What changed in this filing

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Item 1. Business

2022-02-23 compared with 2021-02-24 · 76 added, 82 removed, 378 unchanged (29% of the section changed)

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Defaulted receivables may also include receivables subject to bankruptcy proceedings.

We also provide debt servicing and other portfolio management services to credit originators for non-performing loans.

We also provide debt servicing and other portfolio management services to credit originators for non-performing loans in Europe.

Through Midland Credit Management, Inc.

and its domestic affiliates (collectively, “MCM”) we are a market leader in portfolio purchasing and recovery in the United States.

Through Cabot Credit Management Limited (“CCM”) and its subsidiaries and European affiliates (collectively, “Cabot”) we are one of the largest credit management services providers in Europe and a market leader in the United Kingdom and Ireland.

These are our primary operations.

We also have additional international investments and operations as we have explored new asset classes and geographies including:

(1) our investments in non-performing loans in Colombia, Peru and Mexico;

and (2) an investment in Encore Asset Reconstruction Company (“EARC”) in India.

(1) an investment in Encore Asset Reconstruction Company (“EARC”) in India and (2) an investment in portfolio in Mexico.

We refer to these additional international operations as our Latin America and Asia-Pacific (“LAAP”) operations.

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Those accounts are generally serviced in the country of origin.

When we refer to Europe, we are referring to Europe including the United Kingdom.

Company Information

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Leveraging an industry-leading financially distressed consumer database, our in-house team of statisticians, business analysts, and software programmers have developed, and continually enhance, proprietary behavioral and valuation models, custom software applications, and other business tools that guide our portfolio purchases.

We have been able to leverage over 20 years of data, insights, modeling and operational integration.

We have been able to leverage over 20 years of data, insights, modeling and operational experience.

Each year we invest significant capital to purchase credit bureau and customized consumer data that describe account level and macroeconomic factors related to credit, savings, and payment behavior.

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Encore’s established regulatory and compliance programs are a key differentiator that enables the Company to successfully and efficiently demonstrate its expertise to credit providers.

MCM averages approximately 35 issuer audits and due diligence exercises per year and has achieved certification from all major U.S.

MCM has achieved certification from all major U.S.

issuers who sell their charged-off accounts to third parties.

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We also experience considerable cost advantages stemming from our scale and focus on collecting in a cost-efficient manner.

Our operations in India and Costa Rica have been critical to achieving these improvements.

We are one of the only companies in the industry with a successful, late stage collection platform in India, which has helped to reduce our call center variable cost-to-collect while maintaining our quality standards.

Our operations in India and Costa Rica have been critical to achieving these efficiencies.

Competitive Advantage.

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Balance Sheet Strength .

We are focused on optimizing our balance sheet while delivering strong financial and operational results.

This includes increasing our cash flow generation through efficient collection operations and applying excess cash toward reducing our debt, reducing financial leverage.

In addition, through our new global funding structure established in September 2020, we have reduced our funding costs, enhanced our access to capital markets and increased our financial flexibility, particularly with respect to our ability to allocate capital to our markets with the best risk-adjusted returns.

We are focused on strengthening our balance sheet while delivering strong financial and operational results.

This includes increasing our cash flow generation through efficient collection operations.

Depending on our relative leverage, we may apply excess cash toward reducing our debt or, in circumstances in which we are operating within or below the lower end of our target leverage range, we may allocate capital toward share repurchases.

Furthermore, we believe our global funding structure enhances access to capital markets and provides us with financial flexibility, particularly with respect to our ability to allocate capital to our markets with the best risk-adjusted returns.

Our Priority Framework

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Our ongoing training and monitoring efforts help ensure compliance with applicable laws and policies by account managers.

• Digital Collections .

We have made significant progress in developing our digital strategies and continue to analyze and optimize our digital strategies and our collection website.

Currently consumers can access their account information, view supporting documents and make payments through our website.

We leverage direct mail, email, and search engines to promote our digital channel to our consumers.

