41] Let’s talk a little bit about, um, about regular and the CFPB, a lot of things happening there. I think we’re forecasting a lot of things to potentially change. Um, w what have you guys been seeing there, or that you think is noteworthy?

[00:11:55] Dave Kennedy: [00:11:55] Well, I think the consent order that was. Issued the other day to do with Nissan motor [00:12:00] acceptance.

[00:12:00] It’s probably the big news of the day. We’re going to have to find some way to deal with this. Uh, we’ve been obviously personal property. One of the big white papers we put out this year had to do with the handling and security and storage of personal property issues. Lenders are kind of pushing us all into a box with an all in solution recovery fees.

[00:12:19] And don’t, don’t understand that. You have a recovery process and a solution. And then the next solution is handling a personal property. That’s a different issue moving the vehicles or transportation issue. So we’re going to have to do some more education on it. We’ve got to get some clarity. We’re talking, we’ve been talking earlier this morning already with the nationally recognized attorney that represents a lot of lenders around the country and is specialized in this nail.

[00:12:47] His deal is you don’t. Which shouldn’t be charging. It’s got something to do more to do with contracts. So, you know, having the contract, it’s not written into contracts to notify people that they’re going [00:13:00] to have these charges, that’s an issue. We have States and courts that I’ve already declared and ruled that the charges are acceptable.

[00:13:09] There are some stage with Bailey laws is to say, there isn’t an expectation that you should be charged. Should you come in and control with someone’s property? So we have a lot of conflicts and this is what the attorney talked to us this morning. So our game plan now is to try to get the first week of November set up as a natural presentation and bring him on and talk, talk about it as an industry, to every sector.

[00:13:31] The lenders, the boarders, the repossession agents, everyone involved to come forward, listen to the deal and lay out a game plan that works for everyone and makes it a solution. And that is a benefit to everyone. So that’s kind of where we are right now. That’s the hot button it’s on the stream. We’re getting phone calls every day.

[00:13:51] You got emailed boxes, full of people asking questions about it. So we’re going to get a professional to help us clarify it and get it done and get a, get a policy. [00:14:00] We’re back to what you said. Or we talked about standardization. Let’s figure out what a good standardized policy is that everyone that protects every side of the industry is fair to everyone and let’s get it out and get it published and get it followed.

[00:14:15] Joel Kennedy: [00:14:15] Yeah, I was, I was astonished, there was a conversation string that I was on, on LinkedIn about the topic. And, um, gentlemen, that, that opened up well, Steve Levine of ignite, I think everybody knows Steve ne he’s. He was saying, Hey, this is you is bringing light to the issue and saying, this is a big deal. And my question back to him was okay, well, you know, I learned, I didn’t know this.

[00:14:39] I learned that. Yeah. And there’s pictures on the post as well. You see these vehicles, which has tons and tons of stuff in them, and you have to inventory all this stuff, right? So the re the report, uh, agent that told him the car has to inventory. This stuff has to put it, you know, there’s other standards.

[00:14:58] They have to follow, maybe have it off the ground, a certain [00:15:00] height or whatever my question was. Okay. So who’s going to pay. Right. If you’re not making the consumer, like somebody did work to get this stuff, you know, taken care of. And the question is, okay, so who pays? And I think, you know, at the end of the day, there’s just so many different places where, where, where the recovery agent can get squeezed, right?

[00:15:21] So you send on your own guide to cut keys and do this and that. And, you know, I think that’s a big piece of it. Less is, you know, let’s just make sure that we all. Talk together and coordinate and make sure, you know, consumer is obviously the first stop we want to make sure the consumer is being fairly treated.

[00:15:36] And then from there let’s go let’s let’s, you know, let’s kind of decide how we want to kind of split the split the pie. No,

[00:15:43] Dave Kennedy: [00:15:43] no, for sure. It’s funny. You said it the way you look in your face. Like, I think some of the lenders we have two-thirds to do this for us. They just come by and evening in, uh, you know, like when we meet our children, need their teeth pulled and they leave it under the pillow or something.

[00:15:57] I think they think personal property is like our children’s teeth.

[00:15:59] Joel Kennedy: [00:15:59] Well, [00:16:00] hold on. If there’s any small children listening to this, please, you know, just disregard that last comment and Santa Claus and Easter bunny are fine. Don’t worry about it. No, they

[00:16:10] Dave Kennedy: [00:16:10] were fine. Listen, I, I didn’t say there wasn’t too far.

