The four organizations representing the nation’s accounts receivables management industry are calling on Congress to keep the Federal Trade Commission as the exclusive regulator of debt purchasers and collectors. The unprecedented action by the trade groups to come together is a response to proposed legislation that would strip the FTC of its powers and place the industry under a new authority.
DBA International, ACA International, the Commercial Law League of America and the National Association of Retail Collection Attorneys represent thousands of businesses throughout the United States that purchase and collect delinquent consumer debt - employing hundreds of thousands and returning $40 billion annually to the economy.
Since 1978, the accounts receivables management industry has been regulated by the Fair Debt Collection Practices Act. The FDCPA sets legal standards under which debt buyers and collectors conduct their business, defines the rights of consumers involved with debt collectors; and prescribes penalties and remedies for violations of the Act.
The FTC has enforced FDCPA since its inception. A current bill proposed by Sen. Christopher Dodd (D-CT) would strip the FTC of its power to enforce FDCPA and move those powers to a new bureau within the Federal Reserve.
“We are not running from regulation, we simply want an appropriate regulator,” the groups said in a joint statement. “The bureau, as proposed by Sen. Dodd, is geared toward banks and others depository institutions. The FTC is the appropriate venue for our industry. We understand Congress's intent to create a new bureau, and agree there is a need for fresh oversight in many areas. But the FTC has done a commendable job protecting the rights of consumers and bringing law enforcement action against outliers in our industry. Moving regulatory authority over the debt collection industry to a new bureau with unprecedented powers would neither help consumers nor businesses, creating uncertainty that would hinder effective compliance with existing regulations.
“And, ineffective regulation leads to unintended consequences that could damage the debt industry, which is critical to our nation’s economic and credit health.”
In support of the FTC, the four organizations reference several measures that the FTC has recently taken:
The FTC’s Debt Collection Workshop: The FTC conducted a workshop that served as a comprehensive overview of the accounts receivables management industry. The report from this workshop contained a slate of recommendations to the Congress to reform the FDCPA.
FTC’s Order for Information from Debt Buyers: The FTC called upon nine of the nation’s debt purchasing organizations to provide the commission with specific financial and operating information,
Major Settlements: The FTC continues to seek actions against firms charged with violations of FDCPA. As recently as earlier in March, the FTC announced another settlement resulting in a $1 million civil penalty
FTC’s Annual Report: Every year, the FTC issues a comprehensive annual report to Congress summarizing its findings with respect to its FDCPA enforcement activities. Most recently the FTC used the report to reiterate its call for reform and modernization of the FDCPA, now more than 30 years old.
The group concluded: “We are not seeking an easier regulator. Given the FTC’s specific expertise at governing the debt industry, and given how pre-occupied a new regulator would be addressing issues other than those from FDCPA, we are calling upon Congress to leave the industry’s regulatory powers with the FTC. The FTC is an effective protector of consumers’ interests when it comes to the FDCPA. There is no need to break up something that is already working effectively for the American people.”
