The CFPB has issued its seventh annual Fair Debt Collection Practices Act report covering the CFPB’s and FTC’s activities in 2017.
The CFPB’s previous FDCPA annual reports began with a message from former Director Cordray. Unlike those reports, the new report begins not only with a message from CFPB Acting Director Mick Mulvaney but also has an opening message from Maureen K. Ohlhausen, the FTC’s Acting Chairman.
While the new report incorporates information from the FTC’s annual letter to the CFPB describing its FDCPA activities during the year covered by the report, the text of the letter is not included as an appendix to the report as it was in prior reports. In addition, unlike in prior years, the FTC did not issue a press release about its annual letter concurrently with the issuance of the letter. Instead, the FTC’s letter on its 2017 FDCPA activities (which is dated February 8, 2018) is linked to a press release issued by the FTC about the CFPB’s report.
Both the CFPB and FTC press releases about the report quote Mr. Mulvaney’s statement that “[f]rom now on, we will be working closely with the FTC to enforce the FDCPA while protecting the legal rights of all in a manner that is efficient, effective, and accountable.” Mr. Mulvaney’s statement, and the prominence given to Ms. Ohlhausen in the report, perhaps signal that both the CFPB and FTC will continue to take an active, and possibly more coordinated, approach to FDCPA enforcement under the Trump Administration.
With regard to the CFPB’s debt collection rulemaking, the report provides no new insights into the CFPB’s rulemaking plans. It reviews the CFPB’s debt collection rulemaking activities to date, including its November 2013 Advanced Notice of Proposed Rulemaking, its July 2016 publication of an outline of proposals under consideration in anticipation of convening a SBREFA panel, and its August 2016 convening of the panel. The report states only that the CFPB “is continuing to consider the feedback it received through the SBREFA panel and from other stakeholders subsequent to the publication of the Outline” and is also “engaged in research and market outreach.”
It is widely thought that the CFPB will not entirely abandon its debt collection rulemaking activities under the Trump Administration. Continued debt collection rulemaking would be consistent with recent statements by Mr. Mulvaney, such as to the National Association of Attorneys General earlier this month, in which he highlighted the high volume of debt collection complaints and indicated that complaint volume will be a significant factor in how the CFPB sets its priorities. In his introductory message in the new report, Mr. Mulvaney observed that in 2017 debt collection was “one of the most prevalent topics of complaints about consumer financial products or services received by the Bureau.”
Although the CFPB was expected to propose a debt collection rule under former Director Cordray that covered both first- and third-party collections, the debt collection rule proposals outlined for the SBREFA panel only covered third-party debt collectors. Accordingly, while the CFPB’s debt collection rulemaking is likely to continue, it is also likely that any debt collection rule proposed by the CFPB under Mr. Mulvaney or a new Director appointed by President Trump would similarly be limited to third-party debt collectors and not cover first-party collections.
Other information set forth in the report includes the following:
- According to the report’s section on complaints, the CFPB handled approximately 84,500 debt collection complaints in 2017 (which was 3,500 less than in 2016). The most common complaint was about attempts to collect a debt that the consumer claimed was not owed. The second and third most common complaint issues were, respectively, written notifications about the debt and communication tactics.
- In the report’s section on the CFPB’s supervision of debt collection activities engaged in by banks and nonbanks subject to CFPB supervision, the CFPB described the following FDCPA violations found by its examiners:
- Impermissible communications with third parties due to the supervised entity’s failure to adequately confirm that it had contacted the correct party before beginning to discuss the debt
- Deceptively implying that authorized credit card users were responsible for a debt
- Falsely representing to consumers the effect on their credit scores of paying a debt in full rather than settling it for less than the full amount
- Communicating with consumers outside of the hours of 8 a.m. to 9 p.m. or at times the consumers had previously indicated were inconvenient due to the supervised entity’s failure to accurately update account notes and the use of autodialers that based call parameters solely on the consumer’s area code, rather than also considering the consumer’s last known address
- The CFPB continues to be in active litigation in one FDCPA matter filed in 2015 and another filed in 2016. In addition, the CFPB “is conducting a number of non-public investigations of companies to determine wither they engaged in collection practices that violate the FDCPA or the CFPA.”
- In 2017, the CFPB’s public enforcement actions involving debt collection resulted in over $577,000 in consumer relief and over $78,000 paid into the civil penalty fund. (In dramatic contrast, these amounts in 2016 were, respectively, $39 million in consumer relief and over $20 million paid into the civil penalty fund.)