CFPB’s Kraninger: Debt Collection Rules Will Provide Clarity on Modern Communication Methods

Proposed rules will be released in coming weeks; director says in remarks at Bipartisan Policy Center roundtable.

4/17/2019 2:30 PM

CFPBNews
CFPB’s Kraninger: Debt Collection Rules Will Provide Clarity on Modern Communication Methods

Consumer Financial Protection Bureau Director Kathy Kraninger provided insight on the pending debt collection rulemaking, particularly how the rules could be updated to address use of modern communication including email and text messages during a speech, “The Next Phase of the CFPB,” at the Bipartisan Policy Center April 17.

Kraninger’s remarks and comments on the pending rule address the “quick fixes” to remedy some of the outdated and onerous interpretations the FDCPA developed by ACA International.

The director suggested that the proposed rules would furnish consumers with clear expectations of appropriate industry conduct, while providing the accounts receivable management industry a clear roadmap to avoid frivolous litigation based upon unclear standards.

“Under my leadership, the CFPB will proceed deliberately and transparently in its rulemakings,” Kraninger said at the April 17 event. “In the coming weeks the bureau will release proposed rules to implement the Fair Debt Collection Practices Act.

Though there have been many advances in communications technologies since 1977, the FDCPA has not been updated to reflect our use of these technologies. The bureau will propose clarifying rules to better enable the use of modern communications technology in collections activity.”

Kraninger also noted the proposed rules would include a clear bright line on the number of calls a consumer may receive from debt collectors on a weekly basis.

Additionally, she stated, “We will propose to provide clarity on how collectors may communicate via newer technologies such as email or text messages.”

In an interview with The Washington Post (a subscription may be required to view the article) following the event, ACA International’s Vice President and Senior Counsel of Federal Advocacy Leah Dempsey explained the ARM industry’s outlook for the rule.

The industry wants “clear lines of what we should be doing and not doing,” Dempsey told reporter Renae Merle.

Providing a glimpse at the future rule, Kraninger also focused on clarification on disputes in her remarks.

The bureau will propose in the rules for collectors to “provide consumers with more and better information at the outset of collection to help them identify their debts and understand their options including their rights in disputing debts or paying them.”

She stressed the bureau’s interest in stakeholder input as it proceeds with the proposed rulemaking and modernizing the “legal regime for debt collection.”

“We are keenly interested in the views of stakeholders and look forward to engagement with you. Given the prospective nature of rules combined with the unpredictable nature and pace of change in technologies … it is imperative that the CFPB be vigilant in evaluating the rules that the agency has issued. Under the Dodd-Frank Act, within five years of a significant rule, the CFPB must submit a report assessing the effectiveness of the rule in meeting the purpose and objectives of Title X and the goals stated by the bureau.”

Going forward, Kraninger said she takes the bureau’s responsibility to reduce unwarranted regulatory burden on regulated entities seriously; in addition to considering the impact of rulemaking on those entities and consumers as well as enforcement action processes.

“To develop the best possible rules, the CFPB must use the best possible process,” Kraninger said. “Because rules are general standards, they are not best articulated on a case-by-case basis through enforcement actions, rather they should be developed through a rulemaking process that is transparent.”

‘A Kathy Kraninger CFPB’

Following her remarks on the next phase of the CFPB, Kraninger further addressed her course of action at the bureau in the footsteps of her predecessors Richard Corday and Mick Mulvaney.

“What is your overarching goal for a Kathy Kraninger CFPB?” asked moderator Peter Schroeder, financial regulation correspondent, Reuters.

“He and I agree completely that we have very different responsibilities and goals as we approach this job,” Kraninger said about the transition from Mulvaney as acting director at the bureau to her leadership in December. “I am in the place now as a permanent director with a five-year term.”

It’s also a goal for Kraninger to move the bureau away from partisan politics, she explained in discussion with Schroeder.

“I do think that process is one of the ways you do that. It really is about how you make sure that people understand where they can influence [and] that they can influence. I am focused on managing the institution to conduct the mission that Congress gave us.”

While “a lot of things that can happen between month four and year five,” Kraninger said she intends to complete her five-year term and focus on evaluating the bureau’s processes, including collection of data and tracking consumer complaints.

“All too often, agencies can adjust themselves by their outputs, for example how many complaints did they handle, how many cases did they bring [in], how much money did they recover, but what do these metrics truly mean for the consumer financial system overall? If we succeed in fostering a culture of compliance and preventing [consumer] harm, we would expect the number of complaints to decline.”

Kraninger announced the bureau will hold a listening symposium series in the coming years, the first topic being clarifying the meaning of “deceptive acts or practices” under the Dodd-Frank Act.

Congress gave the bureau authority to protect consumers from unfair, deceptive, or abusive acts or practices (UDAAP.)

While the statute defines abusive, some clarification particularly with regard to “reasonableness standards” may be useful, Kraninger said.

When the CFPB releases its proposed debt collection rules, ARM professionals will rely on ACA International for valuable analyses. Updates and information will be published in ACA’s Daily e-newsletter. Click the link to easily subscribe.

In the meantime, ACA International members may learn more about the pending FDCPA rule through a recording of a Hot Topic Seminar with valuable insights from Vice President and Senior Counsel Karen Scheibe Eliason, CEO Mark Neeb and Vice President and Senior Counsel of Federal Advocacy Leah Dempsey.

Also, registration remains open to join ACA leaders and advocacy staff May 14-16 in Washington, D.C., for the annual Washington Insights Fly-In to discuss legislative and regulatory issues and hear remarks from members of Congress and regulators. Tom Pahl, policy director for research, markets and regulation at the CFPB, will speak at the event.

