Oct 24 The U.S. consumer agency will begin
closely supervising about 175 debt collectors for the first time
starting in January, widening the new watchdog's oversight of
The Consumer Financial Protection Bureau (CFPB) said on
Wednesday it had finalized plans to oversee larger firms in the
industry to make sure debt collectors treat Americans fairly.
The agency said it will determine whether debt collectors
properly disclose the amount owed, maintain accurate data about
consumer debt, and address consumer complaints quickly.
"We want all companies to realize that the better business
choice is to follow the law - not break it," CFPB Director
Richard Cordray said in a statement.
The 2010 Dodd-Frank financial law created the bureau and
directed it to oversee consumer financial products such as
mortgages, student loans and credit cards.
It also allowed the CFPB to extend its oversight to larger
non-bank companies participating in consumer financial markets.
The CFPB will supervise firms with more than $10 million in
annual receipts from consumer debt collection. About 30 million
Americans have outstanding debt that is subject to collection,
the agency estimates.
Firms involved in debt collection try to get money from
delinquent borrowers for a fee, buy up debt from lenders and
recover what is owed, or collect money through litigation.
Encore Capital Group Inc and Asset Acceptance
Capital Corp are among the biggest companies in the
Debt collectors sometimes pass on consumers' collection
status to credit agencies, which issue the credit reports that
banks and other lenders use to determine whether to lend money
and what interest rates to charge, the CFPB said.
"If they get the information wrong, this can be the
difference between getting approved or denied for such financial
products as a mortgage or a car loan," the agency said.
The CFPB in September began supervising credit reporting
agencies that take in more than $7 million each year, including
Equifax, Experian and TransUnion.
Cordray has said those industries were chosen partly due to
the role they are playing in consumers' lives after the
2007-2009 financial crisis.
When the bureau begins overseeing debt collectors, it will
be able to keep an eye on every stage of the lending process,
the CFPB said.
The CFPB said on Wednesday it also released the field guide
that examiners will use to supervise debt collectors.