CFPB: Individuals and Corporations Can be Penalized for Wrongdoing

Richard Cordray, director of the Consumer Financial Protection Bureau, made it clear at the Reuters Washington Summit on Wednesday that the CFPB plans to crack down on individuals who cheat consumers just as much as it goes after corporations.

This expanded scrutiny has already lead to trouble for people and companies in debt collection. For instance, Bank of America has had to deal with back-to-back legal hits this month. First, the bank paid $32 million to settle multiple proposed class action lawsuits over violations of the Telephone Consumer Protection Act; it’s the largest cash payout ever for a TCPA suit. And Wednesday, a jury found Bank of America liable for selling defective mortgages. The jury also found a top manager at Bank of America’s Countrywide Financial unit liable, pinning some — if not all — of the responsibility for the bad acts on former Countrywide manager Rebecca Mairone.

“I’ve always felt strongly that you can’t only go after companies,” Cordray said. “Companies run through individuals, and individuals need to know that they’re at risk when they do bad things under the umbrella of a company.”

Now more than ever, if your company isn’t focused on compliance, you’re not just risking your reputation in the marketplace; you may also compromise your corporate and personal balance sheets due to fines and lawsuits. The Debt Collection Compliance Handbook, insideARM.com’s comprehensive guide to 30 certifications, rules and regulatory requirements, is full of ideas and tools for compliance. With more attention than ever focused on the collections industry, those collection agencies who exhibit an assured grasp of compliance issues will have a leg up on those who count compliance infractions as just another line-item on the balance sheet.

Also, or a detailed look at how individual consumers are asking the CFPB to address debt collection, check out our CFPB’s Advice to the Consumer report. You can use this guide to:

• Enhance your collector training program.
• Review these responses with your compliance program in mind. Do your training, operational, and on-going audit procedures address all of the relevant matters addressed in the Q&A?
• Provide a resource on your website that mirrors/references the CFPB, showing the public that you are on board with consumer protection.