Towards the beginning of his comments at the Consumer Advisory Board Meeting yesterday, Consumer Financial Protection Bureau Director Richard Cordray slipped in a quote from French author Antoine de Saint-Exupéry: “A goal without a plan is just a wish.” Though they leaned far more towards wish than plan, Cordray’s comments did detail the agency’s ambitious, high-level vision for the next two years. Several of those stated goals involve the collections industry.
Cordray listed nine broad agency goals in all, which he characterized as being “key areas where we hope to make substantial progress over the next two years.”
Many of those goals, whether directly or indirectly, impact the industry:
- A student loan market “where student loans are serviced in a way that is transparent and fair to help students repay their debts.”
- A debt collection market where “everyone who collects debts substantiates the debts they are collecting and communicates with debtors about their debts in a respectful, lawful, consumer-oriented manner.”
- A consumer reporting market “with better data that is more accurate and inclusive of more consumers.”
- A market “free from discrimination and where consumers have equal access to small business lending.”
- And an entire consumer financial marketplace “where consumers will have the ability to effectuate their rights and hold institutions accountable for unlawful conduct.”
These goals will drive Bureau actions of the next two years, Cordray added.
“[S]trategy starts with what we want to see in the marketplace, which then can guide us in selecting the tools most appropriate for the task,” he said.
The insideARM Perspective
In his comments, Director Cordray does not discuss creating a set of rules in which consumers and financial services firms operate, nor is he talking about specific practices the agency plans to target. Instead, he and his agency describe an idealized financial services sphere – a perfect outcome – and suggest that, in the next two years, the agency will develop and deploy certain, to-be-determined tools to affect that change.
Enforcing an outcome is a much bigger project than enforcing an input, but it seems clear that the CFPB intends to focus on the former. Of course, we’ll all have to see just how far the Bureau intends to go to create this idealized financial services market, but if Cordray and his agency are serious about meeting these goals, then financial services companies may have quite a bit more government involvement, rulemaking and enforcement to look forward to in the next few years.