Account managers in our call centers are also encouraged to make consumers aware of our digital channels including our website.

We expect digital collections to increase as we continue to develop our digital strategies and more consumers become aware of the digital channel.

• Legal Action .

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If referred to our network of retained law firms, we rely on our law firms’ expertise with respect to applicable debt collection laws to evaluate the accounts placed in that channel in order to make the decision about whether or not to pursue collection litigation.

Prior to engaging an external law firm (and throughout our engagement of any external law firm), we monitor and evaluate the firm’s compliance with consumer credit laws and regulations, operations, financial condition, and experience, among other key criteria.

Prior to engaging an external law

firm (and throughout our engagement of any external law firm), we monitor and evaluate the firm’s compliance with consumer credit laws and regulations, operations, financial condition, and experience, among other key criteria.

The law firms we hire may also attempt to communicate with the consumers in an attempt to collect their debts prior to initiating litigation.

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Generally, we use these agencies when they can generate more collections than our internal call centers or can do so at a lower cost.

• Digital Collections .

We have made significant progress in developing our digital strategies and continue to analyze and optimize our digital strategies and our collection website.

Currently consumers can access their account information, view supporting documents and make payments through our website.

We leverage direct mail, email, and search engines to promote our digital channel to our consumers.

Account managers in our call centers are also encouraged to make consumers aware of our digital channels including our website.

We expect digital collections to increase as we continue to develop our digital strategies and more consumers become aware of the digital channel.

We strive to use our financial resources judiciously and efficiently by not deploying resources on accounts where the prospects of collection are remote based on a consumer’s situation.

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For paying accounts, we seek to engage with the consumers to transfer their payment stream to us and understand their detailed financial situation.

For non-paying accounts, we apply a segmentation framework tailoring our communication and contact intensity in line with our assessment of their credit bureau data, the size of their debt, and whether we have an existing relationship with them from other accounts.

For non-paying accounts, we apply a segmentation framework tailoring our communication and contact intensity in line with our assessment of their credit bureau data, the size of their debt, our belief as to the consumer’s ability to pay their debt, and whether we have an existing relationship with them from other accounts.

Where contact is made and consumers indicate both a willingness and ability to pay, we create tailor-made payment plans to suit the consumer’s situation.

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Debt Servicing

Our debt servicing operations, which are primarily performed by subsidiaries of Cabot, include early stage collections, business process outsourcing and contingent collections for credit originators.

Our debt servicing operations, which are performed by subsidiaries of Cabot, include early stage collections, business process outsourcing and contingent collections for credit originators.

We mainly provide debt servicing for consumer accounts, but also provide services for business-to-business accounts.

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The seasonal impact on our business may also be influenced by our purchasing levels, the types of portfolios we purchase, and our operating strategies.

Collection seasonality can also affect revenue as a percentage of collections, also referred to as our revenue recognition rate.

Generally, revenue for each pool group declines steadily over time, whereas collections can fluctuate from quarter to quarter based on seasonality, as described above.

In quarters with lower collections ( e.g., the fourth calendar quarter), the revenue recognition rate can be higher than in quarters with higher collections ( e.g., the first three calendar quarters).

In addition, seasonality could have an impact on the relative level of quarterly earnings.

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Cabot (Europe)

While seasonality does not have a material impact on European operations, collections are generally strongest in the second and third calendar quarters and slower in the first and fourth quarters, largely driven by the impact of the December holiday season and the New Year holiday, and the related impact on consumers’ ability to repay their balances.

This drives a higher level of payment plan defaults over this period, which are typically repaired across the first quarter of the following year.

The August vacation season in the United Kingdom also has an unfavorable effect on the level of collections, but this is traditionally compensated for by higher collections in July and September.

While seasonality does not have a material impact on European operations, in the years preceding the COVID-19 pandemic collections were generally strongest in the second and third calendar quarters and slower in the first and fourth quarters, largely driven by the impact of the December holiday season and the New Year holiday, and the related impact on consumers’ ability to repay their balances.

