FMA Alliance was honored to be selected to participate last Thursday on the CFPB’s historic Small Business Review  Panel (SBREFA) for debt collection rulemaking in Washington D.C.  I represented FMA Alliance, along with 19 other Small Entity Representatives (SERs), to provide advice, input, and recommendations regarding the outline of proposed debt collection rules.  The CFPB was gracious in listening and allowing the SERs to speak their minds, even when commentary became adversarial and, at times, emotional.

Several themes emerged as the SERs gave impassioned commentary in response to the questions provided by the CFPB, including:

  • legitimate debt collection agencies want to the follow the rules and do the right thing in order to help consumers resolve their debts
  • there is great need for clarity and specificity in the final rules and safe-harbor provisions wherever possible in order to prevent unnecessary litigation

Along with Matt Carroll from Credit Adjustments, Inc., I highlighted several concerns with the proposed debt collection contact restrictions.  We provided consumer telephone contact data indicating that the proposed contact limitations will have the effect of greatly lengthening the time needed to contact a consumer from several days to several months after placement of their account.

We explained that it would certainly lead to consumer harm if the proposed rules prevented agencies from resolving consumer disputes on a timely basis, and as a result, lengthened the time a consumer’s debt may be reported on their credit report. It seemed that this data was well received. 

Additionally, I encouraged the CFPB to adopt several common sense alternatives and exceptions to the contact restrictions including:

  • Allowing one call per number per day
  • Excluding inbound calls from the contact restrictions
  • Excluding letters from the contact restrictions, as the vast majority of letters sent are legally required communications and/or requested by the consumer
  • Allowing one voice message left per number per day
  • Excluding attorney contact from the contact restrictions
  • Allowing calls beyond the caps if a consumer/patient requests or allows for it

Comments from last week’s hearing will be combined with official written comments (due by September 9) and incorporated into the written report prepared by the Small Business Association, the Office of Management and Budget, and the CFPB, and will become part of the public record in the rulemaking process.  FMA is hopeful the CFPB will incorporate several of the cost effective and common sense alternatives provided by the Small Entity Representatives to help improve consumer experience and collection efficiency for both the consumer and collector alike.


Read insideARM’s detailed coverage of the CFPB’s Outline of Proposed Rules

CFPB Outlines Debt Collection Rulemaking Proposals

insideARM Perspective on CFPB Outline of Proposed Debt Collection Rules – Communication Part 1 (Contact frequency and voicemail messages)

insideARM Perspective on CFPB Outline of Proposed Debt Collection Rules – Communication Part 2 (General time, place, and manner restrictions; decedent debt; and consumer consent)

insideARM Perspective on CFPB Outline of Proposed Debt Collection Rules – Information Integrity (Data integrity, data transfer, substantiation, validation notice)

insideARM Perspective on CFPB Outline of Proposed Debt Collection Rules – Litigation and Time-Barred Disclosures

What Collectors Really Need to Know About the CFPB’s Proposed Rules - a podcast by Attorney John Rossman

15 Industry Experts React to CFPB Outline of Proposed Debt Collection Rules

Webinar: CFPB Rulemaking and Overview (August 16, repeated on August 18) – free for Compliance Professionals Forum members; $59 for others

President of FMA Alliance Shares Experience at Debt Collection SBREFA Hearing

Creditor Rights Law Firms Well-Represented on CFPB’s Small Business Review Panel

Small Business Representative Shares Her Thoughts About Yesterday’s Debt Collection SBREFA Hearing

Additional perspective to come.

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