Helping Consumers: ACA Outlines Members’ Role in Promoting Access to Credit in Comments to CFPB

The bureau recently accepted comments on Regulation B and the Equal Credit Opportunity Act and creating a regulatory environment that expands access to credit for consumers.

12/3/2020 11:30 AM

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Helping Consumers: ACA Outlines Members’ Role in Promoting Access to Credit in Comments to CFPB

ACA International’s members have helped consumers navigate their financial situations on increased level this year due to the challenges of the COVID-19 pandemic—often on calls initiated by consumers.

ACA shared this trend in recent comments to the Consumer Financial Protection Bureau on its Request for Information on how to create a regulatory environment that expands access to credit and ensures that all consumers and communities are protected from discrimination in all aspects of a credit transaction.

The CFPB’s request on Regulation B and the Equal Credit Opportunity Act focused on actions it can take or should consider taking to prevent credit discrimination, encourage responsible innovation, promote fair, equitable and nondiscriminatory access to credit, address potential regulatory uncertainty and develop viable solutions to regulatory compliance challenges.

In its comments to the bureau, ACA focused on how the ability to collect plays an important role in access to credit.

“Lenders rely on the ability to collect to be able to lend to consumers of all means with diverse financial backgrounds. In a world without a collections process, there would likely be no credit cards or other extensions of unsecured credit, and in many instances, consumers would only have the option to pay cash,” said Vice President and Senior Counsel of Federal Advocacy Leah Dempsey. “This would be a disadvantage to many consumers, particularly to those that are low-income, and significantly limit options for credit and services. The work of ACA members allows lenders to continue to lend and keeps the cost of credit down, particularly for the riskiest borrowers.”

When the COVID-19 pandemic hit this year, ACA members played an important role in helping consumers understand their options for resolving legally owed debt.

“When there is an option for dialogue, ACA members can help consumers understand how they may qualify for options like financial assistance,” Dempsey said.

ACA’s comments also note how the bureau’s final rule on debt collection and its recognition of consumers’ preferences for modern communication methods is an important step in putting consumers in the collections process on a level playing field with others in the financial services marketplace.

“We applaud the bureau for recognizing that consumers in collections also deserve options, including the ability to communicate in modern ways,” Dempsey said. “We look forward to working to further improve this process, so that both consumers and the industry have clear rules of the road when using commonly used technologies, and so that consumers in all parts of the credit ecosystem are treated equally.”

The bureau’s request for comment also provided the opportunity to address the role of small businesses in supporting their local communities and the importance of access to credit for businesses. Many ACA members are small businesses and support small-business clients such as medical providers and community financial institutions.

As the bureau continues to work on ECOA and Regulation B, ACA encourages it to look at the impact of Operation Choke Point, which cut off banking services to many small businesses in the accounts receivable management industry.

“We urge the CFPB to work with its fellow regulators to investigate practices of unfair banking terminations and act to ensure that rogue examiners and certain regulators cannot pick and choose winners and losers in the marketplace and base decisions on their own ideology,” Dempsey said.

A new proposed rule announced by the Office of the Comptroller of the Currency (OCC) would ensure fair access to banking services for several industries—including debt collection—previously cut off during the controversial Obama-era program Operation Choke Point, ACA previously reported. Comments on the OCC rule are due on or before Jan. 4. ACA will be submitting comments and encourages members to share their feedback with the OCC. If you would like to share your feedback to inform ACA’s comments, contact Leah Dempsey at dempsey@acainternational.org.


Follow ACA International on Twitter @ACAIntl and @acacollector, Facebook and request to join our LinkedIn group for news and event updates. ACA International members are welcome to submit news items for possible publication to comm@acainternational.org. Visit our publications page for news submission guidelines and subscriptions to ACA Daily, Collector magazine and Pulse.

Advertising is available for companies wishing to promote their products or services. Be sure to visit the ACA Events Calendar on the Education and Training page to view our listing of upcoming CORE Curriculum and Hot Topic seminars featuring critical educational opportunities for your company.