[00:16:12] I said, I think we believe there’s more.

[00:16:17] Joel Kennedy: [00:16:17] Yeah,

[00:16:18] Dave Kennedy: [00:16:18] it’s dangerous. We’ve got, we had an agent up in Ohio that said they opened the trunk of a car and it was being cleaned out and it just didn’t seem right called the Sheriff’s department to come out. It’s fentanyl. There was enough fentanyl to kill. Everybody went in 10 blocks in a trunk of a car and a repo.

[00:16:36] That’s the

[00:16:37] Joel Kennedy: [00:16:37] stuff that’s like, you know, you get like a drop of it. Uh, just one grain and yeah,

[00:16:42] Dave Kennedy: [00:16:42] gone. So this is, this is what we deal with in the world today. You think of all the issues going on and you think of all the people moving around. It’s a, it’s a horrible situation. You guys in California, or it’s even worse.

[00:16:55] You have to have a special storage building. For the hazardous [00:17:00] waste, paint cans, aerosol cans, all the things that should not be mixed together, they have to have a special container to protect it. Can you imagine a cost of an agency doing 600 repos a month? Having a store not only your personal property here, but having a store that hazardous waste material.

[00:17:21] Let’s talk about disposal fees. I don’t even know what tires paints, oils, and it’s a danger that are considered hazardous in California. Or almost every product I’m mad. If it made out of plastic, you have to dispose of it. You’re going to pay somebody in town. And this is the disparity of, or the misunderstanding that I think the lending community has, that will concern job.

[00:17:44] We have to, we have to do the education. That’s why we did the white paper and, and the, and the presentation. And I’m not sure you’d have to see it yet, but. Well, we actually have the video clips. We have the body cam showing these cars full of the property that, uh, as they’re being cleaned out. [00:18:00] And it’s a very great, clear, honest depiction of what we face every day in the industry that these guys are going, these guys and ladies are going,

[00:18:08] Joel Kennedy: [00:18:08] is it, is that white paper available?

[00:18:10] Is that something I can, I can cut up backlink to the, to the, yeah, it’s

[00:18:13] Dave Kennedy: [00:18:13] right on the it’s right on the front page of our website. Okay. Perfect.

[00:18:19] Joel Kennedy: [00:18:19] Go ahead and say that. Okay,

[00:18:25] outstanding. Um, what do you guys, what do you, I mean, I love this because this is a great way for us to kind of. Educate, um, folks in the lending side, you know, about, about some of the things that you guys are dealing with. Um, I love, like I said, I love the fact that you guys have grabbed the bull by the horns and just, just head down the path.

[00:18:48] And so there’s a lot of other beneficiaries of this. So, you know, I do want to get an, a plug, you know, repo Alliance is something that has to be funded. So if you get a chance, check out repo Make a contribution because [00:19:00] Jennifer LaTourette who who’s our representative from Vanscoy and associates is fantastic.

[00:19:04] I’ve had occasion to speak with her a couple of times. She’s actually the keynote speaker for the national automotive finance association conference coming up in November. Um, and we’re excited to have her there and that’s going to be one of these things where I don’t know if you guys know, but. When you’re dealing with coming off the tails of an election and especially election, like we’re having now, um, this is going to be all late-breaking stuff.

[00:19:25] So it’s going to come down to the wire. Um, so it’ll be latest and greatest information. So there’s my plug there, but, um, um, What do you guys, what do you, what, what would you guys like to see moving forward? Uh, in terms of everybody working together and helping to move things forward? This will be, this will be our final question.

[00:19:43] What do you, what would you guys like to see?

[00:19:45] Dave Kennedy: [00:19:45] The first thing I wanted to see is a Ford in winter circle in Phoenix. So how’s that for? I want to get my plug in there first, see a Ford and winter circle. I really don’t care. Look, I think what we have to do, I think getting, [00:20:00] getting the attorney on to talk about.

[00:20:02] The issues, getting highlighted the training, the white papers we’ve written for people to actually see what’s happening and understand what’s going on behind the scenes. I think that’s where we need to go next. Dave, what do you think on the, we need to go

[00:20:15] Les McCook: [00:20:15] well, it’s all in order to really, you know, put the final bite on it is, you know, we need to.

