CFPB Issues Advance Notice of Proposed Rulemaking Concerning the Collection of Consumer Debt

CFPB Issues Advance Notice of Proposed Rulemaking Concerning the Collection of Consumer Debt

 The Consumer Financial Protection Bureau (CFPB) intends to promulgate CFPB rules governing the collection of consumer debt.  On November 6, 2013, the CFPB issued an Advance Notice of Proposed Rulemaking (ANPR) in which it indicates that “the Bureau is interested in learning through responses to this advance notice of proposed rulemaking (ANPR) about the debt collection system, about consumer experiences with the debt collection system, and about how rules for debt collectors might protect consumers without imposing unnecessary burdens on industry.” 

The CFPB is seeking to collect data from the public both formally in response to the ANPR, and also informally through RegulationRoom.org, a website operated by Cornell Law School with the intent of making public comments towards proposed regulations easier “in an interactive and intuitive way.”  RegulationRoom, in turn, requests that members of the public “[h]elp CFPB make the right decisions about new consumer debt collection regulations.  Share what you know and encourage family, friends and coworkers to do the same.”

Consumer debt collection practices are governed nationally by the Fair Debt Collection Practices Act (FDCPA) 15 U.S.C. § 1692, et seq, which is designed to prohibit “abusive practices” by debt collectors while seeking to collect indebtedness from consumers.  Noting that no agency had the authority to issue regulations under the FDCPA until the passage of the Dodd-Frank Act vested that authority in the CFPB, Director Rich Cordray issued a statement illustrating the CFPB’s intent to modernize the application of the statute through the CFPB’s planned regulations because the “existing measures that were written before the Internet, before social media, and before many other new communication technologies.”

An additional area of inquiry in the ANPR, which is of significance to the consumer lending industry, concerns FDCPA’s general inapplicability to collection actions undertaken directly by creditors. Although acknowledging that the collection actions of creditors typically fall outside of the FDCPA, the ANPR explains that “[t]he Bureau is especially interested in information bearing on whether a rule under the Dodd-Frank Act would be useful to protect consumers from the conduct of creditors collecting in their own names on debts arising out of consumer credit transactions.”

The comment period ends on February 10, 2014.

Read more articles about the Consumer Financial Protection Bureau at Dykema’s CFPB Blog

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