Code of Conduct for the Operation of Commercial Adjustment Services As Amended September, 2008

Business Credit Reporting Bureaus
Industry Credit Groups
Approved NACM Collection Agencies
Approved Adjustment Bureaus

A-100 Purpose
The purpose of the adjustment process is to provide administrative and fiduciary services to distressed debtors and their creditors in commercial insolvencies, whether administered out of court or in bankruptcy.

A-101 NACM Affiliated Association Adjustment Service
The Adjustment Service (the Service) is a cooperative arrangement of Adjustment Bureaus owned and operated by NACM Affiliate Associations to provide nationwide Adjustment Administration Services to NACM members and others, and to assist those providing the service to become and remain qualified to do so.

A-102 Scope of the Service
Solving the problems involved in commercial reorganizations and liquidations requires proven capability and experience with the various types of case administrations, including out-of-court extensions, compromise settlements and liquidation procedures. Court related case administration in which NACM Affiliate Adjustment Bureaus may be involved include Chapter 11 reorganizations under the U.S. Bankruptcy code and other procedures such as state court actions and special administrative proceedings.

A-103 Code of Ethics
In providing services in bankruptcy or out-of-court adjustment cases, all approved NACM Adjustment Bureaus will adhere to the Code of Ethics set forth in A-500.

ORGANIZATION OF THE SERVICE

A-200 Asset Management Services Committee
The Asset Management Services Committee (AMSC) oversees all activities of NACM Affiliates approved to operate and offer NACM Affiliate adjustment and collection services. Through cooperation with each other, an NACM Affiliate Adjustment Service System is created.

A-201 System Supervision
The NACM Affiliate Adjustment Service System is under the supervision of AMSC. The goals of the Service are to promote reasonable conformity in practices and procedures in the administration of cases, and the rendering of such services by qualified NACM Adjustment Bureaus and personnel. The Committee jointly or severally shall:

A-202 Committee Composition
There will be up to six voting members of the AMSC. One of the six members will serve as the Chair of the Committee. Because approved collection services are offered by a majority of NACM Affiliates, a best effort will be made to ensure that each geographic region will be represented by a COO of an Affiliate approved for collection services. If the Affiliates of the regional representatives do not also offer approved adjustment services, then the a COO from an Affiliate approved for NACM adjustment services will also be elected to the Committee. Each member of the Committee is to be elected for a two-year term, staggered so that two Committee members are elected each year. Any elected member of the Committee may not be elected to more than two (2) consecutive terms. [Note: The Composition of the Committee stated herein differs from that outlined in the Affiliate Agreement; the Affiliate Agreement calls for a Committee of eight members. The smaller Committee size noted here is more reflective of the number of Affiliates.]

A-203 Committee Chair
The Chair of the Committee (Chair) shall be employed as Chief Operating Officer for two years of an Affiliate which has been “approved” as an NACM Affiliate commercial collection or adjustment services provider under these rules. The Chair shall be a member of the Committee as defined in A-202 and shall be elected by majority vote of the Committee for a one-year term and may be reelected to a maximum of two consecutive terms.

A-204 Advisory Panel
The Committee may avail itself of guidance from an Advisory Panel consisting of Managers of approved NACM Affiliate Adjustment Bureaus and Approved Affiliate Collection Departments, to be appointed by the Chair with the advice and consent of the members of the Committee and/or of the regions that may nominate them. Advisory Panel members shall serve without a vote.

A-205 Vacancies Within the Committee
Vacancies occurring during a term of office will be filled by election at the earliest opportunity within the respective regions from which the vacancies occur.

A-206 Committee Meetings
Meetings of the Committee may be held by any appropriate, acceptable means of communication. A majority of the Committee is needed to constitute a quorum for transacting the business of the Committee.

A-207 Affiliate Council Chair
The Chair of the Affiliate Council shall be an ex-officio member of the AMSC.

A-300 Requirements for Approval and Operations Standards
Affiliates should be able to provide worthwhile services to NACM members and fulfill the responsibilities of an NACM Affiliate offering approved NACM Adjustment Services. The following are standards to qualify and continue to be recognized as an NACM Affiliate approved to offer NACM Adjustment services.

An Affiliate’s approved Adjustment service/operation:

A-301 Approval as an NACM Affiliate Adustment Services Provider
An NACM Affiliate wishing to become approved to render the Service by filing a written request for approval with the AMSC Chair of the Committee: The request must include a copy of a resolution by the applicant’s Board of Directors requesting approval as an NACM Affiliate Adjustment Services provider. The request notification will be in writing and will set forth how an applicant for approval has met or proposes to meet the specific requirements of paragraph A-300 and the other requirements appearing in this Code.

A-302 Request Investigation and Approval
The AMSC shall make an investigation to determine whether an applicant meets the requirements of paragraph A-300. If the AMSC finds the application in order, it shall approve the application, and the Chair shall so notify the Affiliate Council and the NACM President, who may then inform the Board of Directors. All NACM Affiliates approved to provide adjustment services that were registered with the NACM National as “approved” as of June 1, 1994, will be deemed approved as of the adoption of this Code of Conduct, unless it has ceased its adjustment operation, outsourced or sold its adjustment operations, or its approval has been revoked.

A-303 Disapproval; Appeal Process
If the AMSC does not approve the application, the applicant shall be promptly advised by the Chair. Any decision of the AMSC may be appealed in writing to the Affiliate Council within 60 days of receipt of notice. The appeal will be considered by the Council at the next scheduled Council meeting. The decision of the Council shall be final and binding on all parties.

A-304 Affiliates Approved for Adjustment Services
Only approved Affiliates may provide NACM Adjustment Services. No Affiliated Association will hold itself out to be an NACM approved adjustment service provider, using the Affiliate’s name and\or logo, unless it has been approved by the AMSC Committee.

A-305 Revocation of Approval and Appeal Process
The Committee may, for due cause, suspend or revoke an Affiliate’s status as an approved NACM adjustment service provider. “Due cause” may include, without limitation, violation of any provision of this Code of Conduct. The procedures for appeal of a suspension or revocation of appeal shall be identical to the procedures for disapproval as set forth in A-301.

A-306 Complaints of Noncompliance
One of the grounds for revocation of the adjustment service approval of an Affiliate will be based on a complaint by another Affiliate alleging one or more violations of the provisions of this Code. All complaints of noncompliance of any section of these Codes of Conduct will be forwarded to the AMSC Committee for investigation and the Committee findings will be forwarded to the Affiliate Council for appropriate action. Within 60 days of written notice from the AMSC, the Affiliate may appeal to the Affiliate Council for a hearing.

A-307 Hearing of Complaints
The AMSC has authority to hear complaints of an Affiliate requesting approval or revocation of adjustment services of an Affiliate. At such hearing the Affiliate charged shall be provided notice of the complaint, and shall have the right to appear and be represented by counsel, at its own expense.

A-308 Effect of Revocation
In the event that an Affiliate’s approval is revoked, and during such time as an Affiliate’s approval is suspended, such Affiliate will not use the name, National Association of Credit Management, or the logo of NACM, on any marketing or sales literature, or any form or correspondence involving the operation of Adjustment Services.

A-309 Noncompliance to this Code
Noncompliance with any section of these Codes of Conduct may be reviewed by the AMSC and forwarded to the Affiliate Council for action. Issues and/or complaints of noncompliance with the Code, brought to the AMSC for investigation, will result in written notice of noncompliance when appropriate.

A-310 Cessation of Adjustment Services
Should an Affiliate cease its adjustment services activities for a period of 12 consecutive months, the Affiliate’s status as an approved provider will automatically expire. Outsourcing the operation to a non-NACM Affiliate entity will also result in automatic forfeiture of the Affiliate’s status as an approved provider. The Affiliate must reapply before operating as an NACM approved service provider.

A-311 Changes to this Code
Any substantive changes to this Code of Conduct shall require approval of the Affiliate Council and an affirmative vote by two-thirds of Affiliates approved for adjustment services. Non-substantive changes must be approved by the AMSC and Affiliate Council.

A-312 Assistance by Other Affiliates
The AMSC and the Affiliate Adjustment Service System recommends that where a case is larger or more complex than that Affiliate’s Adjustment operation’s finances (including bond or insurance coverage) and/or its personnel can reasonably accommodate, such Affiliate obtain the assistance of an another approved Adjustment Service Affiliate having greater financial resources and/or more experienced Adjustment personnel.

A-313 Education
The Committee shall establish a continuing educational program to:

ENFORCEMENT PROVISIONS

A-400 Out of Trust Condition Forbidden
No approved Affiliate Adjustment Service/Operation shall be “out of trust” regarding any estate entrusted to it. “Out of Trust” is defined as a condition in which the Affiliate Adjustment Service/Operation itself owes the fiduciary duty of payment to any party that the Bureau lacks the funds to cover. The AMSC is authorized to receive complaints concerning any “out of trust” condition and to revoke or suspend approval of any Affiliate Adjustment Service/Operation found to be out of trust. Upon such revocation or suspension the affected Affiliate shall no longer be authorized to use the NACM seal or the state it is “Affiliated with the National Association of Credit Management” on any stationary or printed matter referring to its Adjustment services.

