"The Consumer Financial Protection Bureau is considering new rules to govern debt collection practices that could for the first time include banks and other creditors that are collecting their own debt," writes American Banker's Rachel Witkowski.
"Updating the legal framework to protect today's consumers and to allow fair and appropriate use of modern technology is a high priority for the Consumer Bureau, which motivates this advance notice of proposed rulemaking," said CFPB Director Richard Cordray in a call with reporters on Tuesday. "We are seeking to hear from the public - consumers, consumer advocates, creditors, debt buyers, and debt collectors - about what works and what does not in the current debt collection market."
"We want to hear how we can better protect consumers and bring greater accountability to this multi-billion-dollar industry without hamstringing legitimate debt collection activities," Cordray continued. "Collection of consumer debts serves an important role in the proper functioning of consumer credit markets. But certain debt collection practices have long been a source of frustration for many consumers, generating a heavy volume of consumer complaints at all levels of government - including at the Consumer Bureau."
The CFPB, created under the 2010 Dodd-Frank Act, is also seeking to expand the Fair Debt Collection Practices Act to include new restrictions on how collectors contact a borrower.
CFPB officials expect to close the comment period mid-February 2014.
For the full piece see "CFPB Debt Collection Rules May Move in Unprecedented Direction" (may require subscription).