In prepared remarks today before a meeting of the Consumer Financial Protection Bureau‘s Consumer Advisory Board, agency Director Richard Cordray addressed efforts by those under his command to regulate the collections industry.
While not necessarily breaking any new ground or making any new revelations, Cordray’s remarks reinforced the CFPB’s interests in pushing forward with a debt collection rule that will further protect consumers, while also providing further clarifications to collectors.
“Debt can overwhelm people and leave them feeling helpless and powerless as they try to fend off harassing debt collectors,” Cordray said. “By cleaning up the integrity of this process, we can resolve many issues before they become problems.”
Cordray gave a brief summary of the CFPB’s recently issued proposals that are expected to form the foundation of a forthcoming rule proposal. Cordray also made sure to highlight the number of collection-related complaints received by the Bureau and how the CFPB is seeking to “overhaul the entire process from the moment third-party collectors first receive their debt portfolios to their very last efforts to collect.” At no point in his remarks today, did Cordray mention first-party collectors or give any reference to what is being done to regulate collections at the creditor level.
Cordray said that the CFPB would continue to “seek counsel from consumer groups, the public, industry, and other stakeholders as we proceed with the rulemaking process.”
In summarizing the CFPB’s proposals, Cordray said:
Under our proposal, debt collectors would need to have more reliable information about the debt before they can collect. They would have to limit their attempts to make contact, clearly disclose details about the debt, and make it easier to dispute the debt. When responding to disputes, they would not be able to pursue collection without sufficient evidence. These conditions and restrictions would apply as well if the debt is sold or transferred. Our goal is to bring more accuracy and accountability to a market that desperately needs it.
In his remarks, Cordray also spoke about the student loan servicing initiatives being undertaken by the CFPB.
