Magazine article American Banker

CFPB Seeking to Supervise Debt Collectors, Credit Reporting Firms

Magazine article American Banker

CFPB Seeking to Supervise Debt Collectors, Credit Reporting Firms

Article excerpt

Byline: Kate Davidson

WASHINGTON - Large debt collection and credit reporting firms would face federal supervision for the first time under a proposal issued Thursday by the Consumer Financial Protection Bureau.

The two industries are the first to be identified by the bureau for inclusion in its nonbank supervision program, which launched Jan. 5. The bureau may already supervise mortgage, payday and student lenders of any size, but must establish parameters for identifying alarger participantsa in other consumer markets.

aConsumer financial products and services have become more complex over the years and they have expanded well beyond traditional banks,a CFPB Director Richard Corday said in a press release. aOur proposed rule would mean that those debt collectors and credit reporting agencies that qualify as larger participants are subject to the same supervision process that we apply to the banks.

aThis oversight would help restore confidence that the federal government is standing beside the American consumer,a he added.

Under the proposal, debt collectors with more than $10 million in annual receipts from debt collection activities would be subject to supervision. Credit reporting firms with more than $7 million in annual receipts would also be supervised.

Using these criteria, the proposal would cover approximately 175 debt collection firms, only about 4% of all such firms, but representing approximately 63% of annual receipts from the entire market, according to CFPBas estimates. …

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