Pictured above, Peter Schroeder, Financial Regulation Correspondent with Reuters, discusses debt collection rulemaking with CFPB Director Kathy Kraninger.


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

CFPB’s Kraninger: Debt Collection Rules Will Provide Clarity on Modern Communication Methods

Consumer Financial Protection Bureau Director Kathy Kraninger provided insight on the pending debt collection rulemaking, particularly how the rules could be updated to address use of modern communication including email and text messages during a speech, “The Next Phase of the CFPB,” at the Bipartisan Policy Center April 17.

Kraninger’s remarks and comments on the pending rule address the “quick fixes” to remedy some of the outdated and onerous interpretations the FDCPA developed by ACA International.

The director suggested that the proposed rules would furnish consumers with clear expectations of appropriate industry conduct, while providing the accounts receivable management industry a clear roadmap to avoid frivolous litigation based upon unclear standards.

“Under my leadership, the CFPB will proceed deliberately and transparently in its rulemakings,” Kraninger said at the April 17 event. “In the coming weeks the bureau will release proposed rules to implement the Fair Debt Collection Practices Act.

Though there have been many advances in communications technologies since 1977, the FDCPA has not been updated to reflect our use of these technologies. The bureau will propose clarifying rules to better enable the use of modern communications technology in collections activity.”

Kraninger also noted the proposed rules would include a clear bright line on the number of calls a consumer may receive from debt collectors on a weekly basis.

Additionally, she stated, “We will propose to provide clarity on how collectors may communicate via newer technologies such as email or text messages.”

In an interview with The Washington Post (a subscription may be required to view the article) following the event, ACA International’s Vice President and Senior Counsel of Federal Advocacy Leah Dempsey explained the ARM industry’s outlook for the rule.

The industry wants “clear lines of what we should be doing and not doing,” Dempsey told reporter Renae Merle.

Providing a glimpse at the future rule, Kraninger also focused on clarification on disputes in her remarks.

The bureau will propose in the rules for collectors to “provide consumers with more and better information at the outset of collection to help them identify their debts and understand their options including their rights in disputing debts or paying them.”

She stressed the bureau’s interest in stakeholder input as it proceeds with the proposed rulemaking and modernizing the “legal regime for debt collection.”

“We are keenly interested in the views of stakeholders and look forward to engagement with you. Given the prospective nature of rules combined with the unpredictable nature and pace of change in technologies … it is imperative that the CFPB be vigilant in evaluating the rules that the agency has issued. Under the Dodd-Frank Act, within five years of a significant rule, the CFPB must submit a report assessing the effectiveness of the rule in meeting the purpose and objectives of Title X and the goals stated by the bureau.”

Going forward, Kraninger said she takes the bureau’s responsibility to reduce unwarranted regulatory burden on regulated entities seriously; in addition to considering the impact of rulemaking on those entities and consumers as well as enforcement action processes.

“To develop the best possible rules, the CFPB must use the best possible process,” Kraninger said. “Because rules are general standards, they are not best articulated on a case-by-case basis through enforcement actions, rather they should be developed through a rulemaking process that is transparent.”

‘A Kathy Kraninger CFPB’

Following her remarks on the next phase of the CFPB, Kraninger further addressed her course of action at the bureau in the footsteps of her predecessors Richard Corday and Mick Mulvaney.

“What is your overarching goal for a Kathy Kraninger CFPB?” asked moderator Peter Schroeder, financial regulation correspondent, Reuters.

“He and I agree completely that we have very different responsibilities and goals as we approach this job,” Kraninger said about the transition from Mulvaney as acting director at the bureau to her leadership in December. “I am in the place now as a permanent director with a five-year term.”

It’s also a goal for Kraninger to move the bureau away from partisan politics, she explained in discussion with Schroeder.

“I do think that process is one of the ways you do that. It really is about how you make sure that people understand where they can influence [and] that they can influence. I am focused on managing the institution to conduct the mission that Congress gave us.”

While “a lot of things that can happen between month four and year five,” Kraninger said she intends to complete her five-year term and focus on evaluating the bureau’s processes, including collection of data and tracking consumer complaints.

“All too often, agencies can adjust themselves by their outputs, for example how many complaints did they handle, how many cases did they bring [in], how much money did they recover, but what do these metrics truly mean for the consumer financial system overall? If we succeed in fostering a culture of compliance and preventing [consumer] harm, we would expect the number of complaints to decline.”

Kraninger announced the bureau will hold a listening symposium series in the coming years, the first topic being clarifying the meaning of “deceptive acts or practices” under the Dodd-Frank Act.

Congress gave the bureau authority to protect consumers from unfair, deceptive, or abusive acts or practices (UDAAP.)

While the statute defines abusive, some clarification particularly with regard to “reasonableness standards” may be useful, Kraninger said.

When the CFPB releases its proposed debt collection rules, ARM professionals will rely on ACA International for valuable analyses. Updates and information will be published in ACA’s Daily e-newsletter. Click the link to easily subscribe.

In the meantime, ACA International members may learn more about the pending FDCPA rule through a recording of a Hot Topic Seminar with valuable insights from Vice President and Senior Counsel Karen Scheibe Eliason, CEO Mark Neeb and Vice President and Senior Counsel of Federal Advocacy Leah Dempsey.

Also, registration remains open to join ACA leaders and advocacy staff May 14-16 in Washington, D.C., for the annual Washington Insights Fly-In to discuss legislative and regulatory issues and hear remarks from members of Congress and regulators. Tom Pahl, policy director for research, markets and regulation at the CFPB, will speak at the event.

Pictured above, Peter Schroeder, Financial Regulation Correspondent with Reuters, discusses debt collection rulemaking with CFPB Director Kathy Kraninger.


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

Loading...

Loading...

Scroll to Top