A-401 Notice of Suspension or Revocation
Notice of suspension or revocation of approval by the AMSC must be given immediately to the NACM President, to the Chief Operating Officers of all other Affiliates which have “approved” Adjustment Service/Operations and to the officers and management of the Affiliate that controls the affected service/operation.

A-402 Appeals
Appeal from any decision or ruling by the AMSC shall be to the NACM Affiliate Council, whose ruling shall be final and binding on all parties.

A-403 Reinstatement
An Affiliate Adjustment Service/Operation whose “approved” rating has been suspended or revoked may be reinstated upon satisfactory evidence that its “out of trust” condition has been cured. However, an Affiliate Adjustment Service/Operation found on three separate occasions to be out of trust shall have its approved status revoked for a period of not less than five years, unless such action is waived by a three-fourths majority vote of the AMSC.

A-500 Code of Ethics

Code of Ethics
for Approved Adjustment Bureaus of
Associations Affiliated with the
National Association of Credit Management

An approved NACM Affiliate Adjustment Service/Operation will operate under the following Code of Ethics:

An NACM Affiliate Adjustment Service/Operation will advise every debtor not already represented by attorney of the right to legal counsel before commencing any out-of-court case.

Business Credit Reporting Bureaus

I-100 Preface
Business credit reporting services are vital to conducting global commerce successfully. Billions of dollars are risked each year by sales on credit rather than for cash. The credit executive must be able to gauge the difference between fact and fraud, hope and charity, and faith and foolishness to render a credit decision.

To make sound credit judgements, a credit executive must have facts concerning the paying habits of customers. Such information is provided by approved Business Credit Reporting Service Affiliates which are departments of associations affiliated with the National Association of Credit Management (NACM).

I-101 The NACM Affiliate Business Credit Reporting System
The NACM Affiliate Business Credit Reporting System (The System) is a cooperative arrangement of NACM Affiliates, which provides approved nationwide business credit reporting services to NACM members.

I-102 NACM Affiliate Business Credit Reporting System Policies
The success of the NACM Affiliate Business Credit Reporting System is dependant upon:

I-200 Credit Information Services Committee
The Credit Information Services Committee (CISC), an Affiliate Service Committee, of coordinates all credit reporting activities of the NACM Affiliates approved to offer the service, whose cooperation with each other results in the NACM Business Credit Reporting System. The System is under the supervision of the CISC.

I-201 System Supervision
The Committee jointly or severally shall:

I-202 Committee Composition
A best effort will be made to ensure that the composition of the CISC shall include one Affiliated Association Chief Operating Officer (COO) from each geographic region with an approved Business Reporting Service operation or which operates as an approved Industry Group provider. The Chief Operating Officer is the highest paid officer of any Affiliate. The CISC Chair shall be elected by the committee from among its members. Each member of the Committee is to be elected for a two-year term, staggered so that two Committee members are elected each year. Any elected member of the Committee may not be elected to more than two (2) consecutive terms. [Note: The Composition of the Committee stated here differs from that outlined in the Affiliate Agreement; the Affiliate Agreement calls for a Committee of eight members. The smaller Committee size noted here is more reflective of the number of Affiliates.]

I-203 Committee Chair
The Chair of the Committee (Chair) shall be employed as Chief Operating Officer for two years of an Affiliate which has been “approved” as an Industry Credit Group and Business Credit Reporting Affiliate under the rules. The Chair shall be a member of the Committee as defined in I-105 and shall be elected by majority vote of the Committee for a one-year term and may be reelected to a maximum of two consecutive terms. The Chair may only vote in the event of a tie.

I-204 Vacancies within the Credit Information Services Committee
Vacancies occurring during a term of office will be filled by election at the earliest opportunity within the respective regions from which the vacancies occur.

I-205 Committee Meetings
Meetings of the Committee shall be held as needed. Meetings may be held by any appropriate, acceptable means of communication. A majority of the Committee is needed to constitute a quorum for transacting the business of the Committee.

I-206 Affiliate Chair
The Chair of the Affiliate Council shall be an ex-officio member of the CISC without the right to vote.

I-300 Requirements for Approval and Operations Standards
Affiliates should be able to provide worthwhile services to NACM members and fulfill the responsibilities of an NACM Affiliate offering approved NACM Business Credit Reporting Services. The following are standards to qualify, and continue to be recognized, as an NACM Affiliate approved to offer NACM Business Credit Reporting services:

An Affiliate’s credit reporting service/operation:

I-301 Pre Approval Notification
Affiliates contemplating the organization of an NACM Affiliate business credit reporting service shall notify the Chair of the CISC before taking any steps or making any expenditures towards this goal. The request shall include a copy of a resolution by the applicant’s Board of Directors requesting approval as an NACM Affiliate credit reporting service provider with a specific area of responsibility. The request will be in writing and will set forth how an applicant for approval has met or proposes to meet the requirements of paragraph I-300.

I-302 Request Investigation and Approval
The CISC shall make an investigation to determine whether an applicant meets the requirements of paragraph I-300 and whether the area in which the applicant will operate is open. If the CISC finds the application in order and if the area of responsibility is open, it shall approve the application. The CISC Chair will so notify the Applicant Affiliate and the Affiliate Council and the NACM President, who may then inform the Board of Directors. All NACM Affiliates approved to provide credit reporting services that were registered with the NACM National as “approved” as of June 1, 1994, will be deemed approved as of the adoption of this Code of Conduct, unless it has ceased its credit reporting operation, it has outsourced or sold its credit reporting operation, or its approval has been revoked.

I-303 Disapproval; Appeal Process
If the CISC does not approve the application, the applicant shall be promptly advised by the CISC Chair. Any decision of the CISC may be appealed in writing to the Affiliate Council within 60 days of receipt of notice. The appeal will be considered by the Council at the next scheduled Council meeting. The decision of the Council shall be final and binding on all parties.

I-304 Affiliates Approved for Credit Reporting
Only approved Affiliates may provide NACM Business Credit Reporting Services. No Affiliated Association shall hold itself out to be an NACM approved business credit reporting service provider, using the Affiliate’s or NACM’s name and\or logo, unless it has been approved by the CISC Committee.

I-305 Revocation of Approval and Appeal Process
The Committee may, for due cause, suspend or revoke an Affiliate’s status as an approved NACM business credit service provider. “Due cause” may include, without limitation, violation of any provision of this Code of Conduct. The procedures for the appeal of a suspension or revocation of appeal shall be identical to the procedures for disapproval as set forth in I-303.

I-306 Complaints of Noncompliance
One of the grounds for revocation of the credit reporting approval of a Affiliate or an area of responsibility shall be based on a complaint by another Affiliate alleging one or more violations of the provisions of this Code. All complaints of noncompliance of any section of these Codes of Conduct shall be forwarded to the CISC for investigation. The CISC Committee findings will be communicated to the offending Affiliate and to the Affiliate Council. Within 60 days of written notice of the finding and decision of the CISC, the Affiliate may appeal to the Affiliate Council for a hearing.

I-307 Hearing of Complaints
The CISC has authority to hear complaints of an Affiliate requesting modification to or the revocation of an area of responsibility or approval or revocation of credit reporting services of an Affiliate. At such hearing the Affiliate charged shall have the right to appear and be represented by counsel after provided with notice of the complaint.

I-308 Effect of Revocation
In the event that an Affiliate’s approval is revoked, such Affiliate will not use the name, National Association of Credit Management, or the logo of NACM, on any marketing or sales literature, or any form or correspondence involving the operation of business credit reporting.

I-309 Noncompliance to this Code
Noncompliance with any section of these Codes of Conduct may be reviewed by the CISC and forwarded to the Affiliate Council for action. Issues and/or complaints of noncompliance with the Code, brought to the CISC for investigation, will result in written notice of noncompliance when appropriate.

I-310 Cessation of Business Credit Reporting Services
Should an Affiliate cease its business credit reporting activities for a period of 12 consecutive months, the Affiliate’s status as an approved provider will automatically expire. Outsourcing the operation to a non-NACM Affiliate entity will also result in automatic forfeiture of the Affiliate’s status as an approved provider. The Affiliate must reapply before operating as an NACM approved service provider.

I-311 Changes to this Code
Any substantive changes to these Codes of Conduct shall require approval of the Affiliate Council and an affirmative vote by two-thirds of Affiliates approved for group services. Non-substantive changes must be approved by the CISC and Affiliate Council.