This drove a higher level of payment plan defaults over this period, which were typically repaired across the first quarter of the following year.

The August vacation season in the United Kingdom also had an unfavorable effect on the level of collections, but this was traditionally compensated for by higher collections in July and September.

Following the start of the COVID-19 pandemic there has been more variability in quarterly collections and the impact of seasonality has been more difficult to predict.

Compliance and Enterprise Risk Management

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Our first line of defense consists of business lines or other operating units, whose role is to own and manage risks and associated mitigating controls.

Our second line of defense is comprised of strong legal, compliance, and enterprise risk management functions, who ensure that the business maintains policies and procedures in compliance with existing laws and regulations, advise the business on assessing risk and strengthening controls, and provide additional, related support.

line of defense is comprised of strong legal, compliance, and enterprise risk management functions, who ensure that the business maintains policies and procedures in compliance with existing laws and regulations, advise the business on assessing risk and strengthening controls, and provide additional, related support.

These second-line functions facilitate oversight by our management and Board of Directors and are responsible for promoting compliance with applicable laws and regulations, assisting in formulating and maintaining policies and procedures, and engaging in training, risk assessments, testing, monitoring, complaint response, compliance audits and corrective actions.

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To provide assurance that our technology solutions continue to operate efficiently and securely, we have developed strong process and control environments.

These governance, risk management, and control protocols govern all areas of the enterprise:

from physical security and cybersecurity, to change management, data protection, and segregation of duties.

Cybersecurity.

We divide our cybersecurity and information security functions into the four core tenets that we believe make up a solid information security practice:

(1) security strategy and architecture;

(2) operational security;

(3) vulnerability and threat management;

and (4) IT governance, risk and controls.

We invest in cybersecurity and advanced technologies, including next generation threat prevention and threat intelligence solutions, to protect our organization and consumer and proprietary data throughout its life cycle.

We believe that our adoption and implementation of leading security frameworks for the financial services industry and the regulatory environments and geographies in which we operate demonstrates our commitment to cybersecurity and information security.

To ensure the integrity and reliability of our environment, we periodically engage outside auditors specializing in information technology and cybersecurity to examine and test our operating systems, technical posture as well as our detection and response capabilities, including our disaster recovery plans.

These governance, risk management, and control protocols govern all areas of the enterprise, including from physical, information and cyber security, change management, data protection and segregation of duties.

Information Security.

We divide our information security program into the three core tenets that we believe result in a solid information security practice:

(1) Governance Risk and Compliance (GRC);

(2) Security Operations;

and (3) Security Engineering and Architecture.

We invest in technologies to protect our organization and consumer and proprietary data throughout its life cycle.

We believe that our adoption and implementation of leading security frameworks and certifications demonstrate our commitment to protecting consumer information and our enterprise.

To ensure the integrity and reliability of our environment, we periodically engage outside specialists to examine and test our systems, technical posture as well as our detection and response capabilities, including our disaster recovery plans.

Through this work, we are able to adopt recommendations and adjust our information and cyber security posture to the constantly changing threat landscape.

The consumer credit recovery industry is highly competitive in the United States, the United Kingdom and throughout Europe.

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We believe that smaller competitors in the United States and the United Kingdom are facing difficulties in the portfolio purchasing market because of the higher cost to operate due to increased regulatory pressure and scrutiny applied by regulators.

In addition, sellers of charged-off consumer receivables are increasingly sensitive to the reputational risks involved in the industry and are therefore being more selective with buyers in the marketplace.

In addition, sellers of charged-off consumer receivables are sensitive to the reputational risks involved in the industry and are therefore being more selective with buyers in the marketplace.

We believe this favors larger participants in this market, such as us, that are better able to adapt to these pressures.

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In September 2015, we entered into a consent order (the “2015 Consent Order”) with the CFPB in which we settled allegations arising from our practices between 2011 and 2015.

