First off, let me tip my hat to John Bedard, one of the most respected and revered members of the credit and collection industry, for the job he did yesterday testifying before the House Financial Services Committee, standing up and representing the industry with poise and prose. He didn’t back down when challenged and he articulated the issues facing the industry in a way that all committee members could understand.
But, beyond that, the one question I had watching yesterday’s hearing, which was supposed to focus on “Examining Legislation to Protect Consumers and Small Business Owners from Abusive Debt Collection Practices,” but instead became a debate about the proposed debt collection rule from the Consumer Financial Protection Bureau, was: Where was the CFPB? Were they called to testify? If not, why not?
Ok, I guess that’s three questions.
But, in all seriousness, why was the CFPB not represented yesterday? Democrats probably would have jumped at the opportunity to attack the CFPB’s new regime and its proposed rule, especially with a group of consumer advocates on the panel who spent hours expressing their concerns.
Outside of the proposed rule, there were questions about the CFPB’s complaint database, the concept of regulation by enforcement, and how to stop the bad apples from ruining everything. To me, those are all questions that someone from the CFPB could have addressed better than a commissioner from the Federal Trade Commission. Rohit Chopra did a good job testifying, and he clearly knows the ins and outs of the collection industry, but if one government agency was going to be represented, it should have been the CFPB, not the FTC.
It remains to be seen what will come from yesterday’s hearing. There are a number of bills that either have been introduced or been announced that focus on different aspects of debt collection, but they received little attention yesterday.
Outnumbered four to two on the panel, Bedard and Sarah Auchterlonie did commendable jobs communicating why the industry needs updated rules and how difficult it is to operate while trying to comply with a law that is more than 40 years old. When asked to provide clarity about why the CFPB’s proposed rule is important, Bedard said, it “creates rules of the road. It addresses how consumers can communicate with collectors using electronic methods that satisfies all of us that consumers will be treated fairly. That wasn’t there under the FDCPA.”
