Last week The Hill published a post by opinion contributor Beau Brunson, director of policy and regulatory affairs at Consumer’s Research. Titled, “The CFPB’s debt collection proposal empowers consumers,” is the most balanced public statement I’ve seen from a representative of a consumer group.
According to its website, the mission of Consumer’s Research, a non-profit founded in 1929, is to increase the knowledge and understanding of issues, policies, products, and services of concern to consumers and to promote the freedom to act on that knowledge and understanding. In 1981 the organization expanded from its original product focus to one that “considers the effects laws, regulations, and government programs have on consumers.” The group says it is committed to unbiased, fact-based analysis.
This is very interesting to me. Working to provide input into the Consumer Financial Protection Bureau's (CFPB) process of debt collection rulemaking over the last six years, I have often wrestled with whether regulations should be driven by the needs of outliers or the needs of the majority. I say this without judgment that the word “outlier” may seem to imply.
Part of my job is to facilitate dialogue between industry and consumer groups. Real dialogue, off the record, not in front of an audience. This is the only way to get beyond talking points – on both sides (something there is precious little of in our society as a whole, not just as it relates to debt collection…but I digress). I have greatly appreciated the willingness of all parties to come to this table. After hosting many of these dialogue sessions, I’ve come to appreciate that, by definition, 100% of the debt collection cases consumer advocates see are negative. After all, why would someone who had a positive experience seek out an advocate? So, I can see why many consumer groups feel strongly that any rules should strictly limit contact with consumers.
On the other hand, legitimate debt collectors see a full range of circumstances, including the vast majority of consumers -- who want to resolve accounts, a smaller percentage of consumers -- whose intention is to game the system, and those who – for a variety of reasons -- truly can’t pay.
This different view of the landscape is a real disconnect which has led to a very complicated situation for those tasked with sorting it out -- and, in my humble opinion, is in part why debt collection rulemaking has taken so many years.
Regulations should absolutely protect those most vulnerable; they also should not create an undue impediment for the majority. This is a balance most consumer advocates or legislators will not say out loud in public.
Brunson, however, articulated this idea in writing and pushed past the talking points to explain how he views the proposed rules. He notes that in a recent hearing where CFPB Director Kathleen Kraninger testified, “numerous members of Congress expressed deep concern that the proposal would neglect consumer interests in favor of debt collectors.” Indeed, this is a widely-reported position. He continues, “Rhetoric, however, doesn’t match reality. The CFPB’s proposal empowers borrowers by putting them in control of how their debt is collected. This is good policy, and consumers should benefit from it.”
He goes on to debunk a number of assumptions about how the proposed rule would bring untold harassment down on consumers. He also notes,
“Unintended consequences are the scourge of consumer protection regulations. Typically, we can trace their origin to a narrow understanding of consumer harm, one that focuses too much on the immediate loss of money or time, while neglecting other kinds of harm.”
The full article is worth a read.
In the spirit of the holiday, I’ll send thanks to Mr. Brunson for his willingness to step out and share some unpopular, yet balanced, facts about this complex and nuanced topic.