CFPB Proposed Debt Collection Rules Release: First Thoughts from Industry Professionals

CFPB Proposed Debt Collection Rules Release: First Thoughts from Industry Professionals

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Just one day after the Consumer Financial Protection Bureau (CFPB) Debt Collection Town Hall, and two days after the Bureau released its proposed new rules, hosted a panel of trusted ARM industry professionals to discuss first impressions of the CFPB proposed debt collection rules, and where we go from here.

Rozanne Andersen, Vice President and Chief Compliance Officer at Ontario Systems, Joann Needleman, Leader Clark Hill PLC, Consumer Financial Services Regulatory & Compliance Group, and John Bedard of the Bedard Law Group, P.C. shared their thoughts on the CFPB proposed debt collection rules and why this is only the beginning of a new chapter for the credit and collection industry.

Opening Thoughts on the Proposed Debt Collection Rule

To begin the webinar, each panelist shared what they felt was important to understand going into this long process. The rule release is causing confusion among many about what the news means and where and how it will be implemented. As such, Andersen wanted listeners to understand what exactly the CFPB proposed rule is.

The new rule proposal is an explanation of how the CFPB proposes to interpret an existing law (the FDCPA). Needleman echoed this sentiment and wanted people to know the rule proposal is also not a repeal of the current FDCPA. While the proposed rules may have big implications for the debt collection industry, nothing has been finalized. Agencies must continue to follow the law as it currently is known.  

Bedard’s opening thoughts centered on the implications the proposed rules will have for the industry going forward. “We’re being given new tools to advance the industry by decades.” He thinks the proposed rule will allow agencies to adapt to the changing technological landscape and the industry should be ready to embrace the coming shift.

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A Pleasant Surprise

The aim when collecting a debt is effectively communicating with consumers. This goal has gotten more and more difficult with the advent of cell phones, electronic mail and other new technologies. Needleman noted surprise at the deliberate way the rule proposal looks to address these communication issues.

All three panelists expressed surprise at the level of thought the proposed debt collection rule contained overall. The detailed nature of the sections was more than any of the experts expected. The document also addressed many major issues the industry has been requesting clarity on for years and recognized the important role of debt collection in the credit cycle.

For Further Review

It's important to keep in mind that this is only the beginning of the news about the proposed rule. The document is more than 500 pages long, and can not be fully understood in a single reading. A few of the sections discussed in the webinar that will require closer review:

  • Call Caps
  • Limited Content Messages
  • Validation Notices

What Should Collectors Do Next?

Bedard reiterated advice he gave earlier this week in anticipation of the rule release:

Don't Panic!John Bedard

However, Needleman did stress the importance of industry-wide participation of the forthcoming 90-day comment period. Clarity and detail included in the rule would benefit both collectors and consumers. However, many consumer advocates don’t believe the rule will add value for the public.

There are very few times in our businesses and our industry in which we really have the opportunity to shape the law,” says Bedard “Now is one of those times. I encourage folks to learn something about what the bureau is proposing, and make a comment on it. What happens now has the potential to be the law for many, many years.”

In order to match the voices of the entire public that might speak out, submit comments of your own to let the CFPB know how the proposed rules will impact your agency.

For continuing information on the new debt collection rules and other factors impacting the accounts receivable industry, subscribe to the PDCflow Blog.

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