CFPB scheduled exams for debt collectors outside its jurisdiction: IG
The Consumer Financial Protection Bureau inadvertently scheduled exams at two debt collection firms that it had no jurisdiction over and in some instances sent examiners to the wrong regions, the bureau’s inspector general said.
The agency's Office of the Inspector General said Tuesday in a semiannual report to Congress that the CFPB had trouble determining if some collectors of medical debt were subject to its oversight.
The bureau is authorized to supervise "larger participants" in nonbank sectors such as debt collection, which are defined as totaling $10 million in annual revenue. Yet medical debt cannot be applied toward that threshold, and information on the amount of medical debt held by an institution often is not publicly available.
The CFPB inadvertently scheduled exams of debt collections “only to discover that the institutions did not satisfy the Larger Participant Rule and thus were not subject to the Bureau’s supervisory jurisdiction,” the IG found. (The CFPB's inspector general is also the watchdog of the Federal Reserve Board.)
“In the two instances we identified, the Bureau canceled the examination prior to its start date,” the inspector general report said.
Roughly 175 debt collection firms, or 4% of the industry, qualify as large participants, the CFPB has estimated.
The inspector general also found that the bureau had scheduled several exams in the incorrect region.
"We heard of instances in which a region learned that an institution’s operations were in a different region just prior to initiating an examination," its report said. "As a result, examiners traveled across the country to complete the scheduled examination. If the information on the location of the institution’s operations had been available sooner, the Bureau may have saved examiner time and travel resources."