Debt collection

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.

In her second day of congressional testimony, Kathy Kraninger took heat from Senate Democrats for weighing in on constitutional questions about her agency and for her enforcement track record.

CFPB Director Kathy Kraninger faced a barrage of questions from Democrats on the House Financial Services Committee over why the agency has not demanded refunds for consumers in recent settlements.

The industry had welcomed the Consumer Financial Protection Bureau plan allowing debt collectors to use electronic communication, but some worry about the effect of a court decision concerning email correspondence.

A hearing on legislative proposals exposed a sharp partisan divide over a regulatory plan to restrict the frequency of collection calls.

Linda Lacewell, New York’s superintendent of financial services, said the CFPB's debt collection proposal does not go far enough to protect consumers.

The agency's vote Thursday threatens to block many of the industry's communications with customers, though banks did win one concession.

The long-awaited proposal includes safe harbors to protect collectors from getting sued, but would restrict phone collection attempts and allow borrowers to opt out of receiving other communications.

As the CFPB moves closer to updating its debt collection regulations, revising restrictions on phone calls and other communications with consumers must be a priority.

The debt collection proposal is expected to address how debt collectors can use text messages and emails to track down debtors.

In her first policy speech since being confirmed as the agency's director, Kathy Kraninger promised less focus on enforcement actions and more emphasis on consumer education.