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Spring 2014 rulemaking agenda

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Today, we’re posting a semi-annual update of our rulemaking agenda in conjunction with a broader initiative led by the Office of Management and Budget (OMB) to publish a Unified Agenda of Regulatory and Deregulatory Actions across the federal government. Portions of the Unified Agenda are published in the Federal Register, and the full set of materials is also available.

Under the Regulatory Flexibility Act, federal agencies are required to publish regulatory agendas twice a year. We’ve been doing this for a couple of years now by voluntarily participating in the Unified Agenda. Our regulatory agenda includes rulemaking actions in the following stages: pre-rule, proposed rule, final rule, long term actions, and completed actions.

Mortgages

Our agenda includes a number of rulemakings mandated by the Dodd-Frank Act. For example, we recently convened a small business review (SBREFA) panel to discuss potential amendments to the Home Mortgage Disclosure Act, some of which were mandated by Section 1094 of the Dodd-Frank Act. We’re also focusing intensely on supporting the implementation process for our recent rulemaking to implement a Dodd-Frank Act directive to consolidate and streamline federal mortgage disclosures required under the Truth in Lending Act and Real Estate Settlement Procedures Act. We’re also continuing work with stakeholders to address questions that have arisen with regard to the 2013 mortgage rules, including issuing additional clarifications and amendments as warranted.

Defining larger participants

We’re also continuing rulemakings to implement our supervisory program for certain nonbank entities by defining “larger participants” in various markets for consumer financial products and services. For example, we’re developing a proposal to identify “larger participants” in the market for auto lending. We’ve previously defined larger participants in the consumer debt collection, credit reporting, and student loan servicing markets and are now in the process of finalizing a rule defining larger participants in the international money transfer market.

Debt collection

We’ve been doing research and outreach to assess issues in various other markets for consumer financial products and services over many months. In November 2013, we issued an advance notice of proposed rulemaking seeking comment, data, and information from the public about debt collection, which is the single biggest source of complaints to the federal government. We received more than 23,000 comments in response to the notice, and in our 2014 annual report on Fair Debt Collection Practices Act, reported that we received more than 30,000 consumer complaints in this area.

Payday loans and prepaid cards

We’re researching and considering whether rulemaking is warranted in the areas of payday and deposit advance products, as well as consumer overdraft products. We held a field hearing in March 2014 in Nashville, Tennessee, and also released a report that analyzed payday lending and found that four out of five payday loans are rolled over or renewed within 14 days. We’re also expecting to build on an Advance Notice of Proposed Rulemaking that we published in 2012 concerning prepaid cards by issuing a proposed rule to strengthen federal consumer protections for these products. We’ve been testing potential disclosures that we may propose to be used on the packaging of prepaid cards.

Privacy disclosures

We’re returning to a topic that had been raised as part of an earlier initiative to seek comment on ways to streamline and modernize regulations that we had inherited from other agencies. Specifically, we are expecting to issue a proposal regarding the notices that consumers receive each year from their financial institutions to explain the companies’ information sharing practices. A number of commenters had suggested that eliminating the annual privacy notices where there has been no change in policies would reduce unwanted paperwork for consumers and unnecessary regulatory burdens, at least where a financial institution limits the sharing of information with third parties.

We’re continuing research, analysis, and outreach on a number of other consumer financial services markets, and will update our next semi-annual agenda to reflect the results of further prioritization and planning.

Your chance to weigh in on debt collection practices

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We want to hear about your debt collection experience—weigh in now.

Since we began taking debt collection complaints a few months ago, companies have responded to more than 5,000 debt collection complaints. We see that this is an important issue for consumers and today we’re adding these complaints about debt collection to our public Consumer Complaint Database.

We’re also taking the first steps to gather information to determine what rules would be appropriate to protect consumers who are subject to debt collection. We’re issuing an Advance Notice of Proposed Rulemaking (ANPR) today —and what that means is that we are considering issuing rules for the debt collection industry, but first we want to hear from you so we can learn more about the debt collection system. We’d like to hear about your experience with debt collectors and how they should act when they try to recover debts.

Getting input from the public – you – is an important part of the process. Debt collection is a complicated topic, with many consumer protection concerns.  We are issuing an ANPR in order to ask a number of questions about different aspects of the industry and the consumer experience. The ANPR will be published in the Federal Register, where anyone can submit comments to respond to the questions. We’re particularly interested in learning about the accuracy of information in the debt collection industry, whether consumers are aware of the debt and their rights, and whether consumers are being treated fairly.

Although the public can submit comments formally in response to the notice at regulations.gov, we want to make it easier for consumers and small businesses to tell us what they think about debt collection practices. To do that, we’ve partnered with RegulationRoom.org, operated by the Cornell University’s eRulemaking Initiative, where you can provide your comments in an interactive and intuitive way.

