A speech on Thursday from the Enforcement Director at the Consumer Financial Protection Bureau had a “good news, bad news” kind of vibe for the debt collection industry. The bad news is that the Bureau is bolstering its enforcement department by hiring 75 more employees to go after the bad actors. The good news is that it doesn’t appear that the collection industry is on the enforcement department’s radar, based on the three areas of consumer risk cited by Eric Halperin in his speech.
Not So Fast: Halperin did note that one of the three areas of risk is “predatory lending and abusiveness” saying these topics are “at the heart of what the Bureau does.” Halperin included some recent examples of the steps that the Bureau has taken to root out instances of predatory lending and abusive behavior of consumers, including what it did with Heights Finance. While many of the actions the Bureau has taken against companies in the collection realm over the years have involved accusations of abusive behavior toward consumers, none of Halperin’s remarks appeared to look in the industry’s direction.
What to Look For: Halperin said the objective of the Bureau, and its enforcement unit, is to create a level playing field that allows consumers to “have the leverage and ability to exercise their own agency in the market.” The CFPB will accomplish that by continuing to look at:
- The surveillance economy, which includes credit reporting and data brokers.
- Algorithms and automated decision making.
- Predatory lending and abusiveness
What He Said: “While I am proud of what we’ve accomplished, I want to emphasize: we have much more to do. Consumer debt burdens are historically high, and they are rising. High interest rates strain the balance sheets of families across the country, making it harder to buy a car or a home or take out a line of credit. And at the same time, the consumer economy continues to get more complex and less transparent every day.”
