How to clarify ‘abusive acts’ is first topic for coming CFPB symposia, Kraninger says

Also indicates proposed rules coming for fair debt collection law

A symposia series planned in the coming year by the Consumer Financial Protection Bureau (CFPB) will focus on topics related to the bureau’s mission, beginning with a look at clarifying the meaning of “abusive acts or practices” under Section 1031 of the bureau’s enabling statute, the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), agency Director Kathleen Kraninger said in a speech Wednesday.

The new consumer bureau director also told the group to be on the lookout (“in the coming weeks”) for proposed rules to implement the Fair Debt Collection Practices Act (FDCPA).

Speaking before the Bipartisan Policy Center (BPC), Kraninger said the symposia (specific timing was not detailed) will build on the bureau’s approach to outreach last year in convening experts on access to credit issues and credit invisibles. “These types of proactive efforts are precisely how we intend to engage,” she said.

The BPC is a Washington-based policy organization founded in 2007 to promote bipartisanship. Along those lines, its was formed by a  bipartisan group of former leaders of the U.S. Senate: Howard Baker (R-Tenn.), Tom Daschle (D-S.D.), Bob Dole (R-Kansas), and George J. Mitchell (D-Maine).

“Congress gave the Bureau authority to protect consumers from unfair, deceptive, or abusive acts and practices and from discrimination – a fundamental and critical responsibility. Whereas unfairness and deception doctrines have been substantially developed under the [Federal Trade Commission] Act, abusiveness does not have the same record,” she said in prepared remarks. “While the statute defines abusive, some clarification, particularly with regard to reasonableness standards, may be useful. In last fall’s Unified Regulatory Agenda, the Bureau stated it is ‘considering whether rulemaking or other activities may be helpful to clarify the meaning of abusiveness.’ We are now taking the next step to explore this issue.”

Regarding the FDCPA, Kraninger said her agency will propose clarifying rules to better enable the use of modern communications technology in collections activity. “The proposed rules also would protect consumers with clear, bright-line limits on the number of calls they may receive from debt collectors on a weekly basis,” she said. “We will propose to provide clarity on how collectors may communicate via newer technology such as email or text messages. We will propose that collectors provide consumers with more and better information at the outset of collection to help them identify debts and understand their options, including their rights in disputing debts or paying them.”

Kraninger added that the bureau is working to modernize the legal regime for debt collection, and in that process is “keenly interested in the views of stakeholders and look forward to engagement with you.”

Throughout her speech, Kraninger discussed the bureau’s initiatives of the past year and noted the feedback she received during her three-month listening tour. In discussions during this tour and with bureau staff, she noted, there were a few areas of consensus, among them:

  • The CFPB’s mission and the agency itself are critical to our economy and are not going away.
  • A level playing field amongst financial services providers is an important goal.
  • Bad actors harm consumers and undermine the integrity of markets; they should be held accountable.
  • All stakeholders expressed a strong interest in protecting consumers, though they differ on the best way to accomplish that mutual interest.

She said the bureau will use all the tools available to it to prevent harm to consumers, will continue its consumer education efforts (to include the launch of a savings “boot camp” later in the year), and will work to articulate “clear rules of the road for regulated entities that promote competition, increase transparency, and preserve fair markets for financial products and services.”

Kraninger also referenced last year’s “call for evidence” by then-Acting Director John (“Mick”) Mulvaney, noting the bureau is working to organize the approximately 1,750 separate issues raised in that endeavor that are related to rulemaking. “The CFPB must acknowledge that the costs imposed on regulated entities absolutely affect access to, and the availability of, credit to consumers,” she said. “To that end, the Bureau continues to sift through the comments from the call for evidence last year, particularly organizing roughly 1,750 separate issues related to rulemaking. I have pledged to stakeholders that we will share our reaction to those comments through our development of the regulatory agenda and engage in a robust discourse on the relevant topics.”

Speech by CFPB Director Kathleen Kraninger Before the Bipartisan Policy Center

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