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CFPB Considering Collection Protections That Could Include FIs
WASHINGTON (11/7/13)--The Consumer Financial Protection Bureau has asked the public for help as it considers developing consumer protection rules for the debt collection market.

The Credit Union National Association has been weighing in with the CFPB to minimize the direct or indirect impact on credit unions or credit union service organizations of any rules or guidance that the agency develops and we will continue to urge the agency to focus on problem cases rather than create broad new rules that affect good and bad actors, CUNA Deputy General Counsel Mary Dunn said.

In an Advance Notice of Proposed Rulemaking (ANPR) released Wednesday, the bureau asked for data on:
  • The accuracy of information used by debt collectors;
  • How to ensure consumers know their rights; and
  • The communication tactics collectors employ to recover debts.
"Collection of consumer debts serves an important role in the proper functioning of consumer credit markets. But certain debt collection practices have long been a source of frustration for many consumers, generating a heavy volume of consumer complaints at all levels of government--including at the Consumer Bureau," CFPB Director Richard Cordray said. "Today's action will allow us to hear from the public as we consider what rules are needed…We want to ensure that all players in the industry are working with correct information, that consumers are fully informed, and that consumers are treated fairly and with dignity," he added.

The ANPR will be published soon in the Federal Register, and the bureau will accept comments for 90 days.

The bureau in a release said it has not decided whether it will release regulations to address debt collection issues. However, it said it has the authority to craft regulations under The Fair Debt Collection Practices Act and the Dodd-Frank Act. Dodd-Frank gives the CFPB the authority to issue regulations concerning unfair, deceptive, and abusive acts or practices and to establish disclosures to assist consumers in understanding the costs, benefits, and risks associated with consumer financial products and services, the CFPB said.

The bureau is looking at all debt collection practices, even by creditors for their own loans, Dunn said.

Credit unions that collect their own debts have never been subject to the Fair Debt Collection Practices Act, CUNA Senior Vice President for Compliance Kathy Thompson explained Wednesday. However, she said, credit unions that collect debts for others--and credit union service organizations that offer debt collection services--are subject to the FDCPA. And, she noted, the FDCPA does not have any implementing regulations.

"If the CFPB decides to apply any debt collection restrictions directly to credit unions, it would have to do so either by having Congress amend the FDCPA or act through its authority to regulate unfair, deceptive or abusive practices," Thompson clarified.

The CFPB started collecting consumer debt collection complaints earlier this year, and the bureau said companies have responded to more than 5,000 debt collection complaints that were forwarded on to them by the CFPB. These consumer complaints will be added to the CFPB's public Consumer Complaint Database.

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