ARM Firms to Get New Regulator Under Treasury Proposal Issued this Week
The Obama administration made it official yesterday in releasing a proposal for a new consumer protection agency: the ARM industry will be included in the reforms. And it's not just the FDCPA; FCRA and Gramm-Leach-Bliley are included.
Calls to transfer the administration of the Fair Debt Collections Practices Act (FDCPA) to another federal regulator intensified this week when the Obama administration, through the U.S. Treasury Department, on Tuesday unveiled its plan to create an independent consumer protection agency.
The Consumer Financial Protection Agency Act of 2009 would give the new agency the authority to oversee all consumer protection laws and write new rules to protect consumers against deceptive and unfair practices. The act specifically defines the FDCPA as an existing law that would fall under the purview of the new agency. Furthermore, it proposes to amend the FDCPA to replace current regulator the Federal Trade Commission with the new agency in most language.
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The proposal confirms speculation last week that the debt collection law would fall under the authority of the new agency ("Proposed Consumer Financial Protection Agency May Oversee FDCPA Enforcement," June 25).
"This agency will have only one mission – to protect consumers – and have the authority and accountability to make sure that consumer-protection regulations are written fairly and enforced vigorous,” Treasury Secretary Timothy Geithner said when he unveiled the legislation.
Sen. Christopher Dodd, chairman of the Senate Committee on Banking, Housing, and Urban Affairs, immediately praised the legislation saying, “the Administration is addressing the colossal failures that led to the economic crisis with a bold and aggressive plan. Creating an independent agency whose sole focus is protecting consumers - be it credit card holders, anyone with a bank account, or families with mortgages or student loans – is really the key to creating the foundations for a stronger economy.”
The Federal Trade Commission (FTC), however, which currently regulates FDCPA, doesn’t appear ready to relinquish oversight of the debt collection law. In a report last February, the commission requested that Congress to give it the authority to make and implement FDCPA rules.
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Comments
Comment from Former Bostonian on July 1, 2009 at 11:51AM EST
The basis for all the legislation seems to be a conclusion that all debt collectors are evil and the debtors' problems and ultimately the entire economic situation was created by debt collectors. Nowhere does it ever mention debtor collectors only ask people to do what they already promised to do. We would not be needed if people took responsibility for what they agreed to do. Might as well print up the tee shirts that say "Debtors Rule!"
Comment from Anonymous on July 1, 2009 at 12:15PM EST
As long as consumers aren't "abducated" from making their payments!!!
Taxes, bureaucracy, and socialization... We're getting what we asked/voted for...
Comment from Not too concerned on July 1, 2009 at 12:15PM EST
Any agency who is licensed nationally and has been victimized by the so called consumer advocate attorneys just looks at this as yet another abuser who at least isn't reaching their hands into our pockets.
Comment from DONALD DALY on July 1, 2009 at 12:16PM EST
More goverment, just what we need. This tift will likely end up just like the NYS Senate, divided and fighting to see who's in charge instead of simply enforcing existing laws and leaving things that are nopt broken alone. It appears to me this administration is looking for "buzy work" to do instead of resolving the real problems, but then again this will help to improve employment by putting another layer of government workers on the payroll.
Comment from Anonymous on July 1, 2009 at 12:44PM EST
Just more anti-business legislation from the Abamanation.If he could force his cabinet members to pay their tax bills we'd be in much better fiscal shape!
Comment from Anonymous on July 1, 2009 at 1:55PM EST
Another step toward markism. If we do not stop this madness in 2010 it will be too late. It may even be too late now.
Comment from An Aletrnate Solution on July 1, 2009 at 1:58PM EST
Another agency to protect the consumer from "deceptive and unfair practices"? Aren't banks and the majority of the financial institutions already so heavily regulated by laws that were previously approved by government agencies? Should the government instead, establish a "Consumer Financial Education Agency"? This would ensure that consumers are educated in financial matter before they sign up for financial loans, credit cards etc.
Comment from Steve on July 1, 2009 at 2:00PM EST
We are getting what we asked for in this Country. The rally call should go out right now for all tied to the collection industry, medical etc to elect new people to the congress and senate. We have a very large group and someone should take the lead. If we don't stand up now, then hide your heads in the sand until you have no job.
Comment from Jim Ohio on July 1, 2009 at 4:02PM EST
BO would get a better return on investment spending the money on achieving financial literacy for all citizens (especially the younger ones) rather than for more layers of government. Some people just don't get the concept - if you play, or drive, or watch tv, or travel, play bingo, gamble - you pay!
Comment from Anonymous on July 1, 2009 at 5:33PM EST
More government oversight, more restrictions, more centralized regulation...is the word free already gone from the phrase "free market economy"? Good luck regulating your way out of a recession.
Comment from anonymiss on July 1, 2009 at 11:51PM EST
If you don't violate the law you won't have to worry. Plain and simple as that.
Comment from Anonymous on July 2, 2009 at 1:35PM EST
Great, so Barney Frank, who created the mess in the first place by involving government in the private sector by opening the subprime gates by force, then disavowed responsibility for the unforseen consequences, is helping lead the charge on this boondoggle, which gets the government even MORE involved in the private sector. Then when this creates even more problems, he'll introduce more legislation to get the government even more involved . . . well, maybe third time will be a charm?
Comment from BODAWG on July 7, 2009 at 10:00AM EST
It seems to me that if you have a solid foundation in the training of your frontline collectors, then there should be no worries regarding FDCPA. There is more to collections than bullying your borrower. Perhaps trying a little finess like "I can help you" with this "dark cloud". Also, laying the foundation to get your borrower out of debt with a decent tone of voice will get you in the door and on the way to repayment! Have a strong collection day!