The Consumer Financial Protection Bureau (CFPB) released proposals it is considering for a Small Business Review panel on debt collection Thursday. It is also holding a field hearing at 11 a.m. (PT) in conjunction with the release in Sacramento, Calif.
While the proposals released today are aimed at third-party debt collectors, CUNA is in the process of reviewing the proposals for any potential credit union impact.
In its proposal the CFPB states that, “The bureau expects to convene a second proceeding in the next several months for creditors and others engaged in collection activity who are covered persons under the Dodd-Frank Act but who may not be ‘debt collectors’under the Fair Debt Collection Practices Act (FCDPA) Practices. The bureau believes that holding separate Small Business Regulatory Enforcement Fairness Act (SBREFA) consultation processes is the most efficient way to proceed, particularly because it will enable participants to provide more focused and specific insights.”
CUNA has urged the CFPB to distinguish between credit unions and third-party debt collectors.
The SBREFA requires that if the CFPB finds a proposed rule is likely to have a significant impact on a substantial number of small entities, it must analyze the impact on the small businesses affected. The CFPB expects to convene a SBREFA panel in August, and the panel has 60 days to send recommendations to the bureau, which it will take into account before issuing proposed rules.
“We appreciate that the CFPB has recognized that there are very significant differences between for-profit debt collectors and non-profit credit union first-party creditors, and has acknowledged that Congress purposely excluded first-party creditors from the FCDPA,” said Ryan Donovan, CUNA’s chief advocacy officer. “We are reviewing today's proposal for any impact it may have on credit union operations or relationships with third parties for the thousands of small credit unions, and will be providing the CFPB with feedback on all aspects of this, or any other future proposals, concerning debt collection.”
The proposals are aimed at ensuring debt collectors:
The CFPB also released a report, “Study of Third-Party Debt Collection Operations” in conjunction with the proposals.