In its spring 2015 regulatory agenda, the CFPB announces that rulemaking for debt collection is not expected before December 2015.
The Consumer Financial Protection Bureau has once again updated its regulatory agenda, including its plans for regulating the debt collection industry. The CFPB’s recently released spring 2015 Regulatory Agenda is a voluntary update in conjunction with a broader initiative led by the Office of Management and Budget to publish a Unified Agenda of Regulatory and Deregulatory Actions across the federal government. Portions of the Unified Agenda will be published in the Federal Register, and the full set of materials is now available online.
In addition to debt collection activities, major initiatives involve mortgages, prepaid financial products, payday and other similar loans, overdraft services, defining auto lending larger participants and arbitration. The agenda categorizes rulemaking actions by stage as pre-rule, proposed rule, final rule, long term actions, or completed actions. The next semi-annual agenda, typically released in the fall, will reflect the results of further prioritization and planning.
Progress on the debt collection rulemaking continues to move more slowly than the CFPB anticipated. In its fall 2014 agenda, the CFPB predicted that pre-rule activities related to debt collection would last through April 2015. However, in its most recent regulatory agenda, the CFPB stated it now expects pre-rule activities for debt collection to last until December 2015. The CFPB staff has indicated the pre-rule activities would include convening a SBREFA panel. While this delay is not very surprising given the CFPB’s decision to move forward with payday lending rules first, it is important to remember that this date only represents the CFPB’s estimate and, as has already been demonstrated, is not a guarantee that formal action will actually occur in December 2015.
Substantively, the regulatory agenda for the debt collection rulemaking appears to remain the same. The CFPB states that it is still considering whether rules governing the collection of debts are warranted under the Fair Debt Collection Practices Act or other CFPB authorities, and, if so, what types of rules would be appropriate. According to the CFPB, rulemaking might include disclosures or address acts or practices in connection with debt collection activities.
The CFPB also continues to state that it is engaged in qualitative testing to determine what information would be useful for consumers to have about debt collection and how that information should be provided to them. Once again, the agenda also includes reference to the CFPB survey that has been sent to consumers to obtain information about their experiences with debt collectors. As previously reported, ACA International believes this survey is conceptually flawed and submitted comments opposing the bureau moving forward with the proposed survey given its substantial negative bias.
As a reminder, the CFPB received more than 23,000 comments earlier this year in response to its advance notice of proposed rulemaking on debt collection released in November 2013, including comprehensive comments from ACA International. Specifically, ACA argued that:
- The CFPB should recognize that the debt collection market is extremely varied in the types of debt being collected and the nature and size of the nation’s debt collectors encompasses a broad scope.
- The CFPB should appropriately tailor requirements to the specific circumstances for which any perceived problem exists when imposing additional regulatory requirements on industry participants.
- The CFPB should address outdated, unnecessary or unduly burdensome legal requirements under the Fair Debt Collection Practices Act.
- The CFPB should strive for maximum clarity in any forthcoming regulations to ensure the regulatory compliance obligations of industry participants are certain, and to develop model language, disclosures, forms and examples of compliant behavior, whenever practicable, in order to create appropriate “safe harbors” from regulatory enforcement and private civil litigation that seeks to exploit legal and regulatory uncertainty to the detriment of debt collectors.
ACA continuously monitors for regulatory activity related to debt collection and is committed to helping the CFPB understand how the credit and collection industry really works, as well as the importance of appropriate and fair regulations to support the crucial role that this industry plays in the U.S. economy. ACA will continue to report on the status of the CFPB’s debt collection rulemaking efforts as more information becomes available.