ACA International, the association of credit and collection professionals, released a new white paper this week.

The paper titled, “Business Practices and Capabilities within the Debt Collection Industry,” examines the potential impact of additional Consumer Financial Protection Bureau regulatory measures on member organizations and the debt collection industry.

“The Small Business Administration Office of Advocacy defines a small business as either ‘an independent business having fewer than 500 employees,’ or one that generates annual receipts that do not exceed the SBA size standard; for debt collection companies, the size standard is $15 million in average annual receipts,” ACA International director of research Josh Adams wrote in the white paper.

 “Most debt collection companies (78 percent) qualify as small businesses based on both criteria,” Adams continued.

Adams mentioned that the CFPB reported that modifying data management systems would cost between $1,000 and $2,800 for small collection agencies. In the white paper, ACA International estimates the cost of upgrading the data management systems or modifying the software systems for additional functionality to be $73,339 for a small collection agency.

The estimated cost of including an additional page of disclosures in conjunction with a validation notice in mailed communications for a small collection agency would be an average annual increase of $95,405 in additional mailings.

“When compared to the findings of the CFPB report on the operations of third-party debt collection firms, this analysis suggests that the CFPB substantially underestimates the financial impact of new rules on these businesses,” Adams wrote.

ACA International’s latest white paper is part of an ongoing research initiative to collect more original data about the credit and collection industry, and quantify how debt collectors help consumers and the overall economy.

This white paper can be downloaded here.