Bureau may enforce stricter collections policies
May 17, 2011 Kyle Duncan
Beginning July 21, a new agency will join the Federal Trade Commission to investigate complaints and violations of debt collection agencies, according to The Atlanta Journal Constitution. The Consumer Financial Protection Bureau, a new federal watchdog group, will have many regulatory powers that could further negate harassing and illegal debt collection practices. "CFPB will have all kinds of power to set rules," Emory Clark, managing partner at bankruptcy law firm Clark & Washington, tells the news source. "The FTC can investigate complaints, but can’t write rules to address new technology, such as cellphones, email and voicemail. Those conveniences allow collectors to communicate more easily with debtors and create more potential for abuses and violations." The media outlet notes that consumer complaints about debt collectors rose 17 percent last year to 140,036, according to the Federal Trade Commission. In addition, the number of grievances with agencies has tripled since 2002, accounting for 27 percent of all complaints. However, some Republican legislators believe the Bureau may hold too much power to write and enforce rules. Currently, there is no director in place for the CFPB, and legislation was approved last week to spread the bureau subcommittee to five members, which would make it easier for the Financial Stability Oversight Council to overturn regulations.