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 general public is encouraged to review the notice and comment on it. A comment period will stay open for 90 days, through around early February 2014. To comment, visit RegulationRoom.org or Regulations.gov.
For guidance on how to respond and formulate a formal comment, download insideARM’s CFPB November Rulemaking Webinar
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)
insideARM.com Coverage of the CFPB
- Asset Classes Attracting the Most Consumer Complaints
- POLL: Preparing for Compliance Costs in 2014
- CFPB Report Shows Need to Clarify Examination Process
- CFPB to Lay Off TCPA, Focus on Fair Play
- Federal Financial Regulator to Oversee Student Loan Servicers
- CFPB Recognizes Cost Burden of Compliance for Small Banks
- Collectors Are Largely Chasing the Wrong Person, According to Complaints Data
- ARM Companies Show Differing Strategies in Debt Collection Complaint Responses
- In Search of a Unified Front on Capitol Hill
- PSA: Don’t Shred Consumer Files
- Debt Collection Practices Lead to $19 million CFPB Action Against Payday Lender
- Consumer Relations Consortium Prepares to Respond to CFPB’s Rulemaking Notice
- ACA International Releases White Paper Analyzing CFPB Consumer Complaints
- insideARM.com Launches Comprehensive CFPB Resources Page for ARM Industry
- Changes to the FDCPA That Will Redefine Debt Collection
From the CFPB's Blog
- Fall 2013 rulemaking agenda
- How much money is spent on advertising financial products?
- The second annual report from the CFPB Ombudsman’s Office
- Save the date, Dallas, Texas!
- Tell us how you tackle your student debt
- Know Before You Owe: Just one example of our approach to policy-making
- Know Before You Owe: preparing to finalize the new mortgage disclosure forms
- We looked at the impact of regulations at financial institutions
- Explainer: How the final TILA-RESPA rule differs from the proposal
- A final rule that makes mortgage disclosure better for consumers
- Our first enforcement action against a payday lender
- Explainer: How does the Chase order handle refunds?
- Live from Portland, Maine!
- New ways to combat harmful debt collection practices
- Order: Auto loan program partners to refund about $6.5 million to servicemembers