One law professor believes the next enforcement action to come from the Bureau of Consumer Financial Protection will be against a debt collection agency, after the CFPB announced a $500 million fine against Wells Fargo.
Bringing a debt collection enforcement action would satisfy a couple of different schools of thought, wrote Jeff Sovern, a law professor at St. John’s University and one of the coordinators of the Consumer Law & Policy Blog.
On one hand, Mick Mulvaney, the acting director of the agency, has gone on record saying that the CFPB will use quantitative measures when deciding on regulatory and enforcement actions, and used the number of complaints that have been received about debt collections compared with the number of complaints filed by consumers about payday lending, as an example of what will be driving the CFPB’s priorities moving forward.
On the other hand, Sovern notes, if the CFPB is interested in making it look like they are being tough on bad actors in the financial services space, going after a debt collector would be a smart move, because the CFPB is not the only regulator that has oversight over debt collectors. Writes Sovern:
The CFPB, in conjunction with the Office of the Comptroller of the Currency, announced a $1 billion fine against Wells Fargo on Friday, related to unfair practices used by the financial services giant in its mortgage and auto lending operations.
Of course, Sovern prefaced his expectations by saying, “It’s good news that the CFPB has finally announced an enforcement action under Mr. Mulvaney. But I remain very interested to see what the next enforcement action is, if there is one.”