On October 24, 2012, the Consumer Financial Protection Bureau (CFPB) issued a final rule that will allow it to supervise the larger consumer debt collectors for the first time. The final rule was accompanied by the examiners field guide, which examiners will use to assess potential risks to consumers and whether debt collectors are complying with requirements of federal consumer financial law.
The final rule does not apply to depository institutions or credit unions of any size. After it becomes effective in January of next year any indirect impact on credit unions will be monitored.
The consumer debt collection market covered by the rule includes the following types of debt collection: (1) firms that buy defaulted debt and collect the proceeds for themselves; (2) firms that collect defaulted debt owned by another company in return for a fee; and (3) debt collection attorneys that collect through litigation. Under the rule, any firm that has more than $10 million in annual receipts from consumer debt collection activities will be subject to the CFPB’s supervisory authority. “By expanding the supervision program to oversee the nonbanks that are larger participants in the consumer debt collection market, the Bureau will now have a window into every stage of the process—from the origination of credit to debt collection,” as stated in the press release.