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ARTICLE · 21 SEPTEMBER 2016

CFPB Proposes "Drastic Overhaul" Of Debt Collection

Stroock & Stroock & Lavan LLP
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On July 28, 2016, the Consumer Financial Protection Bureau released an outline of proposals that it is considering to, in Director Richard Cordray's words, "drastically overhaul the debt collection market".

United StatesConsumer Protection
Julia B. Strickland
Julia B. Strickland
Quyen Truong
Quyen Truong
Stephen Newman
Stephen Newman
Brian C. Frontino
Brian C. Frontino
Benjamin Diehl
Benjamin Diehl
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On July 28, 2016, the Consumer Financial Protection Bureau ("CFPB") released an outline of proposals that it is considering to, in Director Richard Cordray's words, "drastically overhaul the debt collection market" (the "Proposals"). The CFPB is unveiling key provisions of the Proposals for presentation to a Small Business Regulatory Enforcement Fairness Act ("SBREFA") panel, a crucial step toward publication of a proposed rule. The Proposals are limited to third party debt collectors, debt buyers and others ("collectors") subject to the Fair Debt Collection Practices Act (the "FDCPA"). The CFPB warns, however, that it plans to address issues involving first-party debt collectors and creditors on a separate track as part of its overhaul of the debt collection marketplace. Moreover, the Proposals' demand for collectors to conduct extensive substantiation and documentation of debt at multiple steps in the collection process would translate to corresponding demands

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