Feb 26, 2014 Philip Burgess
The debt collection industry in the United States is vital to the overall success and growth of the national economy. Collection agents provide an important service to companies, as they are tasked with recovering outstanding accounts. Recovering these debts can often be the difference between success and failure for organizations, as being unable to collect money they are owed can lead to serious cash flow concerns.
While the industry is already heavily regulated, Susan Eckert of Promontory Financial Group noted that further stipulations may be passed that will limit collectors' abilities to function in a recent article for insideARM. Eckert indicated that the Office of the Comptroller of the Currency as well as the Federal Trade Commission have been ramping up their efforts to enforce debt collection actions.
Moreover, she asserted that the Consumer Financial Protection Bureau (CFPB) is also looking to sponsor more stringent industry policies. The fact that the CFPB is set to pass reforms in the near future is particularly important. A relatively new agency, the CFPB was created in the wake of the Great Recession in order to closely regulate the consumer finance sector. While change in the collection industry has been in the cards for some time, the CFPB's full implementation will likely see the collection landscape become more difficult to navigate.
Prepare ahead of time
While this may be worrying for some collection leaders, it's simply an aspect of operating they need to come to terms with. By ensuring that all agents fully understand the policies outlined in the Fair Debt Collection Practices Act (FDCPA), agency executives can take a vital first step in preparing their organizations for new regulations that may be on the horizon.
While new laws will certainly change the landscape, the FDCPA is an incredibly complex piece of legislation that requires close knowledge for agents to understand. If they are proficient with FDCPA policies, they will likely be able to easily learn about new rules that may be coming.
Although there is no set timetable for the implementation of new regulations, experts such as Eckert agree that they are imminent. Therefore, professionals need to take the necessary steps to prepare for the change as soon as possible. This means brushing up on existing laws, as well as keeping an eye on all future statements and notices posted by the FDCPA and other government organizations.