CFPB Rule Would Increase Oversight Over Debt Collectors
A newly proposed rule from the Consumer Financial Protection Bureau (CFPB) seeks to curb the increase in consumer complaints regarding debt collectors and credit bureaus by placing them under federal supervision.
According to McClatchy Newspapers, the proposed rule would require debt collectors and credit bureaus (such as Experian, Equifax, and TransUnion) to be subjected to the same federal oversight that banks must work under. About 175 debt-collection agencies and 30 credit-reporting agencies would be subject to the new regulations. Each group of agencies hold more than $10 million and $7 million in annual collection receipts, respectively.
"Consumer financial products and services have become more complex over the years and they have expanded well beyond traditional banks," said Richard Cordray, the director of the CFPB. "This oversight would help restore confidence that the federal government is standing beside the American consumer."
The CFPB received a record 11,811 federal consumer lawsuits under the Fair Debt Collection Practices Act in 2011 that complained of bill collectors making illegal contact or being overly aggressive with consumers. In 2007 only 4,372 lawsuits were filed