Subscribe to ACA Daily NEWSROOM

Helping Consumers: ACA Outlines Members’ Role in Promoting Access to Credit in Comments to CFPB

ACA International’s members have helped consumers navigate their financial situations on increased level this year due to the challenges of the COVID-19 pandemic—often on calls initiated by consumers.

ACA shared this trend in recent comments to the Consumer Financial Protection Bureau on its Request for Information on how to create a regulatory environment that expands access to credit and ensures that all consumers and communities are protected from discrimination in all aspects of a credit transaction.

The CFPB’s request on Regulation B and the Equal Credit Opportunity Act focused on actions it can take or should consider taking to prevent credit discrimination, encourage responsible innovation, promote fair, equitable and nondiscriminatory access to credit, address potential regulatory uncertainty and develop viable solutions to regulatory compliance challenges.

In its comments to the bureau, ACA focused on how the ability to collect plays an important role in access to credit.

“Lenders rely on the ability to collect to be able to lend to consumers of all means with diverse financial backgrounds. In a world without a collections process, there would likely be no credit cards or other extensions of unsecured credit, and in many instances, consumers would only have the option to pay cash,” said Vice President and Senior Counsel of Federal Advocacy Leah Dempsey. “This would be a disadvantage to many consumers, particularly to those that are low-income, and significantly limit options for credit and services. The work of ACA members allows lenders to continue to lend and keeps the cost of credit down, particularly for the riskiest borrowers.”

When the COVID-19 pandemic hit this year, ACA members played an important role in helping consumers understand their options for resolving legally owed debt.

“When there is an option for dialogue, ACA members can help consumers understand how they may qualify for options like financial assistance,” Dempsey said.

ACA’s comments also note how the bureau’s final rule on debt collection and its recognition of consumers’ preferences for modern communication methods is an important step in putting consumers in the collections process on a level playing field with others in the financial services marketplace.

“We applaud the bureau for recognizing that consumers in collections also deserve options, including the ability to communicate in modern ways,” Dempsey said. “We look forward to working to further improve this process, so that both consumers and the industry have clear rules of the road when using commonly used technologies, and so that consumers in all parts of the credit ecosystem are treated equally.”

The bureau’s request for comment also provided the opportunity to address the role of small businesses in supporting their local communities and the importance of access to credit for businesses. Many ACA members are small businesses and support small-business clients such as medical providers and community financial institutions.

As the bureau continues to work on ECOA and Regulation B, ACA encourages it to look at the impact of Operation Choke Point, which cut off banking services to many small businesses in the accounts receivable management industry.

“We urge the CFPB to work with its fellow regulators to investigate practices of unfair banking terminations and act to ensure that rogue examiners and certain regulators cannot pick and choose winners and losers in the marketplace and base decisions on their own ideology,” Dempsey said.

A new proposed rule announced by the Office of the Comptroller of the Currency (OCC) would ensure fair access to banking services for several industries—including debt collection—previously cut off during the controversial Obama-era program Operation Choke Point, ACA previously reported. Comments on the OCC rule are due on or before Jan. 4. ACA will be submitting comments and encourages members to share their feedback with the OCC. If you would like to share your feedback to inform ACA’s comments, contact Leah Dempsey at dempsey@acainternational.org.


Follow ACA International on Twitter @ACAIntl and @acacollector, Facebook and request to join our LinkedIn group for news and event updates. ACA International members are welcome to submit news items for possible publication to comm@acainternational.org. Visit our publications page for news submission guidelines and subscriptions to ACA Daily, Collector magazine and Pulse.

Advertising is available for companies wishing to promote their products or services. Be sure to visit the ACA Events Calendar on the Education and Training page to view our listing of upcoming CORE Curriculum and Hot Topic seminars featuring critical educational opportunities for your company.


Subscribe to ACA Daily NEWSROOM

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