In honor of the kick off of baseball season, here's a doubleheader blog about the Consumer Financial Protection Bureau.
Fair Debt Collection Practices
The CFPB has published its first annual report summarizing the Bureau’s administrative activities relating to the Fair Debt Collection Practices Act. Until this year, publication of this report had been the responsibility of the Federal Trade Commission since the Act was adopted in 1977.
The report does six things:
- Provides background on the FDCPA and the debt collection market;
- Summarizes the number and types of consumer complaints the FTC received in 2011;
- Describes the Bureau’s supervision program as it relates to debt collection;
- Presents recent developments in FTC law enforcement and the Bureau’s advocacy program;
- Discusses recent research and policy initiatives; and
- Discusses plans for coordination and cooperation between the Bureau and the FTC in the administration of the FDCPA.
The report discusses the Bureau’s recently proposed “larger participant” rulemaking, which would bring debt collectors with more than $10 million in annual receipts resulting from consumer debt collection within the ambit of the CFPB’s direct supervision. The Bureau estimates that the proposed rule will cover approximately 175 debt collection firms. These firms represent four percent of the population of debt collection firms and approximately 63 percent of annual receipts from the debt collection market. The comment period for this rulemaking closes on April 17, 2012.
The report also notes that the FTC brought seven debt collection cases, the highest number the agency has brought or resolved in a single year, and which resulted in the two largest civil penalty amounts obtained in alleged FDCPA violations.
Finally, the report highlights the cooperation and coordination between the Bureau and the FTC. Specifically, in January, the two agencies entered into a Memorandum of Understanding to coordinate efforts to protect consumers and avoid duplication of enforcement and regulatory efforts. This MOU will enable the Bureau and the FTC to work together to ensure fair and vigorous implementation of the FDCPA.
Sharing Complaints With The FTC
The Consumer Financial Protection Bureau (“CFPB”) recently announced it has started sharing its complaints with the Federal Trade Commission’s Consumer Sentinel and other state and federal agencies. Consumer Sentinel is an online database of consumer complaints maintained by the FTC that helps law enforcement track and respond to consumer complaints. The database is accessible only to law enforcement. The CFPB had previously signed an agreement with the FTC that allows the CFPB to access consumer complaints in the FTC’s database. Background on Consumer Sentinel is available at http://www.ftc.gov/sentinel/.
According to a CFPB blog post from their website, “[the] goal in sharing complaints with the FTC is to remove artificial barriers that stand in the way of efficient, transparent, and effective governance. By removing these barriers, we are encouraging agencies to work together to better protect American consumers. We are excited about our collaboration with the FTC, and we look forward to maintaining a close and fruitful partnership.” The CFPB’s announcement is available at: http://www.consumerfinance.gov/blog/consumer-response-now-sharing-complaints-with-ftc-consumer-sentinel/.
This level of inter-agency sharing of consumer complaint data among government agencies is not unprecedented, but for financial service providers – especially nonbank institutions – the sharing between the FTC and CFPB raises the potential for enforcement actions against companies with high levels of complaints. The CFPB has been taking complaints in categories of consumer financial products and services since its start in July 2011. The Bureau expects financial institutions to respond to complaints within 15 days and consumers are given tracking numbers to check on the status of their complaints.