RegulationRoom.org is not a government website. It’s operated by law students and staff at Cornell Law School, with the goal of making it easy for people to submit comments to government agencies. They are working on removing barriers to public participation, and we are excited to be partnering with them again.

The staff at RegulationRoom.org realizes that most people are generally unfamiliar with the formal commenting process at Regulations.gov (the official government site). So they present information, conduct a conversation, and then collect views until the forum closes about a week before the end of the comment period, so that their team can assemble all the feedback into an official comment. Those who have participated get one more chance to react to the summary before it is submitted formally to the CFPB through regulations.gov. And, like all other formal comments, we will read and consider them as we consider consumer protection rules for the debt collection market.

Explore the data

Adding debt collection complaints will take the number of complaints in the Consumer Complaint Database to more than 155,000. When you look at the data for debt collection complaints, you can even see what type of debt is involved (auto loan, credit card, medical, student loan, mortgage, etc).

Dig in and explore this new frontier of information, and remember – if you think you’ve found something interesting in the consumer complaint data, we definitely want to hear about it! We encourage the public, including consumers, analysts, data scientists, civic hackers, and companies that serve consumers to analyze, augment, and build on the information in the database to develop ways for consumers to use the complaint data or mash it up with other public data sets to reveal potential trends.

Don’t forget to share your work, from visualizations to new tools, by tweeting @CFPB or using #CFPBdata.

New ways to combat harmful debt collection practices

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Updated on May 22, 2014

Today, in addition to two bulletins putting companies on notice about harmful debt collection practices, we’re also releasing new tools for consumers: Action letters for consumers to consider using in corresponding with debt collectors and debt collection complaints.

Many collection firms play by the rules and treat consumers fairly, but those that do not can cause financial harm to consumers and undermine the financial marketplace. Banks and other creditors may collect their own debt. They also may sell off debt to third parties. Those third-party debt buyers may collect the debt themselves or sell it off again for collection. Any entity that is subject to the Consumer Financial Protection Act of 2010 is legally required to refrain from committing unfair, deceptive, or abusive acts or practices that would violate the Act.

Action letters

We’ve published five action letters that consumers can consider using when replying to debt collectors. These letters can help consumers get valuable information about claims being made against them or protect themselves from inappropriate or unwanted collection activities. The letters address the following situations when the consumer:

  • Needs more information on the debt:

    The first letter is for consumers who need more information about a debt the collector has told them that they owe. The letter states that the consumer is disputing the charges until the debt collector answers specific questions about what is owed. This letter may be useful, for example, for a consumer who may not immediately recognize the debt as their own or for those who want to find out more about the debt before they pay it.
    Download the “more information” letter

  • Wants to dispute the debt and for the debt collector to prove responsibility or stop communication:

    This letter tells the collector that the consumer is disputing the debt and instructs the debt collector to stop contacting the consumer until they provide evidence that the consumer is responsible for that debt. For example, consumers who do not want to discuss the debt until they have additional information verifying the debt might use this template.
    Download the “dispute and proof” letter

  • Wants to restrict how and when a debt collector can contact them:

    The Fair Debt Collection Practices Act prohibits debt collectors from contacting a consumer about a debt at a time or place they should know is inconvenient. With this letter, the consumer is able to tell the debt collector how they would like to be contacted. This may be a useful option for a consumer who wants to work with a collector to resolve their debt.
    Download the “contact restriction” letter

  • Has hired a lawyer:

    If a consumer has hired a lawyer, generally, the debt collector should be contacting the lawyer instead of the consumer. This letter template provides a way for the consumer to give the debt collector the lawyer’s information and instruct the collector to contact only the lawyer.
    Download the “hired a lawyer” letter

  • Wants the debt collector to stop any and all contact:

    Consumers have the right to tell a debt collector to stop all communication. It is important, however, to note that stopping contact from a debt collector does not cancel the debt or prohibit the collector from potentially pursuing other remedies, such as filing a lawsuit. This letter template could be beneficial for those consumers who feel they are being harassed by a collector’s communications.
    Download the “stop contact” letter

Debt collection complaints

Today we’ll also start taking complaints about debt collection problems related to any consumer debt, including credit card debt, mortgages, auto loans, medical bills, and student loans. You can submit a complaint to us against any company collecting a consumer debt. You can also file a second, separate complaint against the company with which you had the original account.

We’ve been taking consumer complaints since launching on July 21, 2011, beginning with credit card complaints, and also accept complaints about mortgages, bank accounts and services, private student loans, consumer loans, credit reporting, and money transfers. We ask the companies to respond to complaints within 15 days with the steps they have taken or plan to take, and expect all but the most complicated complaints to be closed in 60 days.

You get a tracking number after submitting a complaint and can check the status of your complaint on consumerfinance.gov/complaint.

Updates

Updated on May 22, 2014:
These letters have been updated to include some of the feedback we received in the comments below.