On September 8, 2020, the CFPB filed a lawsuit alleging that we violated the 2015 Consent Order.

In September 2020, the CFPB filed a lawsuit alleging that we violated the 2015 Consent Order.

In the lawsuit, the CFPB alleged that we did not perfectly adhere to certain operational provisions of the 2015 Consent Order, leading to alleged violations of federal consumer financial law.

On October 15, 2020, we entered into a stipulated judgment (“Stipulated Judgment”) with the CFPB to resolve the lawsuit.

The Stipulated Judgment requires us to, among other things:

(1) continue to follow a narrow subset of the operational requirements contained in the 2015 Consent Order, all of which have long been part of our routine practices;

(2) pay a $15.0 million civil monetary penalty;

and (3) provide redress of approximately $9,000 to 14 affected consumers, which is in addition to approximately $70,000 of redress that we had previously voluntarily provided.

In connection with the Stipulated Judgment, the CFPB has formally terminated the 2015 Consent Order.

We recorded an after-tax charge of $15.0 million for the year ended December 31, 2020 as a result of the Stipulated Judgment.

In October 2020, we entered into a stipulated judgment (“Stipulated Judgment”) with the CFPB to resolve the lawsuit.

The Stipulated Judgment requires us to, among other things, continue to follow a narrow subset of the operational requirements contained in the 2015 Consent Order, all of which have long been part of our routine practices.

In connection with the Stipulated Judgment, the CFPB formally terminated the 2015 Consent Order.

Additionally, we are subject to ancillary state Attorney General investigations related to similar debt collection practices.

For example, in 2018, we also entered into settlement agreements with the Attorneys General of 42 U.S.

For example, in 2018, we entered into settlement agreements with the Attorneys General of 42 U.S.

states and the District of Columbia in connection with our debt collection and litigation practices.

On October 30, 2020, the CFPB issued final rules in the form of new Regulation F to implement the Fair Debt Collection Practices Act, which rules restate and clarify prohibitions on harassment and abuse, false or misleading representations, and unfair practices by debt collectors when collecting consumer debt.

In October 2020, the CFPB issued final rules in the form of a new Regulation F to implement the Fair Debt Collection Practices Act, which rules restate and clarify prohibitions on harassment and abuse, false or misleading representations, and unfair practices by debt collectors when collecting consumer debt.

The rules included provisions related to, among other things, the use of newer technologies (text, voicemail and email) to communicate with consumers and limits relating to telephonic communications.

On December 18, 2020, the CFPB also issued an additional debt collection final rule focused on consumer disclosures.

In December 2020, the CFPB also issued an additional debt collection final rule focused on consumer disclosures.

This final rule amends Regulation F to provide additional requirements regarding validation information and disclosures provided at the outset of debt collection communications, prohibit suits and threats of suits regarding time-barred debt, and identify actions that must be taken before a debt collector may report information about a debt to consumer reporting agencies.

The rules will each become effective on November 30, 2021.

Based on our preliminary assessment of the rules, we believe that the new rules will not have a material incremental effect on our operations.

The rules became effective on November 30, 2021.

Based on our assessment of the rules, we believe that the new rules will not have a material incremental effect on our operations.

In addition, the CFPB has issued guidance in the form of bulletins on debt collection and credit furnishing activities generally, including one that specifically addresses representations regarding credit reports and credit scores during the debt collection process, another that focuses on the application of the CFPA’s prohibition of unfair, deceptive, or abusive acts or practices on debt collection and another that discusses the risks that in-person collection of consumer debt may create in violating the FDPCA and CFPA.

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The applicable regulatory framework for privacy and cybersecurity issues is evolving and uncertain.

For example, the California Consumer Privacy Act (“CCPA”), which became effective January 1, 2020, imposes more stringent requirements on certain businesses with respect to California data privacy.

For example, the California Consumer Privacy Act (“CCPA”), which became effective January 1,

2020, imposes more stringent requirements on certain businesses with respect to California data privacy.

