What’s Next for Debt Collection Regulation and the CFPB? Thursday, December 8, 2016 www.cfed.org @CFED /CFEDNews cfed.org/blog/inclusiveeconomy
Presenters Anju Chopra Senior Policy Manager, Government Affairs CFED April Kuehnhoff Staff Attorney National Consumer Law Center (NCLC) www.cfed.org @CFED /CFEDNews cfed.org/blog/inclusiveeconomy
Housekeeping • All webinar attendees are muted to ensure sound quality. • Ask a question any time by typing the question into the text box of the control panel OR use the hands-up function. • If you experience any technical issues, email gotomeeting@cfed.org. www.cfed.org @CFED /CFEDNews cfed.org/blog/inclusiveeconomy
Webinar Content � Why Debt Collection is Important � Unpacking the CFPB Proposal for Regulating Debt Collection � Implications of the New Administration – The Future of the CFPB � Present and Future Engagement (Advocacy) � Consumer Rights www.cfed.org @CFED /CFEDNews cfed.org/blog/inclusiveeconomy
Payday Lending Advocacy Thank You ! www.cfed.org @CFED /CFEDNews cfed.org/blog/inclusiveeconomy
Why is this Issue Important? � 77 million Americans have debt in collections � One out of Every Three (35% of adults with credit files) � The Poorest (lowest quarter) Owe More than they make Image Courtesy of Lifehacker www.cfed.org @CFED /CFEDNews cfed.org/blog/inclusiveeconomy
High Complaint Levels � The number one complaint at The Consumer Financial Protection Bureau (CFPB) � More than credit cards, student loans, and payday lending, among others � More than 280,000 complaints received at FTC in 2014 � Nearly double the 2010 number www.cfed.org @CFED /CFEDNews cfed.org/blog/inclusiveeconomy
Top Complaints Received by the CFPB These are the top complaints received in 2015: 1. Debt Not Owed – Wrong person, debt already paid, etc. 2. How Collectors Contact Debtors (Communications) – Calling too often, calling at inconvenient places or times, threatening or abusive language, etc. 3. Disputes about Debt – Did not receive required written notice, did not receive adequate documentation, etc. www.cfed.org @CFED /CFEDNews cfed.org/blog/inclusiveeconomy
Authority for Debt Collection Regulations � Fair Debt Collection Practices Act (FDCPA) – 1977 � Limits debt collection practices � Dodd-Frank Wall Street Reform and Consumer Protection Act - 2010 � Created Consumer Financial Protection Bureau (CFPB) � CFPB Rulemaking Authority: o FDCPA o Unfair, Deceptive, and Abusive Acts or Practices 9 www.cfed.org @CFED /CFEDNews cfed.org/blog/inclusiveeconomy
Why Do We Need Regulations? � Clarify Certain Provisions in FDCPA � Modernize FDCPA � Rise of Debt Buying Industry � New Communication Technologies � Regulate First-Party Debt Collectors � Banks, Payday Lenders, Hospitals, etc. Collecting in their Own Names 10 www.cfed.org @CFED /CFEDNews cfed.org/blog/inclusiveeconomy
Rulemaking So Far Nov. 2013 Advanced Notice of Proposed Rulemaking Small Business Review Panel Outline July 2016 Debt Collectors Aug. 2016 Small Business Panel Meeting 11 www.cfed.org @CFED /CFEDNews cfed.org/blog/inclusiveeconomy
Rulemaking: Next Steps Small Business Review Panel Outline Creditors Early 2017? 2017? Proposed Rule 2018? Final Rule 12 www.cfed.org @CFED /CFEDNews cfed.org/blog/inclusiveeconomy
Outline – Debt Collectors � NOT a Proposed Rule! � Content may still change � Three Major Sections 1. Information Integrity 2. Consumer Understanding Initiatives 3. Collector Communication Practices 13 www.cfed.org @CFED /CFEDNews cfed.org/blog/inclusiveeconomy
Information Integrity � Pre-Collection � Fundamental Information, Warning Signs, Representations of Accuracy � During Collection � Ongoing Review for Warning Signs � Post-Dispute � Cease Collection and Review Key Documents � Pre-Litigation � Review Key Documents Before Filing Suit 14 www.cfed.org @CFED /CFEDNews cfed.org/blog/inclusiveeconomy
