Director Cordray used his recent remarks at the University of Rochester’s Simon School of Business and an interview following his remarks as another opportunity to stress the CFPB’s focus on debt collection. In his remarks, Mr. Cordray spoke about the CFPB’s authority to supervise non-banks. As an example of how the products of non-banks “affect virtually every American,” Mr. Cordray observed that “over 30 million people are being pursued by debt collectors.”

According to an article that appeared in the May 4 American Banker reporting on Mr. Cordray’s remarks and interview, Mr. Cordray indicated that debt collection is “very much on the [CFPB’s] priority list.” He also indicated that the CFPB intends to look not only at the collection practices of third party debt collectors and debt buyers but that it also intends to look at debt collection practices used by original creditors collecting their own debts (presumably using the CFPB’s authority to prohibit unfair, deceptive or abusive acts or practices since original creditors aren’t subject to the Fair Debt Collection Practices Act.)

Mr. Cordray also alluded to the documentation-related challenges original creditors, debt collectors and debt buyers are facing when attempting to collect mortgage and non-mortgage debts. Observing that “it doesn’t make a difference” from the consumer’s viewpoint whether he or she is dealing with an original creditor or a third party collector, Mr. Cordray stated that “it’s a concern” to the extent an original creditor is trying to collect a debt “it can’t vouch is accurate” or is “deceiving the courts.”

To assist clients in responding proactively to such documentation-related challenges, Ballard Spahr’s Consumer Financial Services Group’s recently formed Collection Documentation Task Force conducts extensive reviews of collection procedures and counsels on best documentation practices. The task force is also assisting clients to prepare for the intensive examinations of debt collectors and debt buyers that the CFPB is expected to begin soon.