CFPB Issues Fair Debt Collection Report
March 26, 2015, the Consumer Financial Protection Bureau (CFPB) submitted to Congress its Fourth Annual Report summarizing activities to administer the Fair Debt Collections Practices Act (FDCPA). This year’s report describes activities conducted by the CFPB and the FTC during 2014 in relation to debt collection. The CFPB and the FTC work closely to coordinate debt collection enforcement actions among other matters related to debt collection.
This report provides a background of the debt collection market; contains an overview of consumer complaints submitted to the CFPB in 2014; summarizes the Bureau’s supervisory activities in the debt collection market; describes the Bureau’s and the Commission’s enforcement actions; presents the CFPB’s and FTC’s consumer education and outreach initiatives; and discusses developments in the Bureau’s rulemaking activities, and the FTC’s policy and research initiatives.
Below are key points from the report:
• The CFPB began accepting consumers’ debt collection complaints in the second half of 2013. Hence, 2014 is the first full year of data on such complaints. Last year the Bureau handled over 88,300 debt collection complaints, positioning debt collection as the leading source of consumer complaints. The Bureau forwarded 45% of these complaints to debt collectors, which responded in a timely manner to 89% of them, a total of 35,100 answered complaints.
• The Bureau is making progress on developing the first comprehensive federal regulations covering debt collection. In developing these rules, we are considering provisions to protect consumers from problematic practices of some collectors as well as to reflect technological changes in the debt collection industry. The Bureau’s decisions on proposed rules will be informed, among other things, by the more than 23,000 comments we received in response to our debt collection advance notice of proposed rulemaking (“ANPR”); a consumer survey and disclosure research; and the views of small businesses at any Small Business Regulatory Enforcement Fairness Act (“SBREFA”) panel the Bureau may convene before issuing a notice of proposed rulemaking (“NPRM”). Furthermore, the Bureau’s rulemaking efforts are informed by engaging with the public through roundtables, field hearings, meetings, and surveys about their experiences with debt collection.
• The Bureau reported on legal violations related to debt collection practices uncovered by the Bureau’s examiners. The Bureau found deceptive student loan debt collection practices, prohibited disclosures of debts to third parties, and excessive calls to consumers, among other violations.
• The CFPB continuously works with the FTC to enforce the laws applicable to debt collectors, and files amicus briefs, often jointly with the FTC, on important issues of law. This has become a busy and highly productive partnership, and we are deeply appreciative of our colleagues at the FTC for all the fine work they do, including their notable work on collection practices affecting Latino consumers with low English proficiency (“LEP”) and the substantial outreach efforts both to that population specifically and more generally, as described herein. We also are grateful for the close strategic work we are doing together, which helps us make the most of our joint efforts to protect consumers in this important area. In 2014, the CFPB and the FTC provided almost $700 million in relief to consumers who were subject to illegal collections practices; the CFPB collected $13 million in fines, and took seven enforcement actions involving egregious debt collection violations; the FTC’s enforcement actions resulted in 47 businesses and individuals being banned from the debt collection business.
Anna DeSimone founded Bankers Advisory in 1986 and is a nationally recognized authority in residential mortgage lending. She has received numerous industry awards and has authored more than 40 best practices guides and hundreds of articles.
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