Congress and the CFPB: Supervision and Enforcement Clarity Debated on Capitol Hill

House Financial Services Committee Hearing on CFPB Director Kathy Kraninger’s semiannual report homes in on bureau’s mission and approach to regulation and enforcement actions.c

2/6/2020 8:00 AM

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Congress and the CFPB: Supervision and Enforcement Clarity Debated on Capitol Hill

The January Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) policy statement from the Consumer Financial Protection Bureau could be the jumping off point for a possible rulemaking, but right now the bureau is focused on engagement with stakeholders, consumer education and clear rules of the road for businesses, Director Kathy Kraninger said during discussions with the House Financial Services Committee Thursday.

The UDAAP policy statement served as a platform during the hearing, “Protecting Consumers or Allowing Consumer Abuse? A Semiannual Review of the Consumer Financial Protection Bureau,” to discuss former CFPB Director Richard Cordray’s approach to the same issue and general leadership and how the CFPB will address pending cases with the policy in place.

The policy statement provides sought after clarifications for the accounts receivable management industry, a focus of ACA International’s advocacy and a letter issued before the hearing.

Some members on the committee thought the policy statement went too far and will lessen the bureau’s enforcement; some not far enough.

Kraninger sought to clarify their concerns.

“What I am seeking to do with the policy statement is make sure that we clarify abusiveness and separate it from deceptive and unfairness because Congress explicitly gave us those three authorities to determine those kinds of acts and practices separately or provide claims to the courts to allow them to do that,” Kraninger said. “In no way should that policy be read to say that we would not bring abusiveness claims.”

In a discussion with U.S. Rep. Bryan Steil, R-Wis., Kraninger also clarified that the bureau reviewed past claims when creating the new policy; but hasn’t amended previous claims and doesn’t intend to at this point.

The UDAAP policy statement leaves open the option for the bureau to propose a rulemaking, Kraninger said in an exchange with U.S. Rep. Andy Barr, R-Ky., but at this point the focus is on more engagement with stakeholders.

“I do still think there is a lot of work to do to have clear rules of the road,” Barr said.

Don’t miss the Feb. 27 Core Curriculum, Keep Calm and Prevent UDAAP, for more information and guidance on the policy statement and to review established federal guidelines for UDAAP.

ACA’s letter for the hearing also addresses support for Congress’s directive in the Dodd-Frank Act for the CFPB to provide regulations for the Fair Debt Collection Practices Act; how the CFPB’s complaint database paints an inaccurate portrait of the debt collection industry; and flawed congressional solutions proposed by the House Financial Services Committee.

Clear and Common-Sense Reforms

“We are hopeful that Congress can put partisan views aside and work together with the CFPB to make common-sense reforms to the outdated FDCPA,” said ACA International CEO Mark Neeb after the hearing. “Unfortunately, many debt collection bills introduced last year in the House Financial Services Committee seek to impede communications between consumers and collectors. This is concerning because significant research has proven that limiting communication is not a consumer benefit, because consumers then do not have the financial information they need to address and improve their situations.”

Kraninger addressed the debt collection rulemaking in her written testimony and during the hearing.

“While we are moving forward with rulemaking, we would welcome legislation through which Congress could better weigh the important policy objectives at issue,” Kraninger said in her testimony. “The bureau is evaluating the comments, weighing the evidence, and will make its decision in accordance with applicable legal requirements, including the [Administrative Procedures Act.]”

Kraninger stressed the bureau is carrying out its mission to protect consumers through education, regulation, supervision and enforcement despite disagreement from the committee.

“Regulation, again, and supervision are around [for] setting up clarity in the rules so that entities that are engaged in financial services understand their responsibilities and are providing consumers with the information that they need,” she said. “There are clearly bad actors in the system, and we will go after them, but we clearly have a difference of opinion regarding how the mission should be carried out.”

Hearing discussions also included the ongoing issue of the constitutionality of the bureau’s leadership structure, due for U.S. Supreme Court oral arguments in Seila Law v. Consumer Financial Protection Bureau March 3; the recent Memorandum of Understanding with the U.S. Department of Education; and the small-dollar lending rule.