The CCPA includes provisions that give California residents expanded rights to access and delete certain personal information, opt out of certain personal information sharing, and receive detailed information about how certain personal information is used.

Compliance with any new or developing privacy laws in the United States, including any state or federal laws, may require significant resources and subject us to a variety of regulatory and private sanctions.

Our activities are also subject to federal and state laws concerning the use of automated dialing equipment, and other laws related to consumers and consumer protection.

In response to petitions filed by third parties, in July 2015, the Federal Communications Commission (“FCC”) released a declaratory ruling interpreting the TCPA, which could impact the way consumers may be contacted on their cellular phones and could impact our operations and financial results.

The FCC is currently engaged in further rulemaking regarding the definition of an automatic telephone dialing system under the TCPA.

In addition to the federal statutes detailed above, many states have general consumer protection statutes, laws, regulations, or court rules that apply to debt purchasing and collection.

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In addition, failure to comply with state licensing and compliance requirements could restrict our ability to collect in regions, subject us to increased regulation, increase our costs, or adversely affect our ability to collect our receivables.

State laws, among other things, also may limit the interest rate and the fees that a credit originator may impose on our consumers, limit the time in which we may file legal actions to enforce consumer accounts, and require specific account information for certain collection activities.

State laws, among other things, also may limit the interest rate and the fees that apply to our consumers’ accounts, limit the time in which we may file legal actions to enforce those accounts, and require specific account information for certain collection activities.

By way of example, the California Fair Debt Buying Practices Act that directly applies to debt buyers, applies to accounts sold after January 1, 2014.

The law requires debt buyers operating in the state to have in their possession specific account information before debt collection efforts can begin, among other requirements.

Moreover, the New York State Department of Financial Services issued new debt collection regulations, which took effect in September 2015 and established new requirements for collecting debt in the state.

The law requires, among other things, debt buyers operating in California to have in their possession specific account information before debt collection efforts can begin.

Moreover, the New York State Department of Financial Services issued debt collection regulations, which took effect in September 2015, that established requirements for collecting debt in the state.

In addition, other state and local requirements and court rulings in various jurisdictions may also affect our ability to collect.

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These laws and regulations, and others similar to the ones listed above, as well as laws applicable to specific types of debt, impose requirements or restrictions on collection methods or our ability to enforce and recover certain of our receivables.

Effects of the law, including those described above, and any new or changed laws, rules, or regulations, and reinterpretation of

the same, may adversely affect our ability to recover amounts owing with respect to our receivables or the sale of receivables by creditors and resellers.

Effects of the law, including those described above, and any new or changed laws, rules, or regulations, and reinterpretation of the same, may adversely affect our ability to recover amounts owing with respect to our receivables or the sale of receivables by creditors and resellers.

Cabot (Europe)

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Cabot has three regulated entities in the UK:

the debt purchase brand Cabot Credit Management Group Limited (“CCMG”) , the servicing brand Wescot and its law firm, Mortimer Clarke Solicitors (“ Mortimer Clarke ”).

the debt purchase brand Cabot Credit Management Group Limited (“CCMG”) , the servicing brand Wescot Credit Services Limited (“Wescot”) and Cabot’s law firm, Mortimer Clarke Solicitors Limited (“ Mortimer Clarke ”).

The FCA regards debt collection as a “high risk” activity primarily due to the potential impact that poor practice can have on already vulnerable consumers and as a result maintains a high focus on the sector.

The FCA Handbook sets out the FCA rules and other provis ions.

Firms wishing to carry on regulated consumer credit activities must comply with all applicable sections of the FCA Handbook, including “Treating Customers Fairly” principles, as well as the applicable consumer credit laws and regulations.

Firms wishing to carry on regulated consumer credit activities must comply with all applicable sections of the FCA Handbook, including “Treating Customers Fairly” principles, as well as

the applicable consumer credit laws and regulations.