I-400 Credit Reporting Automation
The CISC is committed to the goal of total automation of all approved NACM credit reporting Affiliates with an assigned area of responsibility (Areas).

I-401 Official Definitions
The following are the official definitions of the terms used in this Code of Conduct:

I-500 Areas of Responsibility
The United States shall be divided into Areas of Responsibility, one or more of which may be assigned to Affiliates by CISC. The purpose of Areas of Responsibility is to encourage an Affiliate to be primarily responsible for the development and maintenance of business credit information files for the area(s) assigned to it. In order to insure the efficient and accurate exchange of business credit information of the highest possible quality, an Affiliate, through its assumption of an area of responsibility, provides the vital link with its area’s business credit information to permit the System to function effectively for the betterment of NACM members.

I-501 Area of Responsibility Requirements and Obligations
Any Affiliate may apply for any open area of responsibility on the basis of the quality of the service it is prepared to offer.

I-502 Assignment of Area of Responsibility
In the event an Affiliate merges with another Affiliate or desires to transfer and assign to another approved Affiliate its assets, including its area of responsibility, then the following procedure shall be followed:

I-503 Revocation of Approval of Services and Area of Responsibility
The Committee may, for due cause which includes noncompliance, assign, reassign, modify or revoke any areas of responsibility.

I-600 Business Credit Reports-User/Contribution Responsibilities
In any business credit reporting service contract between Affiliates and users, certain rules and regulations should be set forth, governing the conditions under which the service is to be rendered to users. Such rules or regulations should be thoroughly explained to users requesting business credit reporting services. These Affiliate rules and regulations should include the following:

I-700 Credit Reporting Services and the Law
It is important that every Affiliate be alert and vigilant to make its NACM business credit reports completely correct, factual and in accordance with the requirements of law. Information included in business credit reports must concern past and completed transactions. They must represent facts. Personal opinions, future plans or policies are not approved for inclusion in NACM Business Credit Reports. The practices set forth below are recommended.

I-701 Legally Sensitive Areas, Terms and Comments
Certain types of information normally included on business credit reports pose some special problems which must be appreciated by Affiliates. These include the following:

Care must be taken to ensure that the “Comments” column only includes comments based upon actual fact and experience. Two comments commonly appearing on business credit reports raise some practical questions. These comments are:

Affiliates must also establish reasonable purging schedules, bearing in mind that although collection account information is generally regarding as derogatory, it is not public record, and should therefore remain in the credit reporting file only as long as other non-judicial items. Each collection record should be purged one year after final disposition of the claim.

I-702 Inclusion of Public Record Items
If public records are gathered and disclosed in bulletin form, it is recommended that they be included on credit reports, subject to purging schedules not to exceed the requirements or guidance of state and federal statutes.

I-703 Changes in Law; Notification to Affiliates
NACM seeks to review all new and proposed legislation and current court opinions relevant to business credit reporting. Necessary and timely bulletins will be issued from time to time to all Bureaus regarding important new developments.

I-800 Demands for Business Credit Report Disclosures
When Affiliates are requested by the subject of a business credit report to disclose sources of the information contained in that report, Affiliates should be aware of the facts, and should follow the practice, set forth below:

SECTION II:
NACM National Trade Credit Report Code (March 2012)

NTCR-1000
National Database

The purpose of the national database is to obtain, coordinate and organize credit reporting information from NACM Affiliated Associations and other entities for the purpose of creating the NACM National Trade Credit Report.

NTCR-1001
The NACM National Trade Credit Report

The NACM National Trade Credit Report (“NACM NTCR”) is generated from the national database that resides on “The C.M.S./(e)C.M.S. Web Software” and is licensed to Participating NACM Affiliates (“Participating Affiliates”) by NACM Tampa. Participating Affiliates contribute data and procure reports. The NACM NTCR carries a trademarked name and logo of the National Association of Credit Management, Inc.

NTCR-1002
NACM Affiliate Business Credit Reporting System Policies

The success of the NACM National Trade Credit Report product is dependent upon:

1. compliance with the Code of Conduct and adherence to the rules, policies and procedures for this report,
2. cooperation and data sharing among NACM credit reporting Affiliates, and,
3. continued efforts to build the number of trade lines in the national database, and,
4. satisfactory service provided to members.

NTCR-2000
National Trade Credit Report Committee

Although some rules requirements are set forth in the Agreement between NACM Tampa and Participating Affiliates, The National Trade Credit Report Committee (“NTCRC”) creates, sets, monitors and enforces general rules and procedures for the NACM National Trade Credit Report and coordinates its marketing activities.

NTCR-2001
System Supervision

The National Trade Credit Report Committee jointly shall:

1. set guidelines and policies for the NACM National Trade Credit Report, and,
2. set data contribution standards, and,
3. create national marketing campaigns, and,
4. make arrangements for raising awareness of the NACM National Trade Credit Report through visibility and representation at trade shows and exhibits, including the NACM Credit Congress.

NTCR-2002
Committee Composition

The National Trade Credit Report Committee will comprise up to six Chief Operating Officers from Participating Affiliates. Committee membership shall be reflective of the diversity of Affiliate size and region. One of the six members shall serve as Committee Chair. In addition to the up to six committee members and provided that the Affiliate Council Chair is from a Participating Affiliate, the Affiliate Council Chair shall serve on the Committee as an ex-officio member. In addition to the up to six members, at least one representative of NACM Tampa/CMS shall also serve as an ex-officio member of the Committee; NACM Tampa/CMS may also include other key CMS executives in committee meetings as needed.

NTCR-2003
NACM National Trade Credit Report Committee Chair

The NACM National Trade Credit Report Committee Chairperson shall be employed as Chief Operating Officer by an Affiliate licensed to sell the NACM National Trade Credit Report appointed by the Affiliate Council Chair. The National Trade Credit Report Committee Chair will serve a one-year term and may be reappointed to a maximum of two consecutive terms. The Committee Chair may only vote in the event of a tie.

NTCR-2004
Vacancies within the NACM National Trade Credit Report Committee

Vacancies occurring during a term of office will be filled by the National Trade Credit Report Committee with an Affiliate Chief Operating Officer from a Participating Affiliate at the earliest opportunity and respecting the need for diversity of representation.

NTCR-2005
National Trade Credit Report Committee Meetings

Meetings of the National Trade Credit Report Committee shall be held as needed. Meetings may be held by any appropriate, acceptable means of communication. A majority of the committee members is needed to constitute a quorum for transacting the business of the Committee.

NTCR-3000
National Trade Credit Report Participation Requirements

Any NACM Affiliate is eligible to participate in the national database for the purposes of procuring the NACM National Trade Credit Report provided:

1. The NACM Affiliate is in good standing with NACM, and,
2. The NACM Affiliate is an approved Credit Reporting Bureau, and,
3. The NACM Affiliate is a current licensee under the CMS Agreement, and,
4. The NACM Affiliate executes and is in good standing with the Participant Agreement.

NTCR-3001
Termination of Ability to Sell the NACM National Trade Credit Report

NACM Tampa may terminate the NACM National Trade Credit Report Participant Agreement, with or without cause, upon sixty (60) days notice to Participant. In the event that an Affiliate’s participation is terminated, such Affiliate will not use the name or logo of the NACM National Trade Credit Report on any marketing or sales literature or on any form or correspondence involving its NACM business credit reporting operation.

NTCR-3002
Noncompliance to the NACM National Trade Credit Report Section of this Code

Noncompliance with any section of the NACM National Trade Credit Report section of this Code of Conduct may be reviewed by the National Trade Credit Report Committee and forwarded to the Affiliate Council for action. Issues and/or complaints of noncompliance with the Code will result in written notice of noncompliance when appropriate. Noncompliance may result in termination of a Participating Affiliate’s right to market and sell the NACM National Trade Credit Report.

NTCR-4000
The sale/distribution of the NACM National Trade Credit Report within Areas of Responsibility

Participating Affiliates have the right to market and sell NACM National Trade Credit Reports to NACM members only within their assigned area of responsibility. Participating Affiliates may also market and sell the NACM National Trade Credit Report to members in good standing who belong to the Participating Affiliate’s regional or national industry credit groups and who may be located outside of the Participating Affiliate’s area of responsibility. The term “industry credit group” is defined in the Code of Conduct for the operation of NACM industry credit groups.

NTCR-4001
Sales outside of Assigned Areas of Responsibility

Participating Affiliates may sell the NACM National Trade Credit Report within open areas of responsibility not assigned to any NACM Affiliate.

NTCR-4002
National Trade Credit Report Contract Sales

NACM Tampa will negotiate NACM National Trade Credit Report national account sales, the proceeds from which will be shared equally with each Participating Affiliate who has a reported member representative related to that national account on its membership rolls and is selling credit reports to that member company.

