The CFPB's Proposed Rulemaking - Takeaways from the First 1,000 Comments

Linda Straub Jones

As you are already aware, the CFPB published their ANPR (Advanced Notice of Proposed Rulemaking) for the debt collection industry on November 6, 2013.  Within this document, the CFPB has asked for consumers and professionals from the credit and collections industry to submit comments.  Within the ANPR are 165 questions divided into eight different categories:

• Information passed between creditors and debt collectors and creditors and debt buyers
• Itemization of debt in notice to consumers
• Debt Collection Communications
• Unfair, Deceptive and Abusive Acts & Practices
• Time Barred Debts
• Debt Collection Litigation Practices
• State & Local Debt Collection Systems
• Recordkeeping, Monitoring and Compliance

In order to make the commenting process easier, the CFPB has set up two ways to post online comments.  The first is through Regulations.gov, a web site for commenting on various proposed Federal regulations and documents.   The second is via RegulationRoom.org, which is a site operated by Cornell University’s Rulemaking Initiative wherein you can provide your comments in a more interactive way.  The comments are monitored and commented on in a very timely manner.    Both web sites have the comments posted to the public.

With the first 30 days of comments submitted (and 60 more days to go), I thought it would be interesting to summarize what I’ve seen in the comments so far.

The Regulations.gov debt collection area has received 35 comments through December 5.  Most comments seem to be stories of collection situations gone bad. A few have good suggestions about what can/should be done, but unfortunately only a few really answer the questions asked by the CFPB in their ANPR.  It may be because the regulations.gov site does not have categories to comment in, but rather just posts their entire ANPR.  Many comments discuss debt sales and issues related to collection of purchased debt. The bulk of the comments on this site discuss debt collection calls to the wrong party.

With the debt collection industry still preparing its coordinated response, the RegulationRoom.org site seems to be used more by consumers than ARM companies. Unlike Regulations.gov, it has clear categories to comment in.  RegulationRoom.org’s debt collection portal has received 918 comments through December 5.  Comments can be made in one of 10 different topic areas with various sub-topics available to comment on.

Here is a breakdown of the comments so far by topic and sub-topic:

• Debt Collection Litigation – 163 comments
  • Where the lawsuit can be brought – 37 comments
  • Litigation in state and local courts – 113 comments
  • State exemptions and bad-debt diversion programs – 14 comments

• Telling consumers what’s happening with their debts – 108 comments
  • Notice that the debt has been sold – 53 comments
  • Notice that the debt has been turned over to a collector – 55 comments

• The “Validation notice” sent to consumers – 71 comments
  • Info that might help consumers recognize the debt – 26 comments
  • Info about the amount owed – 6 comments
  • Info about the consumer’s right to dispute the debt – 27 comments
  • Format of the notices – 9 comments
  • Languages other than English – 3 comments

• When consumers dispute a debt – 103 comments
  • What’s going on now with consumer disputes?  – 37 comments
  • What should count as a “dispute?” – 28 comments
  • How should collectors investigate and “verify” the debt? – 27 comments
  • What should happen with unverified debts? – 11 comments

• Making sure debt collectors & buyers have info about the debt – 27 comments
  • What’s happening now? – 10 comments
  • Info about disputes and verification – 3 comments
  • Info about consumer preferences and status – 5 comments
  • Documentation – 3 comments
  • Technology – 2 comments
  • Privacy and data security – 4 comments

• Unlawful collection practices – 124 comments
  • Harassment or abuse – 77 comments
  • Communicating with a consumer who has an attorney – 6 comments
  • Payment methods, post-dated checks, and how payments are applied – 8 comments
  • False or misleading conduct – 19 comments
  • People who provide services and assistance to debt collectors – 2 comments
  • Substantiating claims about the debt and the effects of payment on credit – 12 comments

• Questions about phones & mobile phones in debt collection –165 comments
  • Inconvenient times – 10 comments
  • Inconvenient places – 7 comments
  • Calls at the workplace – 19 comments
  • Voicemail and answering machine messages – 26 comments
  • Caller ID – 22 comments
  • Repetitive calls sand robo-calls – 57 comments
  • Limiting collector communications, avoiding mobile call and texting charges – 24 comments

• Questions about email, texting & social media in debt collection – 30 comments
  • Communications that must be “in writing” – 16 comments
  • “Receiving” a communications; Inconvenient times & places – 4 comments
  • Privacy concerns – 10 comments

• Talking to other people about the consumer’s debt – 60 comments
  • Trying to locate the consumer – 41 comments
  • Contacting a consumer’s spouse – 6 comments
  • After the consumer dies – 3 comments
  • Special issues for servicemembers – 4 comments
  • Authorized users on the consumer’s credit card – 4 comments
  • Parents and others who volunteer to pay a debt – 2 comments

• Old debts – 67 comments
  • Time-barred debts – 52 comments
  • Partial payments and reviving the debt – 15 comments

You can easily tell, just by the number of comments, what the hot topics are amongst consumers.  Litigation concerns, unlawful collection practices, and cell phone use lead the way in the number of comments given to date.

The comments section is monitored by a Moderator, who seems to be very on top of things.  They ask questions for clarification (Moderator: In your case, what do you think debt collectors should have done to verify the debt?), direct consumers to the CFPB’s web site if their comment is actually a complaint (Moderator: The story you shared sounds very frustrating. CFPB has a complaint submission process that may be helpful to you. You can file a complaint and learn more about that process), if there is additional info on the CFPB info site that may be of use to that commenter (Moderator: On CFPB’s website they answer consumer questions about debt collection, including many of the issues you raise) , and reprimand those who use strong or inappropriate language, or who verbally attack other commenters (Moderator:  “Everyone who comments on the site is expected to remain civil and respectful. We respectfully ask that you stop using all capitals in your replies, as this is akin to shouting online.”).

Overall in most of the sections, there is good, thoughtful discussion about the various topics.  I have noticed that there are several “serial posters” who have comments in several different topic areas.  There are also those who just want another avenue to complain about the system, or their particular issue, but don’t have any constructive suggestions on how to help.  As with most blog-type posting site, there are times when the comments get really off topic, but again the Moderator tries to rein them back in and keep the comments on-topic.

Overall, for the first 30 days, I think the CFPB is getting a good view of consumers and their issues.  It will be interesting to see how the CFPB takes these comments and molds them into new rules to guide the collections industry.

This article originally appeared in the latest issue of Know Your Debtor, a free quarterly newsletter focused on the U.S. consumer environment. Make sure you’re registered to receive insideARM’s newsletters on your User Profile page.