CFPB Reports Reveal Details About Debt Collection Regulation

The Consumer Financial Protection Bureau (CFPB) recently released two reports that shed a little light on how the Bureau is currently approaching debt collection regulation and provided a hint that any new debt collection rule proposals may be delayed well into 2015.

On Friday, the CFPB posted its Fall 2014 Rulemaking Agenda for public review. The ARM industry, of course, is eager to get any update on the CFPB’s proposed rules for the debt collection market.

Not much was revealed in the official announcement, with the CFPB noting that it is “considering whether rules governing the collection of debts are warranted under the FDCPA or other CFPB authorities, and, if so, what types of rules would be appropriate. Rulemaking might include disclosures or address acts or practices in connection with debt collection activities.” The Bureau also mentioned its proposed consumer survey, which is widely opposed by industry groups.

But on the actual rule portal for debt collection proposals, there is a significant timeline change that the debt industry should note. The time period for “prerule activities” has been extended to April 2015. Previously, the prerule activities period was slated to end in December 2014.

This could signal that the CFPB is anticipating a delay of at least one quarter in proposing new debt collection rules. And it’s important to note that the April 2015 date is not a deadline, rather, it is simply the expected end date of prerule activities.

On Monday, the CFPB Ombudsman’s Office released its annual report as well. The Office is “an independent, impartial, and confidential resource that assists consumers and companies in informally resolving issues with the CFPB.”

The Ombudsman office takes inquiries from everyone concerning their interactions with the CFPB. Principally, it is a clearinghouse for inquiries coming from industry groups, companies, attorneys, Congressional offices, and consumers. In Fiscal Year 2014, ended September 30, 2014, the office said it received 1,133 inquiries, down significantly from the 1,422 it fielded in FY 2013.

But almost all of that reduction was due to lower volumes of consumer inquiries. In fact, the report noted that when consumers were taken out of the equation, inquiries from other groups actually increased nine percent in FY 2014.

The report also discussed what the inquiries were about. In FY 2014, 48 percent of all inquiries were related to mortgages. That total was down significantly from FY 2013, when about 55 percent of inquiries pertained to mortgages. The next category, Credit Products, accounted for 22 percent, up only slightly from the year before.

The two categories that saw the largest jump, however, were Credit Reporting and Debt Collection. The report did not provide data; it merely included a graph comparing FY 2013 and 2014 inquiries by product category. It appears that Credit Reporting inquiries jumped to 10 percent of all inquiries from five percent the previous year. Similarly, Debt Collection inquiries appear to have accounted for about six percent of all inquiries in 2014 compared to one percent in 2013.