Trying to “overturn or rewrite Trump-era rules around debt collection” will be a focus area for the Consumer Financial Protection Bureau, according to a published report, which cited comments from a pair of consumer advocates as evidence. The comments were part of a broader report aimed at spotlighting the priority focus areas for the CFPB under President Joe Biden that was published over the weekend.
Debt collection was the second category listed in the report, after responding to the COVID-19 crisis, and ahead of student loans, credit reporting, overdraft fees, payday loans, mandatory arbitration, and racial equity.
The debt collection rule, which was issued in two parts in October and December “were not rules for consumers,” said one consumer advocate, Rachel Gittleman, the financial services manager for the Consumer Federation of America. As well, the rule did not prohibit the collection of “zombie debt,” according to the article, referring to debt where the statute of limitations has expired. Consumer advocates, including the National Consumer Law Center, which is referred to in the report, think there should be an outright ban on collecting that type of debt.
Citing how the provisions of the rule are less-consumer friendly and more appealing to companies, the report says that debt collectors would be allowed “to hound” consumers by calling them once a day per debt, while there are no limits on text messages or social media messages that could be sent.
The report also quotes advocates calling for greater enforcement of student loan servicing and collections and advocates saying credit reporting agencies should be pressured to respond quicker to consumer disputes.
“There’s a lot that needs to get done,” said former CFPB Director Richard Cordray in the report.
