First-party creditors are concerned the CFPB’s proposal could extend past regulations for third-party debt collectors.
11/26/2019 10:00
Reported broad language in the Consumer Financial Protection Bureau’s proposed rule for the debt collection industry has banks worried they will be subject to regulations, according to an article in American Banker.
The CFPB has long said, since the notice of proposed rulemaking process started years ago, that the Fair Debt Collection Practices Act regulations are for third-party collectors and there may be separate rules for banks; but according to the recent report [a subscription may be required to view the article] banks worry the proposal would “ensnare” them.
Accordingly, ACA International has worked closely with financial institution trade associations in Washington, D.C. to outline any joint concerns about the proposed rule to the CFPB.
Banks are concerned prohibition of unfair, deceptive or abusive acts or practices (UDAAP) in the Dodd-Frank Act and the CFPB’s proposed rulemaking would affect their industry and reverse previous court rulings that banks collecting their own debts are not classified as debt collectors under the FDCPA.
Comment letters from the banking industry to the CFPB reflect these concerns.
“The proposal will introduce substantial uncertainty and legal risk for first-party creditors” like banks, Diana Banks, senior counsel for fair and responsible banking at the American Bankers Association, wrote in a comment letter to the bureau, according to American Banker.
Read the complete article here. [A subscription may be required.]