In advance of the Consumer Financial Protection Bureau’s debt collection roundtable with the Federal Trade Commission on Thursday, Sen. Sherrod Brown (D-Ohio) called on CFPB Director Richard Cordray to enact rules to rein in debt collection policies that lead to consumer abuses.
In a letter this week to the CFPB, the chair of the Senate Banking Subcommittee on Financial Institutions and Consumer Protection urged Cordray, a former Democratic attorney general in Ohio, to examine practices of both creditors and third-party actors in the industry and suggested a number of rules that would reform the debt collection industry.
“It’s hard enough when families aren’t able to make enough to pay their bills, but it’s tragic that families who are struggling to make ends meet are being hounded to make payments on debts that they have already paid off or that they never owed in the first place,” Brown said.
“For the first time, we have an agency that’s dedicated to protecting consumers from predatory debt collection. That’s why I’m asking the CFPB to correct the consumer abuses from creditors and third-party debt collectors,” the Cleveland Democrat said.
Brown also made a partisan jab in the release, saying Republican opposition to Cordray’s nomination could limit the bureau’s ability to supervise debt collectors.
Brown plans to conduct a congressional hearing on debt collection next month to shed light on the industry’s practices. According to the CFPB, more than 30 million Americans have debts in collection and almost 40% of disputes filed with national credit reporting agencies can be linked to collections.
The Fair Debt Collection Practices Act — passed into law 35 years ago — gave the FTC some authority to bring enforcement actions against debt collection companies, but the FTC continues to receive more complaints about third-party debt collectors than any other industry under its supervision, according to a release from Brown.
Additionally, Brown said the Office of the Comptroller of the Currency is reportedly looking into collection practices at the nation’s largest banks.