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 issuing new consumer protection rules for the debt collection market. Through its Advance Notice of Proposed Rulemaking (ANPR), the Bureau collected information on a wide array of issues. The 114 page document contains 162 questions about debt collection practices and the consumer experience. The comment period ended February 28, 2014. The the debt collection rulemaking schedule has since been updated twice, with the process now expected to extend into 2016.
For a high-level look into the comments from prominent industry and consumer groups, consider insideARM’s report Assessing the Impact of CFPB Rules on Debt Collectors.
The Monthly Complaint Report uses a three-month rolling average, comparing the current average to the same period in the prior year where appropriate, to account for monthly and seasonal fluctuations. In some cases, we use month-to-month comparisons to highlight more immediate trends. For the company-level complaint data, we use a three-month rolling average of complaints sent to companies for response. This company-level complaint data lags other complaint data in this report by two months to reflect the 60 days companies have to respond to complaints, confirming a commercial relationship with the consumer. This is consistent with complaints found in the public Consumer Complaint Database.
This ninth edition of Supervisory Highlights shows that the Bureau found violations in student loan servicing, mortgage origination and servicing, consumer reporting, and debt collection. The report also shows that CFPB supervisory actions during the prior quarter resulted in $107 million in relief to more than 238,000 consumers.
Issued in March 2015, 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.
Issued on March 20, 2014, this report details enforcement actions, debt collection complaints, education and outreach, and supervision of collection agencies.
Issued on May 28, 2014, this is one of the twice-yearly reports required by Congress that details all of the CFPB’s activities across the various industries it regulates. The report details research, supervision, enforcement actions, and rulemaking.
Published in November 2014, 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.
Part of an occasional series of publications from the CFPB’s Office of Research, this May 2014 report examines the impact on consumer credit scores of medical debt tradelines placed primarily by third party debt collection agencies.
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: This letter may be useful 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: 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: 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 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 November 19, 2014)
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)
insideARM.com Coverage of the CFPB
- 05/04/2016 – CFPB Publishes Proposed Arbitration Rule; Coins a New Phrase
- 04/29/2016 – Debt Collection Litigation in the Cross Hairs: CFPB’s Consent Order Against New Jersey Law Firm Creates More Problems Than Solutions
- 04/28/2016 – White House, ED, and CFPB Announce Major Student Loan Initiative But Don’t Address Post-Default Issues
- 04/27/2016 – Former CFPB Senior Advisor: Debt Collection Industry Must Press CFPB to Put Complaint Data in Context
- 04/26/2016 – Pressler and Pressler Offers Response to CFPB Settlement Agreement
- 04/26/2016 – CFPB Announces Consent Orders Against Law Firm and Debt Buyer
- 04/26/2016 – Federal Court: CFPB Overstepped Jurisdiction in Issuing CID to For-Profit Colleges Accreditor
- 04/20/2016 – Online Lenders’ Use of ACH Can Lead to Cascading Fees, Account Closures for Consumers, CFPB Report Finds
- 04/19/2016 – CFPB’s Constitutionality and Director’s Interpretation Challenged
- 04/13/2016 – Appeals Court Offers Sympathetic Ear to Argument that CFPB Structure is Unconstitutional
- 04/13/2016 – Executive Changes: CFPB Announces Multiple Senior Leaders
- 04/11/2016 – Increased Regulations Spawn New Trade Associations
- 04/06/2016 – Encore Capital Group Wins Motion to Compel Arbitration in Putative FDCPA Class Action
- 04/06/2016 – Witnesses Tell Senate Banking Committee That CFPB Has Hurt Consumers
- 04/01/2016 – NBC Debt Collection Article Includes Some Context, But Could Be Better
From the CFPB's Blog
- 05/05/2016 – CFPB proposes prohibiting mandatory arbitration clauses that deny groups of consumers their day in court
- 05/04/2016 – Live from Albuquerque!
- 05/02/2016 – Usted tiene derecho a que lo traten de manera justa en el mercado financiero
- 04/29/2016 – You have the right to be treated fairly in the financial marketplace
- 04/29/2016 – Your Money, Your Goals expands its reach
- 04/28/2016 – Protecting one’s credit while in the criminal justice system
- 04/22/2016 – Our new site upgrades help you find what you need, faster
- 04/20/2016 – New research shows online payday loan borrowers rack up steep fees
- 04/20/2016 – Save the date, Albuquerque!
- 04/14/2016 – Mortgage Moves: How many loan offers will you get?