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Expecting the Unexpected!
The CFPB is making a bold claim in its Spring 2020 Rulemaking Agenda: "The Bureau expects to take final action in October 2020 with regard to the May 2019 proposed rule that would prescribe rules under Regulation F to govern the activities of debt collectors, as that term is defined under the Fair Debt Collection Practices Act."
What does this tell us? That it is very unlikely that the new debt collection rules will probably not be published in October. (Not that you should not start thinking about a planning and implementation team now so you're not scrambling at the last minute. By the way, any Research Assistant member interested in participating in a CFPB Work Group when that time comes, email me: mbevel@insidearm.com.)
Why do we think that? A pandemic, a recent court case, their already-running questionnaires about how LMPs are serving during the pandemic, the current questionnaires that they aren't likely to get to until at least August.
It's an ambitious goal with a lot of related and unrelated side projects. But October might mean November or December -- so go into this with a plan of implementation and documentation.
An Informal(ish) Poll About Covid-19, Stimulus Checks, Disputes, and Complaints
Several weeks ago, we had asked agencies and others in the debt industry to answer a short, 3-question survey:
- Did your agency notice an increase in collections after the Government stimulus checks were sent to most families?
- Have you noticed an increase in disputes during the Covid-19 quarantine?
- Have you noticed an increase in complaints during the Covid-19 quarantine?
The results were interesting:
65% of industry members reported an increase in collections after most American had received their stimulus checks.
77% reported an increase in disputes. There is no way to tell if there is a correlation, especially in those states where stimulus money was protected from garnishment and collection efforts.
And, maybe more unsurprisingly, 85% reported an increase in complaints during this time period.
What do we make of this? Some people used their stimulus money to catch up on past-due debts. We imagine this would be primarily those who were still employed at the time and receiving a paycheck. The stimulus wasn't the same necessity that it was for those unemployed or underemployed during this time.
We also think that, with more people being home to answer the phone, this would, of course, lead in a spike in disputes (especially those who hadn't really paid attention to their credit reports and were only now discovering bad information and those trying to better their credit by getting those delinquent accounts off), and complaints (people, for some part, do not seem to like talking to debt collectors about their unpaid debt).
There has been talk of another stimulus program, but it is now caught up in a legislative environment where the existence of the pandemic and the effectiveness of the quarantine are partisan issues rather than medical decisions made by medical professionals.
If there is another stimulus check, we'll probably run another Very Brief Survey to compare.