The FCA also publishes guidance on various topics from time to time that it expects firms to comply with.

In the context of the COVID-19 pandemic, the FCA has made it clear by way of its guidance to consumer credit and debt management firms that it expects such firms to adjust policies and lending and collection practices as necessary to accommodate customers that may be experiencing financial difficulties as a result of the COVID-19 pandemic.

The FCA has applied its rules to consumer credit firms in a number of areas, including its high-level principles and conduct of business standards.

The FCA has significant powers and , as the FCA deepens its understanding of the industry through continued supervision , it is likely that the regulatory requirements applicabl e to the debt purchase industry will continue to increase.

In the context of the COVID-19 pandemic, the FCA has made it clear by way of its guidance to consumer credit and debt management firms that it expects such firms to adjust policies and lending and collection practices as necessary to accommodate customers that continue to experience financial difficulties as a result of the COVID-19 pandemic.

The FCA has app lied its rules to consumer credit firms in a number of areas, including its high-level principles and conduct of business standards.

In December 2021 the FCA published the Consumer Duty, which aims to provide a higher level of consumer protection in retail financial markets and combines existing consumer treatment requirements with enhanced standards.

It is expected that the FCA will establish the final rules of the new Consumer Duty in July 2022.

In addition, it is likely that the compliance framework that will be needed to continue to satisfy the FCA requirements will demand continued investment and resources in our compliance governance framework.

One particularly significant regulatory change program was the implementation of the Senior Managers and Certification Regime (“SMCR”) for UK operations in December 2019.

These requirements are designed to drive accountability and risk ownership within businesses.

This directly impacted CCMG’s senior management team and the wider requirements, which are required to be fully implemented by March 31, 2021, affect the majority of colleagues who need to be aware and adhere to the required standards of conduct.

The Senior Managers and Certification Regime (“SMCR”), designed to drive accountability and risk ownership within businesses, came into effect for UK operations in December 2019, and affected the majority of colleagues who need to be aware and adhere to the required standards of conduct.

Companies authorized by the FCA must be able to demonstrate that they meet the threshold conditions for authorization and comply on an ongoing basis with the FCA’s high level standards for authorized firms, such as its Principles for Business (including the principle of ‘‘treating customers fairly’’), and rules and guidance on systems and controls.

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A failure to comply with these requirements can make agreements unenforceable or can result in a requirement that charged and collected interest be repaid.

The FCA undertook a review of the provisions of the UK Consumer Credit Act and published its Final Report in March 2019 which set out its views on whether the repeal of certain UK Consumer Credit Act provisions would adversely affect the appropriate degree of protection for consumers.

The UK Government is now tasked with deciding whether to implement any of the FCA’s recommendations.

The FCA continue to review the provisions of the UK Consumer Credit Act and having up to this point prioritized changes linked to Brexit are now working with the UK Government to focus on terms that have been identified as requiring the most urgent updates.

Data protection.

In addition to these regulations on debt collection and debt purchase activities, Cabot must comply with the General Data Protection Regulation 2016/679 (“GDPR”).

In addition to these regulations on debt collection and debt purchase activities, Cabot must comply with the General Data Protection Regulation 2016/679 (“GDPR”) and where applicable the UK Data Protection Act 2018.

This substantially replaced the previous legislation (Data Protection Act of 1998) and introduced significant changes to the data protection regime including but not limited to:

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and new supervisory authorities, including a European Data Protection Board (“EDPB”).

The GDPR was further enhanced in the UK

through new UK specific legislation in the form of an updated UK Data Protection Act 2018.

Cabot made required changes in its UK operations across its debt purchasing and servicing businesses to meet the requirements of GDPR.

Data Protection Officer(s) have been appointed and are supported by Privacy Champions at each European/UK site to promote and enforce good data protection practices.

Data Protection Officer(s) have been appointed for the UK, Spain and Ireland who are supported by Privacy Champions at each European/UK site to promote and enforce good data protection practices.

