The former director of the Consumer Financial Protection Bureau is warning about the potential for debt collectors who are “going to become increasingly insistent and increasingly vehement” in their efforts to collect as the coronavirus pandemic continues to wreak economic havoc on the country.
In an interview with CNBC, Richard Cordray pointed to his concerns about debt collectors when asked “what consumer concerns were keeping [him] up at night?”
As more people have their work hours cut or lose their job altogether, someone needs to be “looking out for” consumers, Cordray said in the interview. Collectors, Cordray said, may “potentially go over the legal lines” if consumers are not able to make their payments. “Right now, debt collectors are a dangerous industry for consumers,” he said.
Cordray also called out the CFPB during the interview, saying it should be holding the companies it regulates accountable “to make sure they’re delivering the kind of performance that consumers need in this crisis.”
Finally, Cordray said that the Bureau needs to be “aggressive” in its oversight of the financial services industry.
Cordray had earlier called on his former agency to maintain “vigorous” oversight of debt collectors because debt collectors are more likely to harass consumers who are deeper in debt because of the crisis. To keep that from happening, Cordray suggested, the CFPB should 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.”