NCTR-4003
Resellers

Only Participating Affiliates can sell the NACM National Trade Credit Report. The NACM National Trade Credit Report will not be available to any third party reseller. A reseller is defined as a third party purchaser that is not an end user.

NCTR-4004
Sales to NACM Members of Non-Participating Affiliates

A Participating Affiliate may not sell the NACM National Trade Credit Report to an NACM member of a non-participating NACM Affiliate that is approved for credit reporting or has an approved credit reporting department.

NTCR-5000
Participating Affiliate Responsibilities

All Participating Affiliates agree:

1. that non Participating Affiliates will not use the brand, NACM National Trade Credit Report.
2. to include industry credit group data in the national database.
3. that if it has a collection department that it will contribute collection experience to the national database.
4. that Alerts and flash reports will be contributed to the national database.
5. that the NACM Tampa-suggested scheduled for purging and merging will be followed by all Participating Affiliates.
6. to contribute available credit information to the national database in accordance with the contribution schedule set by the Affiliate Council. Failure to provide available credit information to the national database may result in termination of the ability to market and sell the NACM National Trade Credit Report.
7. that 10% of its regular members, which includes membership totals from outsource agreements, will contribute full file data by January 1, 2012 and that 15% of regular members, which includes membership totals from outsource agreements, will contribute full file data by January 1, 2013. The requirement then increases to 20% on January 1, 2014 and to 25% on January 1, 2015 with further increases to be determined. New Participating Affiliates will have one year to meet the 10% of regular members, which includes membership totals from outsource agreements, contribution requirement and must meet the 15% requirement at the end of two years, 20% at the end of three years, 25% at the end of four years and then meet any subsequent increases until the prevailing percentage is met.
8. not to use the national database information for sales or marketing purposes.
9. to cross-indemnify other Participating Affiliates.
10. to carry errors & omissions, professional liability insurance with a minimum limit of $1 million dollars.

NTCR-5001
Waivers to Percentage of Regular Member Contribution Requirement

Upon a majority vote, the NACM National Trade Credit Report Committee may grant a waiver to a Participating Affiliate that fails to meet the data contribution requirement. Waivers will be granted based on evidence presented by the Participating Affiliate which may include, but is not limited to, a demonstrated effort made by the Participating Affiliate to come into compliance by providing proof of participation by learning how to raise/boost contributions; of a demonstrated effort seek advice from others as to how to boost contributions; of a demonstrated effort to actively market data contribution to members as a valuable service with specific benefits to contributors or that the total number of trade lines contributed by the Participating Affiliate or the value of the trade lines being contributed into the national database and shared with all Participating Affiliates merits a waiver.

NTCR-5002
Appeal Process

If the NACM National Trade Credit Report Committee does not grant a waiver, the Participating Affiliate applicant shall be promptly advised by the National Trade Credit Report Committee Chair. Any decision of the Committee may be appealed in writing to the NACM Affiliate Council within 60 days of receipt of notice. The appeal will be considered by the Affiliate Council at the next scheduled Council meeting. The decision of the Council shall be final and binding on all parties.

NTCR-6000
NACM National Trade Credit Report Attributes

All Participating Affiliates agree that:

1. “Days Beyond Terms” (DBT) will be used on the report instead of “Average Days to Pay”.
2. Zero balance and no record trade lines will appear on the NACM National Trade Credit Report but will not be counted on the number of trade lines.
3. Industry Codes and Comment Codes will be the same for all Participating Affiliates.
4. No Terms will be disclosed on the NACM National Trade credit report.
5. NACM National Trade Credit Reports will not display member/source numbers by Affiliate. Participating Affiliates will use industry codes, high credit balance, when contacting other Participating Affiliates for more information.

NTCR-7000
NACM National Trade Credit Report User/Contribution Responsibilities

In any business credit reporting service contract or agreement between Affiliates and users, certain rules and regulations should be set forth, governing the conditions under which the service is to be rendered to users. Such rules or regulations should be thoroughly explained to users requesting business credit reporting services. The rules and regulations should include the following:

1. Users of business credit reporting services should be instructed to comply with ECOA and Regulation B.
2. Business credit reports are intended for the use of business credit executives as part of the decision process to extend business credit. Such business credit reports must never be shared by the user with the subject of the report, except by court order. Compliance with this requirement requires continuing education efforts by Affiliates through member communications, meetings, and all other means.
3. A contributor shall make a full and truthful report of its business credit experience about any customer on whom information is requested by any Affiliate, and shall substantiate the information if so requested.
4. Any user having reason to believe a business credit report is erroneous shall be requested to file a written complaint to the Affiliate providing the report to the user (“user’s Affiliate”). The user’s Affiliate shall transmit said complaint to the Affiliate that issued the report (“reporting Affiliate”). Such complaint should state the part or parts of the business credit report the member believes to be incorrect. The reporting Affiliate receiving such a complaint shall ask the contributor who contributed the questioned information to substantiate and/or correct such information. In the event such a contributor fails to verify their information, the reporting Affiliate shall delete the contributor’s information from the report.
5. The accuracy of business credit reports is not guaranteed by an Affiliate. The Affiliate gathers the information in good faith, contributes it to the national database, from which the business credit report is created. The NACM National Trade Credit Report is a confidential and privileged communication. The Affiliate is not liable for negligence in procuring, collecting, communicating or failing to communicate the information so gathered. The user, by accepting the business credit report, agrees that the Affiliate is not liable for errors therein and is not responsible for any loss or damage resulting from reliance on the report.

NTCR-7001
Credit Reporting Services and the Law

It is important that every Affiliate be alert and vigilant to make its NACM National Trade Credit Reports factually correct and in accordance with the requirements of law. Information included in NACM National Trade Credit Reports must detail factual, past and completed transactions. Personal opinions, future plans or policies are not approved for inclusion in the NACM National Trade Credit Report. The practices set forth below are recommended.

NTCR-7002
Legally Sensitive Areas, Terms and Comments

Certain types of information normally included on business credit reports pose some special problems which must be appreciated by Affiliates. These include the following:

1. Comments.
   The “Comments” column is a critical part of a business credit report. The purpose of the “Comments” column is to facilitate the inclusion of information that will explain or expand upon information in other parts of the NACM National Trade Credit Report. Frequently, the additional information enhances the quality of the NACM NTCR to the benefit of the business credit report subject.
   
   Care must be taken to ensure that the “Comments” column only includes comments based upon actual fact and experience and that all comment codes are used.
   
   Two comments commonly appearing on the NACM National Trade Credit Report raise some practical questions. These comments are:
   
   a) C.O.D. or C.I.A.
   The reporting of a subject as on a C.O.D. or C.I.A. basis must report a fact. There     must have been an actual transaction or sale or quotation under these terms. (The fact that a reporting member would sell to that subject on a C.O.D. or C.I.A. basis, when and if that subject placed an order does not constitute a true C.O.D. or C.I.A. case, but is, rather a report concerning a possible future term.)
   
   b) Placed for Collection.
   In the normal course of reporting business credit experience, a member will still report when an account is placed with an outside agency for collection. This is a fact, and it is proper to include this fact on the business credit report. However, it must be a completed fact; i.e., the account must actually have been placed for collection. A comment such as “plan to place for collection,” or “will place for collection next week,” is not proper as it deals with a future plan. Affiliates may also have a problem with the collection comment if the account has been placed with the Affiliate’s own collection department. In such cases, the Affiliate should report this fact, using the standard comment, “placed for collection” rather than “placed with the Affiliate for collection.” It is recommended that Affiliates develop reasonable procedures and controls to assure that claims received for collection are routinely included in the reports on subjects located and doing business within their assigned Area of Responsibility. Steps to “file establish” the collection record itself should commence immediately upon placement of the claim, and need only display the amount and the date the account was placed for collection. Once the collection record has been “file established,” it must be reported. Additional collection accounts should be updated with the following basic information:
   (1) The debtor disputes the claims.
   
   (2) The claim is closed. (If possible, one or more of the following closing codes should be displayed).
              a) Collected in Full
              b) Partially Paid
              c) Comprised in Full
              d) Returned Merchandise
              e) Creditor Request
              f) Uncollected Judgment
              g) Bankruptcy-Case #_________
              h) Unable to Locate
              i) Uncollected
   
   
2. Affiliates must bear in mind that although collection account information is generally regarding as derogatory, it is not public record, and should therefore remain in the credit reporting file only as long as other non-judicial items. Each collection record should be purged one year after final disposition of the claim.

NTCR-7003
Inclusion of Public Record Items

If public records are gathered, it is recommended that they be included on credit reports, subject to purging schedules not to exceed the requirements or guidance of state and federal statutes.

NTCR-7004
Changes in Law; Notification to Affiliates

NACM seeks to review all new and proposed legislation and current court opinions relevant to business credit reporting. Necessary and timely notices will be issued from time to time to all Affiliates regarding important new developments.

