Weary eyed from trying to digest a 117-page series of proposals that would affect virtually all parts of their business which were released only 11 hours earlier, dozens of industry professionals stood up in front of senior leadership from the Consumer Financial Protection Bureau last Thursday and shared the common threads that are making it harder and harder to do their jobs. Many of those individuals did so knowing that what they were saying was unlikely to sway the minds of those at the CFPB who are working on a proposed rule and, in fact, could possibly do more harm than good.
“It’s hard to go a meeting like that,” said one industry executive who was in attendance and spoke on the condition of anonymity. “It feels like you’re getting whipped.”
Ohad Samet, the co-founder and CEO of TrueAccord, said there was an “undeniable element of frustration” at the field hearing, especially from smaller and mid-size collection agencies.
There were “people who generally came to dissent,” Samet said. “Frankly, I’m not sure that is helpful and some of the comments were unproductive in my opinion.”
The field hearing consisted of remarks from Richard Cordray, the CFPB’s executive director, a discussion with representatives from the industry — DBA International, ACA International, and NARCA, the National Creditor’s Bar Association each had representatives on the dais – consumer advocates, legal advocates, and a number of CFPB executives, including John McNamara, the Acting Assistant Director, Installment Lending and Collections Markets and the Debt Collections Program Manager.
BillingTree held a reception after the hearing and circulated a sheet for individuals to share their thoughts and observations from the event. Many of the observations had to do concerns that the CFPB is absolving individuals of their responsibilities and financial obligations through the proposals.
“Again the focus to protect the consumer but hindering the collection agencies more and more,” said one commenter.
“It seems to be very one sided and for the consumer,” said another.
“No accountability for consumers or at least any mention of it,” said a third.
One industry executive who attended the session said that if you watched Director Cordray during the public comment period of the hearing, you could see that the common message from the industry that consumers need to pick up the phone when they are called by a collector was not getting through.
One lawyer who spoke during the public comment period blasted the CFPB for “shooting the messenger” by regulating third-party collectors instead of first-party creditors, which the CFPB said it would handle separately.
“I agree with all of the Bureau’s objectives,” said Charles Messer. “But I submit that the proposals are misconceived, ineffective, and unfair. Debt collectors are messengers for creditors. Cracking down on collectors is like shooting messengers for delivering messages. These obligations are only being imposed on messengers. If the CFPB were concerned about accurate reporting and documentation, it is the creditor that has the information, not the messenger. Creditors never warranty the accuracy of their information. Collectors have no power. All the risks are crammed down on collectors. The Bureau is cracking down on weakest persons in the industry.”
While agreeing that it might be early for companies to start changing their operations, Jan Stieger, the executive director of DBA International, said that the proposals presented by the CFPB offer a “sense of where the CFPB is headed,” and that the “devil will be in the details” of the proposed and final rules.
The next step for the CFPB is a series of meetings with a group of representatives from small businesses. The meetings are to comply with the Small Business Regulatory Enforcement Fairness Act, of which the CFPB is only one of three federal agencies that must take this additional step in the rulemaking process. Those meetings are expected to be held this month. Following the meetings, the group will have 60 days to release its report.