ACA will continue to help members succeed and engage with Congress on the industry issues discussed during the hearing, including through the Senate Banking, Housing and Urban Affairs Committee’s semiannual review of the bureau with testimony from Kraninger, which has not been scheduled.


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

Congress and the CFPB: Supervision and Enforcement Clarity Debated on Capitol Hill

The January Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) policy statement from the Consumer Financial Protection Bureau could be the jumping off point for a possible rulemaking, but right now the bureau is focused on engagement with stakeholders, consumer education and clear rules of the road for businesses, Director Kathy Kraninger said during discussions with the House Financial Services Committee Thursday.

The UDAAP policy statement served as a platform during the hearing, “Protecting Consumers or Allowing Consumer Abuse? A Semiannual Review of the Consumer Financial Protection Bureau,” to discuss former CFPB Director Richard Cordray’s approach to the same issue and general leadership and how the CFPB will address pending cases with the policy in place.

The policy statement provides sought after clarifications for the accounts receivable management industry, a focus of ACA International’s advocacy and a letter issued before the hearing.

Some members on the committee thought the policy statement went too far and will lessen the bureau’s enforcement; some not far enough.

Kraninger sought to clarify their concerns.

“What I am seeking to do with the policy statement is make sure that we clarify abusiveness and separate it from deceptive and unfairness because Congress explicitly gave us those three authorities to determine those kinds of acts and practices separately or provide claims to the courts to allow them to do that,” Kraninger said. “In no way should that policy be read to say that we would not bring abusiveness claims.”

In a discussion with U.S. Rep. Bryan Steil, R-Wis., Kraninger also clarified that the bureau reviewed past claims when creating the new policy; but hasn’t amended previous claims and doesn’t intend to at this point.

The UDAAP policy statement leaves open the option for the bureau to propose a rulemaking, Kraninger said in an exchange with U.S. Rep. Andy Barr, R-Ky., but at this point the focus is on more engagement with stakeholders.

“I do still think there is a lot of work to do to have clear rules of the road,” Barr said.

Don’t miss the Feb. 27 Core Curriculum, Keep Calm and Prevent UDAAP, for more information and guidance on the policy statement and to review established federal guidelines for UDAAP.

ACA’s letter for the hearing also addresses support for Congress’s directive in the Dodd-Frank Act for the CFPB to provide regulations for the Fair Debt Collection Practices Act; how the CFPB’s complaint database paints an inaccurate portrait of the debt collection industry; and flawed congressional solutions proposed by the House Financial Services Committee.

Clear and Common-Sense Reforms

“We are hopeful that Congress can put partisan views aside and work together with the CFPB to make common-sense reforms to the outdated FDCPA,” said ACA International CEO Mark Neeb after the hearing. “Unfortunately, many debt collection bills introduced last year in the House Financial Services Committee seek to impede communications between consumers and collectors. This is concerning because significant research has proven that limiting communication is not a consumer benefit, because consumers then do not have the financial information they need to address and improve their situations.”

Kraninger addressed the debt collection rulemaking in her written testimony and during the hearing.

“While we are moving forward with rulemaking, we would welcome legislation through which Congress could better weigh the important policy objectives at issue,” Kraninger said in her testimony. “The bureau is evaluating the comments, weighing the evidence, and will make its decision in accordance with applicable legal requirements, including the [Administrative Procedures Act.]”

Kraninger stressed the bureau is carrying out its mission to protect consumers through education, regulation, supervision and enforcement despite disagreement from the committee.

“Regulation, again, and supervision are around [for] setting up clarity in the rules so that entities that are engaged in financial services understand their responsibilities and are providing consumers with the information that they need,” she said. “There are clearly bad actors in the system, and we will go after them, but we clearly have a difference of opinion regarding how the mission should be carried out.”

Hearing discussions also included the ongoing issue of the constitutionality of the bureau’s leadership structure, due for U.S. Supreme Court oral arguments in Seila Law v. Consumer Financial Protection Bureau March 3; the recent Memorandum of Understanding with the U.S. Department of Education; and the small-dollar lending rule.

ACA will continue to help members succeed and engage with Congress on the industry issues discussed during the hearing, including through the Senate Banking, Housing and Urban Affairs Committee’s semiannual review of the bureau with testimony from Kraninger, which has not been scheduled.


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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