News & Resources

How CFPB regulations may impact debt collection

Oct 16, 2011 Mike Garretson

This week, the the Senate Banking Committee approved Richard Cordray to direct the Consumer Financial Protection Bureau - a new regulatory watchdog group created as part of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. At this point the true breadth of the industry's regulatory focus and power is subject to speculation, but some of the key points include the enforcement of consumer communications on debt collection obligations, clarification on the use of user-fee communications and tighter documentation standards for the sale and purchase of consumer debt. In response to some of the rules the FTC and CFPB are expected to enforce in coming years, debt collection association ACA International issued some guidelines for collection law reform. It calls, for the freedom to communicate with consumers by any method of communication available and to maintain consumer account information for at least seven years from the date of charge-off, Inside ARM reports. "While the ACA proposals are more specific than those from the FTC, rule makers at the CFPB will probably be reticent to accept the recommendations of an industry group without significant alteration," writes Patrick Lunsford for the source. "Instead, the CFPB might look at states and courts and their recent moves to amend collection laws and rules.