Debt collection on CFPB's radar
AML AND COMPLIANCE NEWS |
The Consumer Financial Protection Bureau's (CFPB's) Director, Richard Cordray, announced a regulatory initiative on debt collection practices during a field hearing held in Portland, Maine, on July 10. His comments were pointed at debt holders and third-party collectors alike. Cordray said it was the CFPB's intention to begin rule-making on debt collection by banks and other regulated entities, and that the CFPB has begun collecting complaints about debt collection through its database.
The same day, the CFPB issued two bulletins noting concerns regarding debt collection. One bulletin focuses on unfair, deceptive or abusive acts or practices, and the other bulletin focuses on deceptive statements made to consumers regarding the impact of payments on credit and the effects of outstanding debt on a consumer's creditworthiness, credit score or credit report. The CFPB also released five sample "action letters" or templates for consumers to use when corresponding with debt collectors. These templates can be found in the CFPB's blog post on new ways to combat harmful debt collection practices.