FTC & CFPB: Who Is to Enforce the FDCPA?

The Consumer Financial Protection Bureau (CFPB) was created in 2011 as a response to the financial crisis of 2007-2008 to regulate consumer protection in regard to financial services and products, thus enforcing the Fair Debt Collection Practices Act (FDCPA).   While the CFPB has become the new institution for the debt collection industry to be considerate of, it is important to remember that the Federal Trade Commission (FTC) is still actively enforcing the FDCPA with its regulations as well. Last year, the CFPB took over the responsibility of submitting the annual FDCPA report to Congress for the first time.  In anticipation of this report, the FTC sent a letter to the CFPB in February of 2013 outlining the FTC’s work for enforcing the FDCPA and concerning the debt collection industry.  In this letter, the FTC described several court actions it took against debt collectors who engaged in unfair or deceptive conduct stating that this is the highest number of cases that it had brought in a year.  The letter also mentions policy and educational initiations in regards to debt collection that the FTC is engaged in.

Also, in January of 2013, the FTC released an extensive 162-page report, “The Structure and Practices of the Debt Buying Industry”, which included an analysis of a large-scale amount of data about buying debt.  This data was gathered after 2009 and contained nearly 90 million consumer accounts.

Since the FTC and the CFPB share in part the jurisdiction of enforcing the FDCPA, both agencies signed a Memorandum of Understanding in 2011, “recognizing that effective cooperation is critical to protect consumers, prevent duplication of efforts, provide consistency and ensure a vibrant marketplace for Consumer Financial Products or Services”.   In March 2012, the CFPB also started sharing the complaints received by consumers with the online database of consumer complaints maintained by the FTC.

Therefore, the FTC and the CFPB are cooperating in the enforcement of the FDCPA and it is critical for the debt collection industry to monitor both of these organizations’ regulations.