The Consumer Financial Protection Bureau's (CFPB) Taskforce on Federal Consumer Financial Law—established by Director Kraninger in January 2020—took its first step toward its mission by submitting a Request for Information (RFI). In the RFI, the Taskforce seeks input from the publish on areas in should focus on—specifically stating they want input from those involved with third-party and first-party debt collection markets.
To generalize, the Taskforce is looking for information on the current state of consumer financial products, laws, and regulations in order to determine how to best optimize the balance between consumer access to such products without compromising consumer protection. Some questions asked in the RFI include:
- What areas of the consumer financial services markets are functioning well? Defined as being fair, transparent, and competitive.
- What areas of the markets would benefit from regulatory change?
- Are there areas in current laws and regulations that are "of significant ambiguity or inconsistency in the regulations?"
- "Where have regulations failed to keep up with rapid changes in consumer financial services markets?"
- Whether clear, bright-line rules are favorable to a "principle-based" approach in regulations?
- Credit reporting—are current protections sufficient?
- Credit reporting—are requirements for companies to regarding procedures to ensure the accuracy of credit reports sufficient?
- Data breaches—would a federal law or regulation be desirable in order to have a uniform national standard for data breach obligations?
The prevalent question in some of these sections is:
Are there any obligations in these regulations or statutes that impose a burden not justified by the corresponding consumer benefit?
Comments to the RFI will be due 60 days after the RFI is published in the Federal Register, which has not yet occurred. Instructions on submitting comments are included in the RFI document.
While the CFPB has already heavily focused on the debt collection industry in its recent rulemaking, industry members should respond to this RFI for multiple reasons.
First and foremost, the Taskforce explicitly requests input from the debt collection markets. Does this mean there will be further regulations down the road beyond the current proposed rules? Who knows, but if there are, debt collectors need to have their voices heard.
This is also an opportunity to address certain areas of current legal and regulatory difficulty for debt collectors. For example, the large chunk of a debt collector's legal budget that is dedicated solely to paying out settlements to crafty plaintiffs' counsel, caused by the one-sided nature of the FDCPA's attorney fee provision, who bring—as E.D.N.Y. calls them—"lawyer's case[s]" should be eye-opening. Or how about the incredible burdens that credit repair organizations are causing to debt collectors, which ultimately harms consumers, by flooding debt collectors with massive volumes of form credit disputes—again with the goal to seek out a legal settlement from a debt collectors—making it difficult for debt collectors to separate true disputes from the chaff?
There are many, many topics that can be addressed, and insideARM urges not just industry groups, but individual companies and firms, to submit responses to this RFI.