NTCR-8000
Demands for Business Credit Report Disclosures

When Affiliates are asked by the subject of an NACM National Trade Credit Report to disclose sources of the information contained in a report, Affiliates should be aware of the facts and should follow the practice, set forth below:

1. Affiliates have a responsibility to ensure that NACM National Trade Credit Reports are correct, factual and accurate. Affiliates have a responsibility to promptly correct any discovered errors.
2. The federal consumer credit reporting laws do not apply to business credit reports (see the Federal Reserve Board’s Regulation B). An Affiliate is not required by law to disclose the contents of a business credit report to the subject of that report, nor is it required by law to disclose or reveal the sources of information (see NACM’s “Business Credit and the Equal Credit Opportunity Act” brochure).
3. Business credit reports are not used in connection with extension of credit for personal, family, household, or employment purposes. In the unlikely event that a business credit report was used in connection with the extension of credit for one of these purposes, then that business report could be considered a consumer credit report and the Affiliate issuing such a business report could be required to comply with the federal or state laws relative to consumer credit reports. Consumers have rights under the Consumer Protection Act (which includes the Truth in Lending, Fair Credit Billing, Fair Credit Reporting, Equal Credit Opportunity, Consumer Leasing, and Debt Collection Practices Acts).
4. If the subject of a report demands disclosure of the source of information on a report, such calls should immediately be referred to a specifically designated individual with training or the Chief Operating Officer of the Affiliate.
5. As noted, disclosure of a business credit report to the subject of that business report is not legally required, but the confusion over this requirement in the consumer credit reporting laws, may encourage demands for copies of business credit reports. When such a demand is received from the subject of a business report, a firm but diplomatic approach is recommended (ask the subject for the law that requires such disclosure).
6. The reason for the demand for disclosure is usually a refusal of business credit by a member or some other event to the disadvantage of the subject. The subject is, therefore, likely to be irate and very demanding when calling. The caller may threaten legal action or other measures. It is the intent of every Affiliate to provide factual trade information and every effort should be made to realize this goal. Check with the report user to see if they have complied with the adverse action and compliance requirements of Regulation B and if the subject has requested a written reason for such action.
7. After determining that the business credit report requested by the subject is, in fact, a business credit report prepared by the Affiliate, the Affiliate should offer to review the business credit report with the subject. This review should not be attempted on the telephone because there is no assurance that in fact, the caller is the actual subject of the business credit report in question. Instead, the Affiliate should invite the subject to visit the Affiliate office.
8. If the subject visits the Affiliate office to review the business credit report in question, the Affiliate should set aside a private office or conference room for such interview rather than to make this review or discuss the business credit report with the subject in an open or public space.
9. In any interview with a business credit report subject, the object of the interview is the review of the business credit report in question. It is not required, nor proper, to show or supply the subject with the actual credit report. The various items of information can be reviewed and discussed without actually showing the subject the business credit report.
10. Should the subject object to information which the subject believes is contained in the business credit report, the Affiliate should always offer to investigate the contested information in order to fulfill its responsibility to make sure that business credit report is correct and accurate.
11. Should this investigation reveal an error, a correction should be made immediately. In the majority of cases, where honest mistakes occur, most subjects simply want the business report corrected.

Industry Credit Groups

G-100 Preface
Factual business credit information is essential to a successful and profitable commercial credit sale. Billions of dollars are risked each year by businesses on sales made for credit rather than for cash. In order for credit executives to make sound independent decisions regarding the extension of that credit, those executives must have factual credit and financial information available to them. Such information is provided, in part by participation in industry credit groups, sponsored by Affiliated associations, Affiliates of the National Association of Credit Management (NACM), which adhere to this Code of Conduct established by NACM.

G-101 Industry Credit Groups
Groups are organizations of representatives from businesses which operate in the same industry and/or provide the same, or similar, products or service to common customers. Groups range in size from small local groups servicing members from a specific metropolitan area or small geographic areas, to regional groups servicing areas comprising several states, to national groups whose members are located throughout the entire nation. Given the expanding global economy, there are some groups whose activities are international in scope. Groups represent almost every different industry and business category.

G-102 The Function of an Industry Credit Group
Groups serve the credit function in the following ways:

G-103 NACM Affiliate Industry Credit Group Service
The Industry Credit Group Service (the Group Service) is a cooperative arrangement of NACM Affiliates which sponsor groups to:

G-200 Credit Information Services Committee
The Credit Information Services Committee (CISC), a service committee of NACM, oversees and reviews the operation of all groups sponsored by the Affiliates.

G-201 Committee Composition
A best effort will be made to ensure that the composition of the CISC shall include one Affiliated Association Chief Operating Officer (COO) from each geographic region with an approved Business Reporting Service operation or which operates as an approved Industry Groups provider. The Chief Operating Officer is the highest paid officer of any Affiliate. The Chair shall be elected by the committee from among its members. Each member of the Committee is to be elected for a two-year term, staggered so that two Committee members are elected each year from each region. Any elected member of the Committee may not be elected to more than two (2) consecutive terms. [Note: The Composition of the Committee stated here differs from that outlined in the Affiliate Agreement; the Affiliate Agreement calls for a Committee of eight members. The smaller Committee size noted here is more reflective of the number of Affiliates.]

G-202 Committee Chair
The Chair of the Committee (Chair) shall be employed as Chief Operating Officer for two years of an Affiliate which has been “approved” as an Industry Credit Group and business credit reporting Affiliate under the rules. The Chair shall be a member of the Committee as defined in G-105 and shall be elected by majority vote of the Committee for a one-year term and may be reelected to a maximum of two consecutive terms. The Chair may only vote in the event of a tie.

G-203 Vacancies within the Credit Information Services Committee
Vacancies occurring during a term of office will be filled by election at the earliest opportunity within the respective regions from which the vacancies occur.

G-204 Committee Meetings
Meetings of the Committee shall be held as needed. Meetings may be held by any appropriate, acceptable means of communication. A majority of the Committee is needed to constitute a quorum for transacting the business of the Committee.

G-205 Affiliate Chair
The Chair of the Affiliate Council shall be an ex-official member of the CISC without the right to vote.

G-300 Requirements for Approval and Operation Standards
An approved Affiliate industry credit group sponsor will provide worthwhile services to NACM members and fulfill the requirements and responsibilities as an Affiliate credit group sponsor. The following are the standards to which approved Affiliate sponsors subscribe, endorse and agree to comply:

G-301 Group Registry
Each Affiliate which sponsors industry credit groups shall register them with NACM. This registry is for information purposes so that a prospective group member may be properly directed. The registration shall include the following information:

G-302 Group Geographic Classification
Groups shall be classified by the geographic areas represented by the members of the group:

G-303 Investigation and Approval
An Affiliate wishing to be recognized as an approved Affiliate industry credit group operator will provide written documentation, affirming to the requirements listed herein, to the CISC Committee. If the Committee finds the application in order it shall approve the application, and the Chair shall so notify the Affiliate Council and the NACM President. No Affiliated Association shall hold itself out to be an NACM approved industry credit group service provider, using the NACM name and\or logo, unless it has been approved by the CISC Committee. All NACM Affiliates approved to provide credit group services that were registered with the NACM National as “approved” as of June 1, 1994, will be deemed approved as of the adoption of this Code of Conduct, unless it has ceased its industry credit group operation, outsourced or sold its industry credit group operation, or its approval has been revoked.

G-304 Disapproval and Appeal Process
If the Committee does not approve the application, the applicant shall be promptly advised by the CISC Chair. Any decision of the Committee may be appealed in writing to the NACM Affiliate Council within 60 days of receipt of notice. The appeal will be considered by the Council at the next scheduled Council meeting. The decision of the Council shall be final and binding on all parties.

G-305 Revocation of Approval and Appeal Process
The Committee may, for due cause, suspend or revoke the approval of an Affiliate’s status as an approved NACM credit group provider. “Due cause” may include, without limitation, violation of any provision of this Code of Conduct. The procedures for appeal of a suspension or revocation of appeal shall be identical to the procedures for disapproval as set forth in G-304.

G-306 Effect of Revocation
In the event that an Affiliate’s approval is revoked, such Affiliate will not use the name, National Association of Credit Management, or the logo of NACM, on any marketing or sales literature, or any form or correspondence involving the operation of industry credit groups.

G-307 Noncompliance to this Code
Noncompliance to any section of this Code of Conduct may be reviewed by the CISC and forwarded to the Affiliate Council for action. Issues and/or complaints of noncompliance with this Code, brought to the CISC for investigation, will result in written notice of noncompliance when appropriate.

G-308 Complaints of Noncompliance
All complaints of noncompliance of any section of these Codes of Conduct shall be forwarded to the CISC for investigation and the Committee findings will be forwarded to the Affiliate Council for appropriate action. Within 60 days of written notice from the CISC, the Affiliate may appeal to the Affiliate Council for a hearing.