The regulatory regime in Ireland has been subject to significant changes in recent years.

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Cabot Financial (Ireland) Limited was already obligated to ensure compliance with these codes through its contractual agreements to service loans on behalf of various Irish financial institutions and is audited on a regular basis against such obligations.

The Central Bank of Ireland also maintains a register of key senior managers and has powers to act where individuals fail to meet the required standards of conduct.

These powers are due to be further strengthened with the introduction of an enhanced regime in 2022 (SEARs – Senior Executive

Accountability Regime), this is expected to align to the UK SMCR and widen accountability and the nature of action that can be taken where the required standards are not achieved.

In June 2016, the United Kingdom held a referendum in which voters approved the United Kingdom’s withdrawal from the European Union, commonly referred to as “Brexit.” The United Kingdom formally exited the European Union on January 31, 2020 although an agreement was not reached until the end of the allocated transition period in December 2020.

Even though an agreement has been reached there remains a significant lack of clarity over the terms of the United Kingdom’s future relationship with the European Union in certain key areas not least Financial Services where a temporary additional transition period has been assigned while negotiations continue.

The full impact of Brexit has yet to be felt and could, among other outcomes, disrupt the free movement of goods, services and people between the United Kingdom and the European Union, undermine bilateral cooperation in key policy areas and significantly disrupt trade between the United Kingdom and the European Union.

In addition, the other markets in which we currently operate (including Spain, Italy, Poland and Portugal) are subject to local laws and regulations, and we continue to review the required risk and compliance programs to facilitate compliance with applicable laws and regulations in those markets.

Even though an agreement has been reached there remains a significant lack of clarity over the terms of the United Kingdom’s future relationship with the European Union in certain key areas including Financial Services, where a temporary additional transition period has been assigned while negotiations continue.

The full impact of Brexit is still emerging and could, among other outcomes, disrupt the free movement of goods, services and people between the United Kingdom and the European Union, undermine bilateral cooperation in key policy areas and significantly disrupt trade between the United Kingdom and the European Union.

In October 2021 the Non Performing Loan Directive (“NPL Directive”) was approved by the European Council with the implementation period commencing in December 2021.

The purpose of the NPL Directive is to help develop an efficient, transparent and consistent secondary loan marketplace across Europe.

The NPL Directive does not impact the UK based business and the full impact of the legislation on our business in Europe will be assessed over the coming months and will depend on current local regulatory regimes and the extent that the legislation is adopted by local governments.

Implementation of the NPL Directive is required by December 31, 2023.

In addition, the other markets in which we currently operate (including Spain, France, Italy and Portugal) are subject to local laws and regulations, and we continue to review the required risk and compliance programs to facilitate compliance with applicable laws and regulations in those markets.

Our operations outside the United States are subject to the U.S.

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We value diverse viewpoints and inclusive experiences and strive for balanced representation in our overall organization.

We foster a culture of respect and inclusion in various ways, including offering unconscious bias and diversity training, tracking gender diversity, and celebrating

diversity through global cultural appreciation initiatives.

We foster a culture of respect and inclusion in various ways, including offering unconscious bias and diversity training, tracking gender diversity, and celebrating diversity through global cultural appreciation initiatives.

As of December 31, 2021, approximately 46% of our total workforce were women.

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In response to the global COVID-19 pandemic, we implemented programs and services that we determined were in the best interest of our employees, their families, our consumers and business partners, as well as the communities in which we operate.

These include continued work-from-home arrangements for a majority of our employees, reimbursement of certain home office related expenses, enhanced information technology (IT) support, backup childcare, enhanced medical insurance coverage, activities and programs supporting mental health, and regular communications and updates to employees.

These include continued work-from-home arrangements for a majority of our eligible employees, reimbursement of certain home office related expenses, enhanced information technology (IT) support, backup childcare, enhanced medical insurance coverage, activities and programs supporting mental health, and regular communications and updates to employees.

Growth and Development

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business