Debt collection

The bureau said two rules related to communications with debtors will go into effect as originally planned on Nov. 30. The agency had previously proposed an extension to consider consumer advocates' concerns about the regulations.

Collectors are mulling a procedural overhaul after a three-judge panel said the practice of using vendors to inform consumers about outstanding debts is illegal. The case may also complicate the CFPB's upcoming rule on electronic messaging.

The agency's new policy requires collectors seeking to evict tenants to provide written notice of their rights under a federal moratorium.

The consumer bureau is proposing to give companies until January 2022 to comply with one rule regarding communications from collectors and another clarifying disclosure requirements.

Acting Director Dave Uejio wrote in a blog post that the Consumer Financial Protection Bureau needs more time to consider rules that were finalized under the Trump administration but have not yet gone into effect.

The CFPB issued two rulemakings in 2020 that the financial services industry and consumer advocates hoped would finally clarify key issues over how collectors contact debtors and deal with legacy debts. But both sides want the incoming Biden administration to make further changes.

The agency's rule outlines steps collectors must take to inform consumers about an outstanding debt, and prohibits companies from pursuing lawsuits after a statute of limitations has ended.

The agency’s final rule modernizing the Fair Debt Collection Practice Act limits calls to seven per week, but collectors won stronger protections from liability claims and other key changes to the original proposal.

A 2019 decision by Amy Coney Barrett, then a 7th Circuit judge, cited an earlier Supreme Court ruling suggesting a high bar for plaintiffs to claim harm. But other jurists have favored a less onerous standard.

Kathy Kraninger’s job status would be in question if Joe Biden wins the White House. If the president is reelected, she may continue balancing a deregulatory agenda with her unexpectedly tough stance on enforcement.

Through Operation Corrupt Collector, the bureau is coordinating with over 50 other state and federal agencies to target firms for wrongdoing and inform consumers of their rights

The financial industry has praised the measured approach taken in a pending regulation on permitted communications with consumers. But two recent complaints by the bureau against debt collectors reflect a potentially aggressive enforcement stance.

The California plan to create a new, tougher state regulatory agency is at the finish line after lawmakers agreed to key exemptions for banks while maintaining strong enforcement measures for payday lenders and other firms.

KeyBank, Regions and others are using self-service portals, robotic processing automation and virtual assistants to digitize the collections process and make it more humane in anticipation of rising delinquencies.

Tom Pahl, a former longtime regulator at the Federal Trade Commission, has led key rulemaking efforts for the consumer bureau.

Democrats’ latest proposal to back debt collectors, enable loans for nonprofits and provide other relief could help steer negotiations with the Senate on more stimulus.

In another sign of state officials trying to outdo the Consumer Financial Protection Bureau, governors in California and New York want greater authority to license and oversee the debt collection industry.

Former CFPB Director Richard Cordray and consumer advocates have designed a proposed state consumer agency that would subject more financial firms and fintechs to state oversight.

The Consumer Financial Protection Bureau faces a busy policy agenda heading into the new year, as well as strong external forces that are beyond its control.

Lenders contend the proposal goes beyond policing third-party debt collectors and could expose banks to enforcement actions and lawsuits.