Essential Notices and Publications on Debt Collection from the Consumer Financial Protection Bureau
The Consumer Financial Protection Bureau (CFPB) is now the lead regulator of the ARM industry in the U.S. With expanded power from Congress, the CFPB is the first regulator to be given direct supervisory authority over collection agencies and debt buyers, including onsite examinations and business audits for larger companies. Regardless of size, every ARM firm will have to respond to and resolve each consumer complaint against it the CFPB receives.
The new regulatory dynamic was implemented fairly quickly and is now in full swing. Below are resources for ARM companies of all sizes. Please note that we update these documents regularly. If you have anything to suggest we add, please email editor@insideARM.com.
Essentials for Larger Collection Agencies
($10 million+ in revenue)
Final Rule Defining Larger Participants of the Consumer Debt Collection Market (effective Jan. 2, 2013)
Essentials for All Collection Agencies
Register your company with CFPB complaints system, Consumer Response (Required for ALL ARM companies)
Consumer Response Complaints Database (now includes debt collection complaints)
CFPB Bulletin on Unfair, Deceptive, or Abusive Debt Collection Practices (issued July 10, 2013)
Bulletin on Representations Regarding Effect of Debt Payments on Credit Reports and Scores (issued July 10, 2013)
Other Important Debt Collection Documents from the CFPB
On November 6, 2013 the CFPB took the first step toward considering consumer protection rules for the debt collection market. Through its Advance Notice of Proposed Rulemaking (ANPR), the Bureau is collecting information on a wide array of issues, including the accuracy of information used by debt collectors, how to ensure consumers know their rights, and the communication tactics collectors employ to recover debts. The 114 page document contains 162 questions about debt collection practices and the consumer experience.
The comment period ended February 28, 2014. In the coming months, the CFPB will be reading the comments and making specific rule proposals for debt collection. For a high-level look into the comments from prominent industry and consumer groups, consider attending insideARM’s webinar Assessing the Impact of CFPB Rules on Debt Collectors.
Issued on March 20, 2013, this is the latest of the annual FDCPA reports required by Congress. The report details enforcement actions, debt collection complaints, eduction and outreach, and supervision of collection agencies.
Published in November 2013, this is the most recent annual report from the Office of the CFPB’s Ombudsman, an impartial advocate for a fair process between consumers, financial institutions, and the CFPB. The Ombudsman’s recommendations carry a lot of weight and the CFPB respects the suggestions made in the report.
On July 10, 2013, the CFPB published five action letters that consumers can consider using when corresponding with debt collectors.
- Needs more information on the debt: The first letter is for consumers who need more information about a debt the collector has told them that they owe. This letter may be useful, for example, for a consumer who may not immediately recognize the debt as their own or for those who want to find out more about the debt before they pay it. View “more information” letter.
- Wants to dispute the debt and for the debt collector to prove responsibility or stop communication: This letter tells the collector that the consumer is disputing the debt and instructs the debt collector to stop contacting the consumer until they provide evidence that the consumer is responsible for that debt. View “dispute and proof” letter.
- Wants to restrict how and when a debt collector can contact them: The FDCPA prohibits debt collectors from contacting a consumer about a debt at a time or place they should know is inconvenient. With this letter, the consumer is able to tell the debt collector how they would like to be contacted. View the “contact restriction” letter.
- Has hired a lawyer: If a consumer has hired a lawyer, generally, the debt collector should be contacting the lawyer instead of the consumer. This letter template provides a way for the consumer to give the debt collector the lawyer’s information and instruct the collector to contact only the lawyer. View the “hired a lawyer” letter.
- Wants the debt collector to stop any and all contact: Consumers have the right to tell a debt collector to stop all communication. It is important, however, to note that stopping contact from a debt collector does not cancel the debt or prohibit the collector from potentially pursuing other remedies, such as filing a lawsuit. View the “stop contact” letter.
The Bulletin, issued on September 4, 2013, specifically addresses furnishers’ obligations to “review all relevant information” they receive in connection with disputes forwarded by CRAs. Collection agencies are considered to be furnishers.
The chart names the heads of divisions within the CFPB and gives an idea of how the agency is structured (current as of October 1, 2013)
Articulates the mission, vision, goals, and strategies for the CFPB and the steps leaders plan to take to achieve them. The CFPB’s current version of its strategic plan was written, endorsed, and published in April 2013.
Database of Q&A provided by the CFPB to consumers on hundreds of consumer finance topics. Approximately 70 questions are related to Debt Collection. If you get tired of clicking through to each individual question, you can download a nicely compiled and organized PDF here (for a modest fee of $49)
Compliance with the CFPB is increasingly becoming a technology acquisition exercise. Myriad solutions exist to help ARM track their operational exposure. Learn how one collection agency used voice analytics to decrease consumer complaints by 63% and how another collection agency uses the same technology to immediately detect compliance issues on the collector level.
insideARM.com Coverage of the CFPB
- Joint CFPB-FTC Brief: Collecting on Time-Barred Debt Can Violate FDCPA
- Top 4 Compliance Areas Debt Collectors Must Master Before a CFPB Audit
- FTC Letter Reveals Increased FDCPA and Debt Collection Enforcement
- The Growing Voice of the Customer: The CFPB Complaints Database
- FTC Reports 200,000 Debt Collection Complaints in 2013; CFPB Says 22,000
- Happy National Consumer Protection Week!
- Consumer Relations Consortium Submits Comments on the CFPB’s ANPR for Debt Collection After Meeting with Consumer Groups
- House Passes Bill Limiting CFPB Powers as it Prepares to Write Debt Collection Rules
- CFPB Director Discusses Debt Collection Regulation in Speech to State AGs
- Anticipating a New Regulatory Regime For Debt Collection – Part 2
- Mortgage Lender Self-Reports Violation to CFPB; Small Penalty Follows
- The Changing Landscape of Supplier Audits
- Anticipating a New Regulatory Regime For Debt Collection
- Senate Bill Protecting Consumer Data Ripples Out to Debt Collection
- A Conversation with the CFPB