Information Integrity (Continued) � Transfer of Information to Subsequent Collectors � Unresolved Dispute, Servicemember Status, Deceased, etc. � Validation Notice � Require Additional Content in Notice and Statement of Rights � Provide Model � Translation Requirements � Credit Reporting � Prohibit “Parking” Debt 15 www.cfed.org @CFED /CFEDNews cfed.org/blog/inclusiveeconomy
Consumer Understanding Initiatives � Litigation Disclosure � Collector Intends to Sue, Consequences of Failing to Defend, and CFPB Resources � Time-Barred Debt � Prohibit Suits on Time-Barred Debt � Waiver of Revival � Require Disclosures o Debt is Time-Barred o Whether Time-Barred Debt Can Appear on Credit Reporting � Require Written Acknowledgment by Consumer 16 � If Debt Time-Barred and Credit Reporting Prohibited www.cfed.org @CFED /CFEDNews cfed.org/blog/inclusiveeconomy
Collector Communication Practices � Limited Content Messages � Exempt Certain Voicemail, Email, Text, and 3 rd Party Contacts from FDCPA � Limit Consumer Contacts � Maximum of 6 Attempted Contacts Per Consumer Per Account Per Week � Limit 3 rd Party Location Contacts � Maximum of 6 Attempted Contacts Per 3 rd Party Per Account Per Week 17 www.cfed.org @CFED /CFEDNews cfed.org/blog/inclusiveeconomy
Future Unclear for Debt Collection Rule � Trump Could Halt All Rulemaking � Leave Rulemaking in Limbo � Attacks on CFPB � Eliminate Agency � Defund � Eliminate Rulemaking Authority � Change Leadership Structure � Weaken Protections for Consumers with Debts in Collection � Through Rulemaking or FDCPA Amendments 18 www.cfed.org @CFED /CFEDNews cfed.org/blog/inclusiveeconomy
How to Ensure the CFPB is not Dismantled and Releases Strong Debt Collection Rules www.cfed.org @CFED /CFEDNews cfed.org/blog/inclusiveeconomy
What Can You Do Now? � Share Stories � Are citizens of your community willing to share their story? � We’d love to hear from them � Common Challenges � What common debt collection problems do people in your community face � Let us know! � Contact: achopra@cfed.org www.cfed.org @CFED /CFEDNews cfed.org/blog/inclusiveeconomy
Problems with Debt Collectors? Know Your Rights � Submit a Complaint to the CFPB � Online - http://www.consumerfinance.gov/data- research/consumer-complaints/ � By Phone - (855) 411-CFPB (2372) � Contact Your State Attorney General � www.naag.org/current-attorneys-general.ph www.cfed.org @CFED /CFEDNews cfed.org/blog/inclusiveeconomy
Where We Need Your Help - Future Advocacy � Support the CFPB � Multi-Level Advocacy � #ConsumersCantWait Campaign Rebranding & Expansion � Federal Advocacy � The Financial CHOICE Act � The Congressional Review Act � Prepare for Release of Proposed Rules � CFED will be commenting www.cfed.org @CFED /CFEDNews cfed.org/blog/inclusiveeconomy
Know Your Rights � Federal Law Protects Consumers from Unfair and Deceptive Collection Practices � Examples � Time and Place Restrictions (E.g. Before 8 am or after 9 pm) � Written Notice of the Debt is Required (within five days of initial contact) � Collector Must Stop Contacting a Consumer if Debt is Disputed in Writing Within 30 Days of Notice www.cfed.org @CFED /CFEDNews cfed.org/blog/inclusiveeconomy
Know Your Rights - Resources CFPB ‐ http://bit.ly/cfpbdebtcollection FTC ‐ http://bit.ly/ftcdebtcollection Consumer Information to Help Deal with Debt (FTC) ‐ http://bit.ly/ftcdealwithdebt www.cfed.org @CFED /CFEDNews cfed.org/blog/inclusiveeconomy
Additional Resources � CFED – www.cfed.org � NCLC - www.nclc.org/issues/debt-collection.html � Center for Responsible Lending (CRL) - www.responsiblelending.org/issues/debt-collection-settlement � Fix Debt Collection - www.fixdebtcollection.com/ www.cfed.org @CFED /CFEDNews cfed.org/blog/inclusiveeconomy
Questions? www.cfed.org @CFED /CFEDNews cfed.org/blog/inclusiveeconomy
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