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Kathleen Kraninger, director of the Consumer Financial Protection Bureau (CFPB), recently spent months on a “listening tour” to get an inside look at the credit and collection industry. Based on her findings, the CFPB has created proposed rules intended to clarify regulations and address advances in technology that have altered the industry landscape in recent years.
There is no news on when these proposed rules may be released. However, the Bureau has scheduled a Debt Collection Town Hall meeting in Philadelphia on May 8th. The timing of the announcement has led many experts to speculate the proposed rule release will coincide with this Town Hall.
What Will The Rule Cover?
Kraninger addressed the proposed rule to implement the Fair Debt Collection Practices Act (FDCPA) during a speech on April 17 at the Bipartisan Policy Center. During the speech, she stated the need for clarity around the use of technology in collections, to aid both collectors and consumers.
The rules are also expected to limit the number of calls consumers may receive per week and require agents to provide more information to consumers during collection call outsets.
How Will This Impact Collectors?
Assuming the rules go forward, they are likely to clarify unresolved industry issues. The FDCPA implementation would better explain the role of new technologies like text messaging and email in consumer contact. Further explanation would simplify debt collection processes and speed up account resolution.
If these rules are accepted, new weekly call limits and call outset information requirements will also cause widespread policy and procedure reviews. It will be vital for collection agencies to determine where their current rules need to be adjusted.
However, the proposed rule release doesn’t guarantee any of these new issues will take effect. “Proposed rules are generally published to give industry, consumers, and other external stakeholders an opportunity to comment on their potential impact,” according to the CFPB. Meaning, after they are made public, industry advocacy is crucial to ensure clarifying rules become permanent.
Reactions From The Public
Clear rules to help legally collect debts will allow industry experts to stay compliant. They are a positive step toward addressing how new technology will benefit consumers (especially younger generations) who prefer to communicate through text and email.
However, consumer advocate groups are wary of the recent rules announcement. In a Washington Post article on the CFPB’s new rules, Christine Hines, legislative director of the National Association of Consumer Advocates said, “consumer privacy should be a key concern for the CFPB.”
Addressing this concern is the top priority for advocates like Hines. Whatever the proposed rules contain, consumer groups will likely share their opinions in droves (opinions that could outnumber industry voices).
What Industry Participants Must Do
When the rules are released, it is imperative that industry participants speak up. Consumer advocates have the public’s best interest in mind, but credit and collection professionals care about consumers too. Along with this empathy, collectors are in a unique position to help change lives, one account at a time.
The debt collection industry already struggles with a negative image. Earlier this year, Harry Strausser III, director of Education for ACA International even gave a speech at Collector Live entitled “Being amazing when the rest of the world hates you.” Those looking in from the outside may not understand–compassionate professionals who want to make a difference outweigh the bad actors.
To enact positive, lasting change (for both collectors and consumers) debt collectors must take advantage of this rare opportunity to share your knowledge. Raise your voice by submitting comments with the CFPB.
For updates on the CFPB proposed rules when they are released, and other educational debt collection industry content, subscribe to the PDCflow blog.