A notice of proposed rulemaking related to debt collection is planned for issuance in the spring of this year, the director of the Consumer Financial Protection Bureau (CFPB) stated in her message for the agency’s annual report to Congress on administration of the Fair Debt Collection Practices Act (FDCPA).
In her message, Director Kathleen (“Kathy”) Kraninger said the proposed rule will address issues such as communication practices and consumer disclosures.
“The Bureau understands that the debt collection industry, by and large, wants to comply with consumer protection laws,” she said in the message. “However, where there are bad actors who violate the law, we will take enforcement actions to protect consumers.”
Kraninger stated that the bureau “is committed to vigorously enforcing all consumer financial laws under its statutory authority, including the FDCPA, as well as to educating and empowering consumers to make better-informed financial decisions.” She continued, “We will continue to work to make sure that American consumers are treated fairly, that debt collectors can compete on a level playing field, and that all stakeholders can benefit from new developments in business practices and technology.”
The CFPB and Federal Trade Commission (FTC) share authority to enforce the FDCPA, and the report sent to Congress includes a report on activities of both agencies in this area.
The bureau reports having received approximately 81,500 complaints about first-party and third-party debt collection in 2018, which Kraninger noted makes debt collection one of the most prevalent topics of consumer complaints about financial products and services received by the Bureau.
The bureau last year engaged in six public enforcement actions arising from alleged FDCPA violations, the report states. One action resulted in an $800,000 civil penalty; in one case, the bureau accepted a judgment in favor of the defendant. Four other FDCPA cases remain in active litigation. Additionally, the report states that the CFPB last year filed amicus curie briefs in two cases arising under the FDCPA: one in the Supreme Court and the other in a federal court of appeals.
“In addition to the Bureau’s public enforcement actions involving FDCPA-covered debt collectors, the Bureau is conducting a number of non-public investigations of companies to determine whether they engaged in collection practices that violate the FDCPA or the DFA [Dodd-Frank Wall Street Reform and Consumer Protection Act],” the report notes.