I recently spoke at two different conferences for credit unions.During both speeches, I asked the audiences (approximately 125people at one and 105 at the other) if they were aware that theCFPB was considering rules to regulate first-party collections. Ialso asked if they were aware of the current proposed rules forboth first-party and third-party collections, which include ruleson debt substantiation and transfer of data. Only five to 10 peopleraised their hands at each session.

The CFPB's proposed debt collection rulemaking has been in theworks since November 2013, when the Advanced Notice of ProposedRulemaking was posted. The ANPR was a series of more than 160questions, aimed at both the credit/collections industry andindividual consumers. A period of time was allowed for comments andmore than 10,000 flowed in.

Between December 2014 and March 2015, the CFPB conducted a debtcollection survey with 10,876 consumers. It received 2,132responses, which were taken into consideration during the creation of collectionsrulemaking.

Then, on July 28, 2016, the CFPB posted their proposed debtcollection rules. This was followed by a Small Business RegulatoryEnforcement Fairness Act panel meeting with 22 small businesses inthe collections industry. The intent of this meeting was to askthese small businesses how the proposed debt collection rules wouldimpact their business.

In the CFPB's proposed rules, it suggests rules for collection agencies, debtbuyers, collection law firms and loan services. However, in sectionB, “Scope of Proposals Under Consideration” the CFPB states that,“The bureau expects to convene a second proceeding in the nextseveral months for creditors and others engaged in collectionactivity [emphasis added] who are covered persons under theDodd-Frank Act but who may not be 'debt collectors' under theFDCPA.”

And yet, in June of this year, in what many considered to be asurprise move, the CFPB announced that it was going to change thecontent of the proposed rules, announcing that it will just addressverification of debt and that the rule will cover both first-partyand third-party collections at the same time. In his announcement about this change, former CFPB Director RichardCordray said: “As we evaluated the feedback we received on theproposals under consideration, one thing became clear, writingrules to make sure debt collectors have the right information abouttheir debts is best handled by considering solutions fromfirst-party creditors and third-party collectors at the same time.First-party creditors like banks and other lenders create theinformation about the debt and they may use it to collect the debtthemselves or they may provide it to companies that collect thedebt on their behalf or buy the debt outright. Either way, thoseactually collecting on the debts need to have the correct andaccurate information. All of the parties must work together toensure they are collecting the right amount of debt from the rightconsumer.”

From all this, given the number of hands raised at theconferences I attended, it's clear that too many in our industryare simply unaware of what the CFPB is up to. But, in addition tothe debt collection rulemaking, many companies also tend to forgetabout another part of the Dodd-Frank Act, the Unfair DeceptiveAbusive Acts or Practices. This is the focus of the CFPB's bulletin from July 2013. Under the Dodd-Frank Act, all coveredpersons or service providers are legally required to refrain fromcommitting UDAAPs. In its 2013 bulletin, the CFPB describes certainacts or practices that could be, depending on the fact andcircumstances, considered a UDAAP.

The CFPB also gives examples of UDAAPs, which everyone shouldtake a good look at. The bulletin lists 12 examples ofsituations/actions it considers a UDAAP, and I have seen many ofthese show up, both in suits and as the basis of enforcementactions that have been taken by the CFPB. So, this bulletin is anexcellent document to review to make sure your credit union is notin violation of Dodd-Frank, as it pertains to UDAAPs.

Credit unions large and small need to be aware of what's goingon with the regulations. Being aware is not only a good businesspractice, it's also good for your members. We all know that creditunions are member focused and member friendly, and they pridethemselves on having close relationships with members. But thatdoesn't mean that they're off regulators' radars.

Linda Straub Jones is Director of Collections Complianceat LexisNexis Risk Solutions. She can be reached at[email protected].