Interview With CFPB Head Richard Cordray Promises New Rules And Enforcement Actions

Keywords: CFPB, Electronic Fund Transfer Act, Fair Debt Collection Practices Act

The Washington Post has published an interview with the now-confirmed commissioner of the Consumer Financial Protection Bureau, Richard Cordray. We've excerpted some key highlights; the full interview is well worth reading.

The interview has some specifics about next steps by the CFPB on debt collection. For example, Cordray says:

We will be undertaking rulemaking in the debt collection area. The work on that will get started later this fall. . . .

The Fair Debt Collection Act was passed in 1977 and there were never any provisions for rules to be written under it, so it hasn't kept pace with the times. It's now 35 years old and there is room for us to update the act to take account of various court decisions, changes in the industry, changes among the consumer public to improve coverage so people are protected and treated fairly. That's an important area for us and an area where we've already had some activity moving toward rulemaking.

Corday also promises that additional enforcement actions against debt collectors are in store:

We're also examining debt collectors. We've done some enforcement actions involving debt collection, and there will be more. We've put out a bulletin on first-party debt collectors, making clear that they're also covered under existing law. And we're starting to provide some tools for consumers to use, such as the template letters they can use to try and avoid undue harassment and abuse from debt collectors.

Cordray next turns to so-called "payday lenders," as to which he implies that the CFPB's work is still in its nascent stages:

We put out the white paper on payday lending and the deposit advance products in late spring. That is leading us toward policy work in the area. There is some follow-up research work we're doing that has been under way since the first paper came out. But there will be activity in this area in the near future.

The issue coming out recently of online payday lenders who are relying on financial banks to be the mechanism for financing and collecting the money really has been interesting. Frankly, the work in that area involves coordination with both federal regulators, state officials and it can even be international with some online lenders originating from outside of the United States now. It's an area where we've been building partnerships as well as thinking about the policy work that we need to do, and we're...

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