[00:20:22] Cooperation in this industry has got to change, you know, and, uh, we have to all get, get together and, uh, do away with the fragmentation. It’s something that’s hurt this industry for 50 years. And I know people are tired of hearing me talk about it, but, you know, You know, I’m an old Irishman and I just get, repeat the same old story because you know, it’s something that’s just so important.

[00:20:44] It has stopped the industry and has injured us so bad. And of course, state associations and are so important and to state or national or regional associations. I mean, so important is so that we have a grassroots touch on everything that’s going on. I think that’s, [00:21:00] that’s the direction I wanna push and let me, uh, One thing I want to plug is the actual people involved their repo Alliance.

[00:21:07] And that is, you know, the, uh, Texas, uh, group of down there, their association, uh, it’s the recovery professionals. Right. And then Cal are, and then Harding Brooks association. And of course the ARA. So, uh, we just want to thank them all they’ve done. And, and Stephanie, I apologize because I had a mental breakdown there and the name of the association.

[00:21:33] So forgive me, but last, what was the Texas one again? It’s recovery professionals. There, you have it tarp. So, and, uh, we just. Thank them all for that. And, uh, everybody donate because I’m telling you the threat is real it’s it’s like, COVID you hear it about COVID the threat is real in the legislative arena.

[00:21:53] Joel Kennedy: [00:21:53] Yeah. Well, and I commend you guys on making a really fantastic selection with Jennifer for folks that don’t know, [00:22:00] Jennifer, uh, has a long standing career on the Hill prior to becoming a regulator regulatory affairs specialist on both sides of the aisle. And I will say not only that, but she has respect of both sides of the aisle.

[00:22:16] You know, we have too many issues that we have to politicize. It’s nice to take this one and just hit it right between the eyes. It’s about the consumers. It’s about the industry. It’s about the members that we represent that really took a, a tough, tough hit. I mean, this whole COVID thing really took a toll on the industry.

[00:22:35] And, uh, you know, I, I, again, I commend you guys, man there before, before we got her landed. I think there were some times where we might have been looking at the picture and saying, man, there’s, this is this darkest, but it was darkest before the Dawn. Let me tell you, I’m very bullish on the industry and I’m very bullish on the work that you guys are doing.

[00:22:53] Dave Kennedy: [00:22:53] Well, we can’t thank you enough for bringing a barn and being, and thank you for being a part of it. I mean, you, like you [00:23:00] said, the last several years, we’ve worked together to try to figure this out. You brought the lending community through the table with your, with the NAF and just said, look, I, this time we have to sit together.

[00:23:11] Solutions have to be found that are good for all of us. That can’t be a one-sided. One solution fits all from our side or your side dictating, dictating it, and it’s done a wonderful deal. Then it continues to grow. And thank you

[00:23:22] Joel Kennedy: [00:23:22] for that. We’re getting there. This is, this is one of those things, you know, I remember early on in my career, there were people that would pick projects very strategically.

[00:23:29] Oh, this one’s, this one’s a winner. This one it’s too hard. We don’t do that math. We always just work on the hard stuff. I mean, honestly, this is, this is not an easy feat. So anyway, I pumped you guys up enough. You guys are probably your heads are going to get so big. You’re not gonna be able to get out of your hotel room.

[00:23:47] Les McCook: [00:23:47] Joel is really no, thanks for everything you’re doing, but you know, really what a lot of kudos to you because really was you and Jack, uh, that’s a sadness down. If I remember that big U table down there and we got our [00:24:00] six railroad tracks that we decided were important and we got committees together that started it all.

[00:24:05] So the NAF has been what a partner, I mean, Jesus, you know, without you and your, your collaboration and everything. It’s just been awesome. Thank

[00:24:14] Joel Kennedy: [00:24:14] you so much. Amen. Well, let’s keep it going guys. Folks. This has been, uh, Les, macaque the executive director of the ARA. Dave Kennedy, my brother from another mother.

[00:24:24] Who’s the president of the NRA. And he runs a fantastic recovery company out of Western PA called first credit resources. Thank you guys, both for being on the podcast, but

[00:24:34] Les McCook: [00:24:34] due to thanks, Joel. Thanks. The consumer

[00:24:38] Joel Kennedy: [00:24:38] fi podcast has been brought to you by Northbridge loan software. That accelerates change.

[00:24:44] We’d also like to thank the national automotive finance association, the only trade association, exclusively serving the non-prime auto financing industry. [00:25:00]

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