CFPB announces debt collection town hall as it preps new proposal

Mortgage

The Consumer Financial Protection Bureau is poised to unveil a regulatory proposal by as early as next week on how it plans to reform oversight of debt collectors.

The agency is planning to hold a town hall meeting on debt collection policy with stakeholders in Philadelphia on May 8. In the past, the CFPB has scheduled subject-specific events like this to be timed with the release of new draft policy.

The town hall will feature remarks from Director Kathy Kraninger as well as comments from community groups, industry representatives and members of the public, the CFPB said Monday on its website.

The debt collection proposal is expected to address how debt collectors can use text messages and emails to track down debtors, among other issues. The rule is expected to be finalized in early 2020.

The proposal will provide “clear bright-line limits” on the number of calls a consumer may receive on a weekly basis from debt collectors, Kraninger has said.

“We will propose that collectors provide consumers with more and better information at the outset of collection to help them identify debts and understand their options, including their rights in disputing debts or paying them,” Kraninger said in a speech earlier this month.

Isaac Boltansky, director of policy research at Compass Point Research Trading, said the forthcoming proposal is particularly noteworthy because “it could ultimately benefit recovery rates and lessen collector legal liability.”

“Our sense is that this proposal is unlikely to demand the same degree of disclosure, validation, and communication requirements as previously outlined in earlier CFPB proposals,” Boltansky wrote in a recent research note.

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