Richard Cordray, the former director of the Consumer Financial Protection Bureau, has published a whitepaper/memo aimed at Congressional leaders and his successor about how the regulator should be handling itself during the coronavirus pandemic, and calling for “vigorous” oversight of debt collectors because debt collectors are more likely to harass consumers who are deeper in debt because of the crisis.
Debt collectors who are finding it “harder” to get paid because they are unable to collect may be more likely to harass or abuse consumers, who are likely going to be less likely to repay their debts. The CFPB should go as far as to issue “guidance about what parameters debt collectors should observe in the current crisis to avoid engaging in conduct that is abusive or unconscionable, such as refraining from initiating new debt collection lawsuits, garnishing wages, or attaching bank accounts,” Cordray said.
The CFPB should also be seeking regular reports from the companies it regulates — and those that it doesn’t — in order to stay on top of trends. Some of the data points that should be collected, according to Cordray, are: call volume, hold times, accounts placed in forbearance, and accounts missing a payment. The anonymized data should be made public so it can help develop best practices once the COVID-19 crisis is over.
Cordray, who recently released a book about his tenure at the CFPB, is also calling on the agency to stop all “non-essential” rulemaking for an indefinite period of time. “For the next several months, it is also likely that neither industry nor consumers are likely to have the bandwidth to pay attention to requests for information or otherwise to participate in the rulemaking process in any event,” Cordray wrote.
Many consumer advocacy groups across the country have taken up Cordray’s calls for the CFPB to keep a closer eye on financial services companies and “confront the circumstances and act immediately to mitigate the harmful effects of this crisis.”