This is a guest blog post from ACA International.
Big changes are coming soon for the collection industry as the Consumer Financial Protection Bureau (CFPB) moves ahead with its non-bank supervision program, rulemaking and enforcement role, which will include examinations for “large market” debt collectors, asset buyers and law firms involved in debt collection.
In February, the CFPB proposed a rule defining large market participants as third-party debt collectors and asset buyers with more than $10 million in annual receipts (defined as “total income” plus “cost of goods sold”). ACA International submitted comments and supplemental comments offering suggestions addressing discrepancies, inconsistencies and problems with the CFPB’s proposed rule. The bureau must issue a final rule by July 21, 2012, with examinations expected to begin shortly after the rule becomes final.
Regardless of size, any debt collector or asset buyer that acts as a service provider by collecting debt may be subject to a CFPB examination. A catch-all provision in the Dodd-Frank Act also allows the bureau to examine a company based on complaints or information received from outside sources. Under this provision, if the CFPB believes a company is engaged in conduct that poses a risk to consumers, then they may conduct an examination of the company.
According to regulatory experts, in order to successfully pass a CFPB exam companies will need to have clear policies, procedures and training in place that meet the bureau’s standards.
It’s expected that the CFPB will take two actions that distinguish them from other compliance examinations familiar to debt collectors and asset buyers:
By the end of 2012, the bureau also plans to launch a portal to collect consumer complaints against debt collectors and asset buyers. Unlike the Federal Trade Commission’s annual tally of complaints, the CFPB will likely create a complaint resolution model.
It’s imperative that companies under the CBPB’s supervision stay informed on happenings at the bureau. ACA will continue to carefully monitor CFPB rulemaking, proposed rulemaking and other activities. For more information, please visit www.acainternational.org.
This article was written by Patrick Morris