G-309 Cessation of Industry Credit Groups
Should an Affiliate cease its industry credit group activities for a period of 12 consecutive months, the Affiliate’s status as an approved provider will expire. Outsourcing the operation and management of industry credit groups to a non NACM Affiliate entity not owned by the Affiliate will also result in forfeiture of the Affiliate’s status as an approved provider. The Affiliate must reapply before operating as an NACM approved industry credit group provider.

G-310 Spirit of Cooperation
In the spirit of cooperation among NACM Affiliate credit group providers, should an Affiliate be contacted and asked to bid on the management of a credit group that is under the management of another NACM Affiliate, the “bidding” Affiliate will notify the current Affiliate sponsor of the request. The practice of placing a courtesy call to inform the current sponsor of a requested to bid is considered as a best practice among approved Affiliate group sponsors.

G-311 Changes to this Code
Any substantive changes to these Codes of Conduct shall require approval of the Affiliate Council and an affirmative vote by two-thirds of Affiliates approved for group services. Non-substantive changes must be approved by the CISC and Affiliate Council.

G-400 General Responsibilities of an Affiliate Industry Credit Group Provider
It is the responsibility of each Affiliate which sponsors groups to make sure all services, activities and procedures of those groups comply with all laws and regulations governing the exchange of confidential credit information. Compliance with antitrust laws, and regulations which might apply to group activities must be assured. Qualified and trained Affiliate personnel or authorized representatives must limit discussions to permissible topics and intervene and stop discussion deemed to be inappropriate. If necessary, the meeting must be adjourned should group members persist in illegal or improper discussions.

G-401 Group Meeting Requirements
All group meetings must be attended by a staff employee or an authorized representative of the sponsoring Affiliate. The Affiliate will appoint a qualified representative as Group Secretary who shall attend all group meetings and whose duties include, but are not limited to, the following:

G-500 Group Rules and Procedures
Each group shall be formally organized and as such, have written rules and procedures (Rules) which set forth the following:

G-501 Industry Credit Group Meeting Agenda
Every meeting of a group should be conducted in accordance with a prepared agenda including actions to be taken at the meeting.

G-502 Industry Credit Group Meeting Minutes
Minutes of each group shall be prepared by the Secretary and it is recommended the minutes be kept by the sponsoring Affiliate for two years. Minutes should include the following:

G-503 Member Compliance
It shall be the responsibility of the sponsoring Affiliate to ensure that no group makes improper use of any service, and to ensure the group name is not used by any member in connection with any improper action which violates the Rules, the NACM Policy Statement, or any laws governing the operation of the group. The sponsoring Affiliate should see that such improper actions cease immediately and if, after due explanation and warning, any such improper action by the group or its members continues, then the association must withdraw its sponsorship, its services and the use of the NACM designation from that group.

G-504 Membership Requirements
In order to participate as a member of a group, the individual must be a properly authorized representative of a company holding a membership in the sponsoring Affiliate, or a membership in another NACM Affiliate. In order to meet this NACM membership requirement, the particular company must be reported to the NACM headquarters as a member of such an NACM Affiliate.

G-600 Policy for Conduct and Operation of Industry Credit Groups
The NACM Policy for Conduct and Operation of Industry Credit Groups, a copy of which is attached, is to be observed by all NACM Industry Credit Groups.

NATIONAL ASSOCIATION OF CREDIT MANAGEMENT
NATIONAL POLICY STATEMENT
POLICY FOR CONDUCT AND OPERATION
OF NACM INDUSTRY CREDIT GROUPS

Recognizing the importance of NACM Industry Credit Groups to executive members of the National Association of Credit Management and the importance of these Groups to NACM Affiliated Associations, the Board of Directors of NACM, meeting in Palm Springs, California on November 13,1980 adopts the following policy for the Conduct and Operation of NACM Industry Credit Groups by NACM Affiliated Associations.

NACM Industry Credit Group Organization
NACM Affiliated Associations are urged to follow the procedures and recommendations for the organization’s NACM Industry Credit Groups as contained in the NACM Guide for the Operation of Industry Credit Groups. It is specifically urged and recommended that all NACM-sponsored Credit Groups have official bylaws and/or rules of procedure that detail the organization and procedures of the Credit Group.

NACM Industry Credit Group Services
NACM Affiliated Associations sponsoring and operating NACM industry groups shall make certain that only services which are legal and proper are provided for members of NACM Industry Credit Groups as outlined in the NACM Guide for the Operation of Industry Credit Groups.

NACM Affiliated Associations must make every effort that the group and/or the members thereof do not engage in improper activities as explained in the NACM Guide for the Operation of Industry Credit Groups during formal meetings or in private discussions outside formal meetings.

While the services and activities of NACM Industry Credit Groups are legal and proper, NACM Affiliated Associations must make every effort that the intent, effect and use of any service and/or activity is also legal and proper.

No service provided by an NACM Industry Credit Group may be used by Group members to promote, encourage or have any effect of uniform or concerted action by Group members.

Should any NACM Affiliated Association find that any service provided to any NACM Industry Credit Group has an improper effect in the marketplace, or if improper use is being made of any service by group members, the sponsoring NACM Affiliated Association shall discontinue the operation of such service or activity. Should any NACM Industry Credit Group sponsored by an NACM Affiliated Association persist in improper services or activities, the NACM Affiliated Association, after due explanation and warning, must withdraw its sponsorship, services and use of the NACM designation.

It will be the duty and responsibility of each NACM Affiliated Association’s Chief Operating Officer to hold a periodic, but not less than annual, review with Association staff and Group members, concerning proper Group Operating Rules and Standards.

NACM Industry Credit Group Meetings
Only official, scheduled and monitored meetings of NACM Industry Credit Groups shall be permitted, and Credit Group members shall be advised that only such official, scheduled and monitored meetings should be attended.

A staff employee or authorized representative of the sponsoring NACM Association shall attend all NACM Industry Credit Group meetings and shall act as Secretary and meeting monitor. No meeting of any NACM Credit Group shall be authorized without the presence of this representative.

Agendas, however brief, shall be prepared for each NACM Industry Credit Group meeting. Such agendas shall include such topics as are deemed legal and proper as explained in the NACM Guide for the Operation of Industry Credit Groups.

It is urged and recommended that each NACM Affiliated Association and/or NACM Industry Credit Group adopt an official Group Antitrust Compliance Statement, similar to that recommended in the NACM Guide for the Operation of Industry Credit Groups, and that the meeting Secretary/Monitor make certain that this Statement is presented at the beginning of each Credit Group Meeting, either orally or in writing.

Official minutes of all NACM Industry Credit Group meetings shall be recorded by the meeting Secretary/Monitor and shall be kept on file by the NACM sponsoring Association office for two years.

Meeting minutes must:

It is recommended that any policy or procedural decisions made by the Group be recorded and documented as procedures, standing rules, etc. This will ensure the preservation of policy and procedural decisions even though meeting minutes are destroyed after two years.

Standing rules can be appended to Group Bylaws; a policy and procedure document can be also be appended to bylaws.

NACM Industry Credit Group Records
Because of the length of time usually encompassed by any antitrust or other legal action, it is recommended that the NACM Industry Credit Group records, such as meeting agendas, meeting minutes and other pertinent documents, be maintained in file by the NACM sponsoring Association for a period of two years.

Approved NACM Collection Agencies

SECTION I

C-100 Preface
In keeping with the fundamental purposes of the National Association of Credit Management, many of its affiliated associations (Affiliates) offer formal assistance to members for collecting delinquent accounts. The collection efforts of NACM Affiliates can, and do provide members an effective and economical credit management tool. Active promotion, efficient practices, and proper and ethical procedures involving these collection activities will enhance the image of NACM within the business community and provide a vital source of revenue to the Affiliates.

C-101 The NACM Affiliate Collection System
The NACM Collection System is a cooperative arrangement of NACM Affiliates, which can facilitate nationwide collection services to members of NACM and others. The success and professional image of the NACM Collection System is dependent upon:

C-200 Asset Management Services Committee
The Asset Management Services Committee (AMSC) oversees all activities of NACM Affiliates approved to operate and offer NACM Affiliate adjustment and collection services. Through cooperation with each other, a nationwide collection service system is created.

