ARLINGTON, Va. — With the Consumer Financial Protection Bureau set to look into debt-collection practices, NAFCU issued a letter Friday urging the bureau to distinguish between credit unions collecting debts on their own behalf and third-party debt collectors.
"First and foremost, NAFCU is concerned that the CFPB has chosen to conflate these two distinct statutory authorities under the same [advanced notice of proposed rulemaking], wrote Angela Meyster, NAFCU's regulatory affairs counsel. "Credit unions are not, generally speaking, debt collectors under the FDCPA because they are not collecting debts on behalf of others. Credit unions typically only collect on their own obligations."
Meyster's letter urged the CFPB to distinguish between credit union collections and third-party debt collectors.
"The CFPB should not promulgate regulations under its FDCPA authority that would apply to credit unions or other financial institutions that are not currently subject to FDCPA requirements," she wrote.
Meyster went on to emphasize that when CUs enter into the collections process, "they work to continue to support their relationships with their members," a different relationship than that of a third-party collector and debtor.
"Rather than creating additional requirements for credit unions that are collecting on their own obligations and are not currently under the purview of the FDCPA, the CFPB should release guidance which can be used by credit unions in designing their own policies and procedures," wrote Meyster. "NAFCU also urges the CFPB to take into consideration existing individual state laws on debt collection in any action that they decide to take."
