CFPB’s Mulvaney scraps survey for debt collection plan

0
115


The Consumer Financial Protection Bureau on Tuesday withdrew a plan to conduct a web survey for its debt collection proposal while acting Director Mick Mulvaney reviews the rulemaking.

The CFPB filed a notice with the Office or Regulatory Affairs to withdraw a plan to conduct a survey of 8,000 individuals as part of research into debt collection disclosures.

“Bureau’s leadership would like to reconsider the information collection in connection with its review of ongoing related rulemaking,” the CFPB stated in the filing.

Observers suggest that Acting CFPB Director Mick Mulvaney may scrap a planned proposal governing first-party debt collectors.

Bloomberg News

The CFPB had sought approval in November from the Office of Budget and Management to “explore consumer comprehension and decision making in response to debt collection disclosure forms,” according to a notice filed in the Federal Register.

Mulvaney heads the OMB and was named to be the acting director of the CFPB last month by President Trump.

The debt collection industry applauded the withdrawal of the data collection, saying it was flawed and undermined the Paperwork Reduction Act.

The Association of Credit and Collection Professionals, a trade group for debt collectors, objected in a comment letter to the data plan by arguing that the survey questions were biased. One of the CFPB’s proposed question stated, “Debt collectors generally don’t care whether the people they are trying to collect debts from actually owe the debt.”

Still, it is unclear if Mulvaney will try to scrap the entire debt collection proposal that was promulgated under former CFPB Director Richard Cordray.

In July, the CFPB split its debt collection proposal into two parts and issued the first federal regulations governing third-party debt collectors that are covered by the Fair Debt Collection Practices Act. The second proposal, which has not yet been released, would govern first-party debt collectors.

Debt buyers and collection agencies want regulations that would require banks, credit card companies and other first-party creditors not subject to the FDCPA to substantiate the documentation of debts because it would make third-party collection much easier, industry experts said.

The CFPB under Cordray had been expected to convene a separate small-business review panel of banks, credit card companies and other first-party creditors.

Some experts have suggested that Mulvaney might choose not to act on a proposal governing first-party debt collectors, which relies on its authority to regulate unfair, deceptive or abusive acts or practices, known as UDAAP.



Original Source