C-201 System Supervision
The system is under the supervision of the AMSC. The Asset Management Services Committee is also responsible for promoting, improving and monitoring the collection activities of the Affiliates providing collection services for the common benefit of all NACM members and other clients. The Committee jointly or severally shall:

C-202 Committee Composition
There will be up to six voting members of the AMSC. One of the six members will serve as the Chair of the Committee. Because approved collection services are offered by a majority of NACM Affiliates, a best effort will be made to ensure that each geographic region will be represented by a COO of an Affiliate approved for collection services. If the Affiliates of the regional representatives do not also offer approved adjustment services, then the a COO from an Affiliate approved for NACM adjustment services will also be elected to the Committee. Each member of the Committee is to be elected for a two-year term, staggered so that two Committee members are elected each year. Any elected member of the Committee may not be elected to more than two (2) consecutive terms. [Note: The Composition of the Committee stated herein differs from that outlined in the Affiliate Agreement; the Affiliate Agreement calls for a Committee of eight members. The smaller Committee size noted here is more reflective of the number of Affiliates.]

C-203 Committee Chair
The Chair of the Committee (Chair) shall be employed as Chief Operating Officer for two years of an Affiliate which has been “approved” as an NACM Affiliate collection services provider under these rules. The Chair shall be a member of the Committee as defined in C-202 and shall be elected by majority vote of the Committee for a one-year term and may be reelected to a maximum of two consecutive terms.

C-204 Advisory Panel
The Committee may avail itself of guidance from an Advisory Panel consisting of Managers of approved Affiliate Adjustment and Collection Departments, who are to be appointed by the Chair with the advice and consent of the Committee members and/or members of the regions that may nominate them. Advisory Panel members will serve without a vote. C-205 Vacancies Within the Asset Management Services Committee Vacancies occurring during a term of office will be filled by election at the earliest opportunity within the respective regions from which the vacancies occur.

C-206 Committee Meetings
Meetings of the Committee may be held by any appropriate, acceptable means of communication. A majority of the Committee is needed to constitute a quorum for transacting the business of the Committee.

C-207 Affiliate Council Chair
The Chair of the Affiliate Council shall be an ex-officio member of the AMSC without the right to vote.

C-300 Requirements for Approval and Operations Standards
An approved NACM Affiliate collection agency/operation will provide worthwhile collection services to NACM members and others and fulfill the responsibilities of an NACM Affiliate Approved Collection Agency. The following are the requirements for approval and minimum standards to which approved NACM Affiliate collection agencies/operations subscribe and endorse:

C-301 Approval as an NACM Affiliate Collection Agency
An Affiliate wishing to be approved as an NACM Affiliate collection agency or service provider will present to the AMSC Chair written documentation, affirming to the requirements listed herein along with a copy of a resolution by its Board of Directors:

C-302 Investigation and Approval Process
If the Committee finds the application documentation in order it shall approve the application, and the Chair shall so notify the Affiliate Council and the NACM President. All NACM Affiliates approved to provide collection services that were registered with NACM National as “approved” as of June 1, 1994, will be deemed approved as of the adoption of this Code of Conduct, unless it has ceased its collection operations, outsourced or sold its collection operations, or its approval has been revoked.

C-303 Disapproval and Appeal Process
If the Committee does not approve the application request, the applicant shall be promptly advised by the AMSC Chair. Any decision of the Committee may be appealed in writing to the Affiliate Council within 60 days of receipt of notice. The appeal will be considered at the next scheduled Council meeting. The decision of the Council shall be final and binding on all parties.

C-304 Revocation of Approval and Appeal Process
The Committee may, for due cause, suspend or revoke the approval of an NACM Affiliate ‘s collection agency. “Due cause” may include, without limitation, violation of any provision of this Code of Conduct or against the agency following a written complaint by a collection client or forwarder, or another approved agency, alleging one or more violations of this Code of Conduct. The procedures for appeal of a suspension or revocation shall be identical to the procedures for disapproval as set forth in C-302.

C-305 Effect of Revocation
In the event that an Affiliate’s approval is revoked, such Affiliate may not use the name, National Association of Credit Management, or the logo of NACM, on any marketing or sales literature, or any form or correspondence involving the collection of debts.

C-306 Noncompliance and Complaints of Noncompliance to this Code
Noncompliance with any section of this Code of Conduct may be reviewed by the AMSC and forwarded to the Affiliate Council for action. Issues and/or complaints of noncompliance with this Code, brought to the AMSC for investigation, will result in written notice of noncompliance when appropriate.

C-307 Cessation of an Approved Collection Operations/Agency
Should an Affiliate cease its collection agency/operation activities for a period of 12 consecutive months, the Affiliate’s status as an approved provider will expire. Outsourcing the operation and management of collection services to a non-NACM Affiliate entity will also result in forfeiture of the Affiliate’s status as an approved provider. The Affiliate must reapply before operating as an NACM approved collections provider/agency.

C-308 Changes to this Code
Any substantive changes to this Codes of Conduct shall require approval of the Affiliate Council and an affirmative vote by two-thirds of Affiliates approved as collection service providers. Non-substantive changes should be approved by the AMSC and Affiliate Council.

C-400 Reporting by Approved NACM Affiliate Agencies
All approved agencies are urged to submit accurate statistical information on a regular basis to the AMSC, which will compile useful and valid information pertaining to the volume and effectiveness of the collection activities of all approved agencies. The AMSC will provide each approved agency with operational statistics to enhance its ability to identify and correct operational deficiencies.

C-500 Complaints from Members or Other NACM Approved Agencies
Any and all complaints to an approved agency regarding the collection service offered or performed for a member and/or another NACM approved agency must have the prompt, personal attention of the agency. If a complaint involves an out-of-trust condition or an unresolved complaint between agencies, the complaint, including all appropriate information and documentation, must be communicated to the AMSC Chair.

SECTION II
GUIDELINES FOR THE HANDLING OF COLLECTION CLAIMS BY APPROVED NACM AFFILIATE AGENCIES

C-601 Introduction
These guidelines for handling accounts by approved NACM Affiliate agencies govern relations between approved Affiliate agencies and the collection clients they serve, and between approved agencies and attorneys.

C-602 Operative Guidelines of the CLLA
As stated in C-300i, all approved agencies should adhere to the “Operative Guidelines for Forwarders and Receivers” adopted by the Commercial Law League of America. Although the “Operative Guides” specifically refer to relationships between agencies and attorneys, they are applicable to the forwarding and receiving of collection accounts between NACM approved agencies.

C-603 Additional Guidelines and Standards
The following additional guidelines are meant to emphasize some of the “Operative Guide” provisions, and form the basis of recommended minimum procedural standards within and among approved NACM Affiliate agencies. These guidelines apply only in the absence of any other contract or arrangement that exist among approved NACM Affiliate agencies and between an approved NACM Affiliate agency and its clients.

The standards of operation suggested in this section represent a basic level of service to collection clients and forwarding agencies. All approved agencies are encouraged to develop standards and procedures surpassing the minimum standards to continually increase the level of service provided.

C-604 Creditor Interests and Instructions
Each NACM Affiliate agency will protect the interest of the creditor through prompt and diligent attention to all accounts received for collection. In all cases, the creditor’s instructions as to what service is to be rendered, including whether or not an attorney will be used, will control collection activities.

C-605 Inter-Agency Forwarding of Accounts

C-606 Minimum Services to be Rendered

C-607 Commissions
On collection claims forwarded from an approved NACM Affiliate agency:

C-608 Remittance of Collected Funds
NACM Affiliate receiving agencies are expected to remit monies collected, less their commissions, as soon as possible after the clearance of the debtors’ checks.

C-609 Settlements
An NACM Affiliate receiving agency is not authorized to settle an account other than paid in full, without the specific authority of the creditor.

C-610 Ethical Standards Approved
NACM Affiliate agencies endorse and agree to comply with the highest ethical standards including, but not limited to, the following:

Approved Adjustment Bureaus

A-100 Purpose
The purpose of the adjustment process is to provide administrative and fiduciary services to distressed debtors and their creditors in commercial insolvencies, whether administered out of court or in bankruptcy.

A-101 NACM Affiliated Association Adjustment Service
The Adjustment Service (the Service) is a cooperative arrangement of Adjustment Bureaus owned and operated by NACM Affiliate Associations to provide nationwide Adjustment Administration Services to NACM members and others, and to assist those providing the service to become and remain qualified to do so.

A-102 Scope of the Service
Solving the problems involved in commercial reorganizations and liquidations requires proven capability and experience with the various types of case administrations, including out-of-court extensions, compromise settlements and liquidation procedures. Court related case administration in which NACM Affiliate Adjustment Bureaus may be involved include Chapter 11 reorganizations under the U.S. Bankruptcy code and other procedures such as state court actions and special administrative proceedings.

A-103 Code of Ethics
In providing services in bankruptcy or out-of-court adjustment cases, all approved NACM Adjustment Bureaus will adhere to the Code of Ethics set forth in A-500.

ORGANIZATION OF THE SERVICE

A-200 Asset Management Services Committee
The Asset Management Services Committee (AMSC) oversees all activities of NACM Affiliates approved to operate and offer NACM Affiliate adjustment and collection services. Through cooperation with each other, an NACM Affiliate Adjustment Service System is created.

