It's estimated that 30 million U.S. consumers have debts in collection - and according to the Federal Trade Commission, the debt collection industry receives more complaints than any other, Reuters reports. Because of the floundering economy, debt collection has played a much larger role in consumers' lives over the past few years. The Consumer Financial Protection Bureau (CFPB), hoping to increase regulation in this growing area, recently announced its intention to add debt collectors and credit bureaus to the list of industries that it supervises. Under the 2010 Dodd-Frank financial oversight law, the CFPB already monitors short term lenders, mortgage companies and private student lenders. The decision to watch over debt collectors comes at a time when more people have overdue debts that have been sent to collection agencies, and because of foreclosures or job loss, credit reports for employment
have taken a hit. Consumers are now more vulnerable than ever before. "(Debt collection) is a very important influence on people's lives," CFPB director Richard Cordray told Reuters. "Often shadowy, often not understood by (consumers), and that is one of the reasons why we wanted to make this one of our first priorities." Under the proposal, the CFPB plans to regulate about 200 debt-related firms in total - 175 debt collectors and 30 credit reporting firms. Agencies with more than $10 million in annual receipts and consumer reporting agencies with more than $7 million in consumer-data revenue would be subject to supervision. It's projected that these parameters cover 63 percent of the nation's debt collection, as well as credit bureaus that generate 94 percent of consumer credit revenue. The three main players in the consumer credit industry are Experian, Equifax and TransUnion. Utilizing credit data provided by these bureaus, lenders determine whether to provide loans to people and what interest rates should be charged. Experian specifically has been working with the CFPB for the past year, and Equifax intends to continue collaboration to ensure the status quo. "We remain committed to meeting consumers' and clients' needs within regulatory guidelines," said Equifax spokesman Tim Klein, as quoted by Reuters. If the proposal goes through, debt collectors and reporting agencies will become the first industries to be targeted under the CFPB's extended power to regulate "larger participants," BusinessWeek adds.