ACA Outlines Areas of Consideration for CFPB Rulemaking; Congressional Solutions in Advance of House Panel Hearing

ACA member firm, former CFPB student loan ombudsman among witnesses for House Financial Services Committee CFPB Semi-Annual Review hearing.

3/6/2019 3:00 PM

ACA Outlines Areas of Consideration for CFPB Rulemaking; Congressional Solutions in Advance of House Panel Hearing

In a letter to House Financial Services Committee leadership, ACA International CEO Mark Neeb reiterated the ARM industry’s willingness to work with the Consumer Financial Protection Bureau to develop common sense, transparent debt collection rules and to support some efforts aimed at reforming the bureau’s leadership structure and funding resources.

Neeb’s letter was sent to Committee Chairwoman Maxine Waters, D-Calif., and Ranking Member Patrick McHenry, R-N.C., in advance of CFPB Director Kathy Kraninger’s first appearance before the committee Thursday, March 7. Kraninger, along with other witnesses including ACA International member Scott Weltman, managing shareholder at Weltman, Weinberg, Reis Co., LPA, will testify before the committee in a hearing titled, “Putting Consumers First? A Semi-Annual Review of the Consumer Financial Protection Bureau.”

On behalf of the industry, Neeb’s letter outlines several areas for consideration as the bureau moves forward in crafting rules to guide the accounts receivable management industry as well as Congressional solutions to reform the bureau’s controversial leadership structure and its funding from the Federal Reserve.

“Notably, the accounts receivables management industry is one of the first industries to welcome new rules from the CFPB and has worked closely with the bureau since its inception on our shared goal of serving consumers,” Neeb wrote. “This is evidenced in the extensive compliance resources ACA members have developed and studied in line with bureau examination manuals and other materials, ongoing discussions and sharing of resources and data for bureau policymaking, collaboration on financial literacy projects, among many other undertakings.”

While the letter outlines support for the bureau’s mission of consumer protection it notes that, since its inception, there have been many instances when the bureau has failed to fulfill its statutory mission and obligations that require it to make markets for consumer financial products and services work in a fair, transparent, and competitive manner. Neeb specifically points to a lawsuit against the Weltman firm as an example of this failure.

Weltman, Weinberg, Reis Co., LPA was the subject of a CFPB lawsuit that was ultimately dismissed by the U.S. District Court for the Northern District of Ohio in 2017. The CFPB alleged that Weltman Weinberg’s attorneys were not meaningfully involved in reviewing consumer accounts but sent demand letters and made collection calls falsely representing that attorneys were involved in collecting the debts, however Ohio Judge Donald C. Nugent found the bureau’s lawsuit lacked merit.

Others scheduled to testify Thursday include:

  • Hilary Shelton, Director and Senior Vice President for Advocacy and Policy, National Association for the Advancement of Colored People;
  • Linda Jun, Senior Policy Counsel, Americans for Financial Reform;
  • Jennifer Davis, Government Relations Deputy Director, National Military Family Association; and
  • Seth Frotman, Executive Director, Student Borrower Protection Center. Frotman is the former student loan ombudsman for the CFPB.

In conjunction with the hearing, Chairwoman Waters issued a discussion draft of legislation, titled the “Consumers First Act,” cosponsored by 28 members of the committee. The proposal attempts to address concerns that the consumer bureau recently has not “fulfilled both the spirit and the plain letter of the law, according to a memorandum for the hearing.

The scheduling of the March 7 hearing also follows the release of the bureau’s semiannual report for April 1, 2018 to Sept. 30, 2018.  The semiannual report is the first issued by Kraninger, although it covered a period before the start of her term in December last year.

Kraninger is expected to face questions on her changes at the bureau and approach to leadership and regulations following the term of Acting Director Mick Mulvaney.

The Senate Committee on Banking Housing and Urban Affairs also recently announced it will conduct its hearing with the CFPB  “The Consumer Financial Protection Bureau’s Semi-Annual Report to Congress,” with Kraninger as a witness at 10 a.m. Eastern Tuesday, March 12.

Watch for ACA International’s coverage of these hearings in ACA Daily.

Read ACA International’s complete letter submitted to the committee.

Related Content from ACA International:

Democratic-Led House Panel to Question CFPB Director Kathy Kraninger

U.S. Rep. Maxine Waters to CFPB Employees: Actions to Weaken the Bureau ‘Will not go Unchecked or Unnoticed’

Rulemaking to Impact ARM Industry is Imminent, CFPB Director Kathy Kraninger's First Semiannual Report Reveals

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