A-201 System Supervision
The NACM Affiliate Adjustment Service System is under the supervision of AMSC. The goals of the Service are to promote reasonable conformity in practices and procedures in the administration of cases, and the rendering of such services by qualified NACM Adjustment Bureaus and personnel. The Committee jointly or severally shall:

A-202 Committee Composition
There will be up to six voting members of the AMSC. One of the six members will serve as the Chair of the Committee. Because approved collection services are offered by a majority of NACM Affiliates, each geographic region will be represented by a COO of an Affiliate approved for collection services. If the Affiliates of the regional representatives do not also offer approved adjustment services, then the a COO from an Affiliate approved for NACM adjustment services will also be elected to the Committee. Each member of the Committee is to be elected for a two-year term, staggered so that two Committee members are elected each year. Any elected member of the Committee may not be elected to more than two (2) consecutive terms. [Note: The Composition of the Committee stated herein differs from that outlined in the Affiliate Agreement; the Affiliate Agreement calls for a Committee of eight members. The smaller Committee size noted here is more reflective of the number of Affiliates.]

A-203 Committee Chair
The Chair of the Committee (Chair) shall be employed as Chief Operating Officer for two years of an Affiliate which has been “approved” as an NACM Affiliate commercial collection or adjustment services provider under these rules. The Chair shall be a member of the Committee as defined in A-202 and shall be elected by majority vote of the Committee for a one-year term and may be reelected to a maximum of two consecutive terms.

A-204 Advisory Panel
The Committee may avail itself of guidance from an Advisory Panel consisting of Managers of approved NACM Affiliate Adjustment Bureaus and Approved Affiliate Collection Departments, to be appointed by the Chair with the advice and consent of the members of the Committee and/or of the regions that may nominate them. Advisory Panel members shall serve without a vote.

A-205 Vacancies Within the Committee
Vacancies occurring during a term of office will be filled by election at the earliest opportunity within the respective regions from which the vacancies occur.

A-206 Committee Meetings
Meetings of the Committee may be held by any appropriate, acceptable means of communication. A majority of the Committee is needed to constitute a quorum for transacting the business of the Committee.

A-207 Affiliate Council Chair
The Chair of the Affiliate Council shall be an ex-officio member of the AMSC.

A-300 Requirements for Approval and Operations Standards
Affiliates should be able to provide worthwhile services to NACM members and fulfill the responsibilities of an NACM Affiliate offering approved NACM Adjustment Services. The following are standards to qualify and continue to be recognized as an NACM Affiliate approved to offer NACM Adjustment services.

An Affiliate’s approved Adjustment service/operation:

A-301 Approval as an NACM Affiliate Adustment Services Provider
An NACM Affiliate wishing to become approved to render the Service by filing a written request for approval with the AMSC Chair of the Committee: The request must include a copy of a resolution by the applicant’s Board of Directors requesting approval as an NACM Affiliate Adjustment Services provider. The request notification will be in writing and will set forth how an applicant for approval has met or proposes to meet the specific requirements of paragraph A-300 and the other requirements appearing in this Code.

A-302 Request Investigation and Approval
The AMSC shall make an investigation to determine whether an applicant meets the requirements of paragraph A-300. If the AMSC finds the application in order, it shall approve the application, and the Chair shall so notify the Affiliate Council and the NACM President, who may then inform the Board of Directors. All NACM Affiliates approved to provide adjustment services that were registered with the NACM National as “approved” as of June 1, 1994, will be deemed approved as of the adoption of this Code of Conduct, unless it has ceased its adjustment operation, outsourced or sold its adjustment operations, or its approval has been revoked.

A-303 Disapproval; Appeal Process
If the AMSC does not approve the application, the applicant shall be promptly advised by the Chair. Any decision of the AMSC may be appealed in writing to the Affiliate Council within 60 days of receipt of notice. The appeal will be considered by the Council at the next scheduled Council meeting. The decision of the Council shall be final and binding on all parties.

A-304 Affiliates Approved for Adjustment Services
Only approved Affiliates may provide NACM Adjustment Services. No Affiliated Association will hold itself out to be an NACM approved adjustment service provider, using the Affiliate’s name and\or logo, unless it has been approved by the AMSC Committee.

A-305 Revocation of Approval and Appeal Process
The Committee may, for due cause, suspend or revoke an Affiliate’s status as an approved NACM adjustment service provider. “Due cause” may include, without limitation, violation of any provision of this Code of Conduct. The procedures for appeal of a suspension or revocation of appeal shall be identical to the procedures for disapproval as set forth in A-301.

A-306 Complaints of Noncompliance
One of the grounds for revocation of the adjustment service approval of an Affiliate will be based on a complaint by another Affiliate alleging one or more violations of the provisions of this Code. All complaints of noncompliance of any section of these Codes of Conduct will be forwarded to the AMSC Committee for investigation and the Committee findings will be forwarded to the Affiliate Council for appropriate action. Within 60 days of written notice from the AMSC, the Affiliate may appeal to the Affiliate Council for a hearing.

A-307 Hearing of Complaints
The AMSC has authority to hear complaints of an Affiliate requesting approval or revocation of adjustment services of an Affiliate. At such hearing the Affiliate charged shall be provided notice of the complaint, and shall have the right to appear and be represented by counsel, at its own expense.

A-308 Effect of Revocation
In the event that an Affiliate’s approval is revoked, and during such time as an Affiliate’s approval is suspended, such Affiliate will not use the name, National Association of Credit Management, or the logo of NACM, on any marketing or sales literature, or any form or correspondence involving the operation of Adjustment Services.

A-309 Noncompliance to this Code
Noncompliance with any section of these Codes of Conduct may be reviewed by the AMSC and forwarded to the Affiliate Council for action. Issues and/or complaints of noncompliance with the Code, brought to the AMSC for investigation, will result in written notice of noncompliance when appropriate.

A-310 Cessation of Adjustment Services
Should an Affiliate cease its adjustment services activities for a period of 12 consecutive months, the Affiliate’s status as an approved provider will automatically expire. Outsourcing the operation to a non-NACM Affiliate entity will also result in automatic forfeiture of the Affiliate’s status as an approved provider. The Affiliate must reapply before operating as an NACM approved service provider.

A-311 Changes to this Code
Any substantive changes to this Code of Conduct shall require approval of the Affiliate Council and an affirmative vote by two-thirds of Affiliates approved for adjustment services. Non-substantive changes must be approved by the AMSC and Affiliate Council.

A-312 Assistance by Other Affiliates
The AMSC and the Affiliate Adjustment Service System recommends that where a case is larger or more complex than that Affiliate’s Adjustment operation’s finances (including bond or insurance coverage) and/or its personnel can reasonably accommodate, such Affiliate obtain the assistance of an another approved Adjustment Service Affiliate having greater financial resources and/or more experienced Adjustment personnel.

A-313 Education
The Committee shall establish a continuing educational program to:

ENFORCEMENT PROVISIONS

A-400 Out of Trust Condition Forbidden
No approved Affiliate Adjustment Service/Operation shall be “out of trust” regarding any estate entrusted to it. “Out of Trust” is defined as a condition in which the Affiliate Adjustment Service/Operation itself owes the fiduciary duty of payment to any party that the Bureau lacks the funds to cover. The AMSC is authorized to receive complaints concerning any “out of trust” condition and to revoke or suspend approval of any Affiliate Adjustment Service/Operation found to be out of trust. Upon such revocation or suspension the affected Affiliate shall no longer be authorized to use the NACM seal or the state it is “Affiliated with the National Association of Credit Management” on any stationary or printed matter referring to its Adjustment services.

A-401 Notice of Suspension or Revocation
Notice of suspension or revocation of approval by the AMSC must be given immediately to the NACM President, to the Chief Operating Officers of all other Affiliates which have “approved” Adjustment Service/Operations and to the officers and management of the Affiliate that controls the affected service/operation.

A-402 Appeals
Appeal from any decision or ruling by the AMSC shall be to the NACM Affiliate Council, whose ruling shall be final and binding on all parties.

A-403 Reinstatement
An Affiliate Adjustment Service/Operation whose “approved” rating has been suspended or revoked may be reinstated upon satisfactory evidence that its “out of trust” condition has been cured. However, an Affiliate Adjustment Service/Operation found on three separate occasions to be out of trust shall have its approved status revoked for a period of not less than five years, unless such action is waived by a three-fourths majority vote of the AMSC.

A-500 Code of Ethics

Code of Ethics
for Approved Adjustment Bureaus of
Associations Affiliated with the
National Association of Credit Management

An approved NACM Affiliate Adjustment Service/Operation will operate under the following Code of Ethics:

! An NACM Affiliate Adjustment Service/Operation will advise every debtor not already represented by attorney of the right to legal counsel before commencing any out-of-court case.