The Consumer Financial Protection Bureau (“CFPB”) issued an Advanced Notice of Proposed Rulemaking on November 5th, thus starting to exercise its rulemaking authority by taking a step towards the adoption of debt collection rules. Under the Dodd-Frank Act, the CFPB is the first federal agency with authority to issue rules under the Fair Debt Collection Practices Act (“FDCPA”). The CFPB is also authorized by the Dodd-Frank Act to issue rules prohibiting unfair, deceptive or abusive acts or practices. The CFPB announced the Advance Notice which will seek public comments on how to regulate the multi-million dollar debt collection industry. The CFPB is looking for feedback from the public on rules which may require accuracy of documents shared between all collection parties, such as settlement firms and buyers; establish new restrictions on originating creditors; and update rules on how collectors communicate to consumers.
In a call with reporters the CFPB Director Richard Cordray said: “Updating the legal framework to protect today’s consumers and to allow fair and appropriate use of modern technology is a high priority for the Consumer Bureau, which motivates this Advance Notice of Proposed Rulemaking. We are seeking to hear from the public- consumers, consumer advocates, creditors, debt buyers, and debt collectors- about what works and what does not in the current debt collection market.”
A 90-day comment period began on November 6th and the public may visit www.regulationroom.org to participate. The Regulation Room project was created by joint efforts of the CFPB and the Cornell University e-Rulemaking Initiative to facilitate the commenting process and to make it easy and user-friendly. The public may also comment on the Advance Notice by following the instructions on www.regulations.gov .
Cordray is optimistic in regards to the regulations the CFPB will make and their effect on the industry: “It will take some time to change this industry in a lasting way. But we will work closely with stakeholders to achieve a better markletplace. Both consumers and responsible businesses stand to benefit by improved debt collection standards.”