Kathy Kraninger, the Director of the Consumer Financial Protection Bureau, should have said “spoiler alert” during a speech yesterday (a video replay of the event is below) before giving away some of what the industry can expect to see in the forthcoming proposed debt collection rule.
Acknowledging that the proposed rule will be released in “the coming weeks,” Kraninger also provided five sentences worth of clarity about what the CFPB will be focusing on after years of preparation.
Said Kraninger during remarks at the Bipartisan Policy Center:
The Bureau will propose clarifying rules to better enable the use of modern communications technology in collections activity. The proposed rules also would protect consumers with clear, bright-line limits on the number of calls they may receive from debt collectors on a weekly basis. We will propose to provide clarity on how collectors may communicate via newer technology such as email or text messages. 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. As the CFPB moves to modernize the legal regime for debt collection, we are keenly interested in the views of stakeholders and look forward to engagement with you.
Breaking that down, the CFPB appears to be planning on:
- Placing limits on the number of communications that collectors will be allowed to attempt when contacting individuals with unpaid debts
- Setting rules and guidelines that will more clearly enunciate how collectors may use digital technologies, like text messages and email, to communicate with individuals
- Requiring collectors to use new disclosures, especially during initial communications with individuals
Exactly what those limits, guidelines and disclosures are will be learned when the CFPB releases the proposed rule.
During her remarks, Kraninger also prioritized the tools that the CFPB will use to purse its mission of protecting consumers. Educating consumers will be the CFPB’s top priority, followed by setting clear rules and not engaging in regulation by enforcement, supervising institutions regulated by the bureau, and, last but not least, enforcement.
Media outlets took Kraninger’s comments and ran with them.
“CFPB to focus on protecting consumers, not enforcing laws on financial institutions,” said one headline; “Trump appointee to turn Wall Street watchdog CFPB into financial literacy program,” said another. And, of course, the obligatory response from consumer advocates: “Consumer groups fear feds will let debt collectors send texts, emails”
One media outlet took the time to ask ACA International what it thought of the director’s comments. From the report: The industry wants “clear lines of what we should be doing and not doing,” said Leah Dempsey, senior counsel for ACA International, a large industry lobbying group.