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CFPB MAKES MAJOR CHANGE TO DEBT COLLECTION RULEMAKING
- For those of you who were on Mars yesterday and have not heard yet, Richard Cordray, the director of the Consumer Financial Protection Bureau, announced that the agency had decided to abandon its plan of first enacting a rule for third-party debt collectors and then moving forward with a rule for first-party creditors, and will instead combine the two groups into one rule. That combined rule will likely cover what is known as “right consumer, right debt,” by introducing verification and validation standards. Those standards had been part of a proposal issued last year by the CFPB for third-party collectors only. Along with the “right consumer, right debt” rule for first- and third-party collectors, the CFPB will also move forward with a rule related to disclosures that must be made to individuals by third-party collectors.
CFPB ANNOUNCES PLAN TO SURVEY CONSUMERS ABOUT DEBT COLLECTION DISCLOSURES
- Meanwhile, the CFPB has also announced plans to conduct a survey of 8,000 individuals related to the disclosure requirements it would like to include in its proposed rule. The CFPB is soliciting comments on its proposal. According to the CFPB: The survey will explore consumer comprehension and decision making in response to debt collection disclosure forms.
HOUSE PASSES FINANCIAL CHOICE ACT
- The House of Representatives yesterday approved the Financial CHOICE Act, which would dramatically overhaul the Dodd-Frank Wall Street Reform and Consumer Protection Act and significantly reduce the powers and authority of the Consumer Financial Protection Bureau. The bill now moves to the Senate for approval. If passed in the Senate, it would go to the President for his signature or veto.
THE ECONOMIST ENDORSES THIRD-PARTY COLLECTIONS
- Tapping into a recent study that argued regulations that restrict debt collection activity actually reduce the amount of available credit, The Economist makes a case for the industry, saying: Without the deterrent effect of third-party collectors, consumers are likely to assume more risk and to overborrow. But the article also mentions that it will take more than a research paper to improve the image that the general population has of the industry.
WORTH NOTING: The he-said, he-said battle between President Trump and former FBI Director James Comey … The most tweeted moments from Comey’s testimony yesterday before the Senate Intelligence Committee … An expert on food poisoning list the six things he never eats … Why business owners love President Trump, but won’t create the jobs he wants … The owner of Saks Fifth Avenue and Lord & Taylor is cutting 2,000 jobs across North America … Verizon plans to lay off 2,100 workers now that it’s acquisition of Yahoo! is completed … The net worth of Americans is up to $94.8 trillion thanks to gains in the stock market … How CEOs, including Steve Jobs and Tim Cook, respond to customer complaint emails … Why negativity ruins more good ideas than anything else.
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