CFPB Issues New Rules for Supervising Debt Collectors
The Consumer Financial Protection Bureau on Tuesday unveiled new rules for supervising large debt-collection firms, marking the first time that industry will be subject to federal oversight.
Starting Jan. 2, the government watchdog will regulate 175 debt-collection firms that each bring in more than $10 million in annual receipts — accounting for 63 percent of the market.
Examiners at the bureau will begin assessing whether debt collectors are complying with requirements of federal consumer financial law, including providing consumers with disclosures and accurate information. They will also investigate whether debt collectors have harassed or deceived consumers in the pursuit of payment.
The bureau estimates that about 30 million Americans have an average of $1,500 in debt subject to collection. Debt collectors typically report consumers’ collection status to credit bureaus, meaning any inaccuracy could affect the ability to get a mortgage, car loan or credit card.
“Larger companies tend to be the ones routinely filing mass cookie-cutter lawsuits, having huge databases of information that might be inaccurate, which is part of what causes all of these problems,” said Suzanne Martindale, a lawyer with Consumers Union. “The CFPB did cast a pretty wide net and should be capturing those companies.”
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