Without Cordray Confirmation, Senator Brown Sees “Limited Window” for CFPB Action on Debt Collectors
By Consumers Union on Friday, June 7th, 2013
There’s been a growing tide of concern recently over debt collection practices, as debt collectors have taken aggressive steps to recover debt – oftentimes without verifying that their information on file is accurate. Since being established in 2011, the Consumer Financial Protection Bureau (CFPB) has worked to protect consumers from a wide variety of abusive financial practices – from mortgage loan servicing misconduct to discrimination in auto lending – but recently, the Bureau has turned its attention to illegal debt collection activities.
According to the CFPB’s recent report on the Fair Debt Collection Practices Act (FDCPA), almost one in ten Americans have faced calls or lawsuits from collection agencies. A Federal Trade Commission (FTC) report published this year showed that debt buyers – companies that buy old debts from original creditors for pennies on the dollar, only to turn around and collect on them — often ignore the guidelines of the FDCPA, which requires them to verify the legitimacy of the debt before collecting it.
This week, the CFPB organized a roundtable discussion with the FTC, called “Life of a Debt: Data Integrity in Debt Collection,” inviting government regulators, industry representatives, consumer rights advocates, and others to talk about best practices in debt collection, particularly as they relate to information gathering and documenting the debt.
Also this week, Senator Sherrod Brown (D-OH), who sits on the Senate Banking Committee and chairs the Subcommittee on Financial Institutions and Consumer Protection, spoke out against abusive debt collection practices and in a letter asked CFPB Director Richard Cordray to formulate strong rules to regulate debt collectors.
According to Senator Brown, “For the first time, we have an agency that’s dedicated to protecting consumers from predatory debt collection. That’s why I’m asking the CFPB to correct the consumer abuses from creditors and third-party debt collectors. If Republican opposition to Cordray’s nomination continues, the limited window we have to enact these reforms will close—punishing Ohio’s and our nation’s families.”
Cordray’s confirmation is currently being blocked by a group of Senators who seek to weaken the CFPB’s structure and authority.
Senator Brown is right: we need Richard Cordray to be confirmed director of the CFPB so that the agency can continue to take a strong stand against the abusive practices of debt collectors and others who would cause consumers financial harm. Please join us in fighting for consumers by asking your Senators to confirm Cordray as the director of the CFPB.