The Consumer Financial Protection Bureau (CFPB) has proposed new regulations for debt collection agencies. While individuals from the CFPB say they believe that these will provide extra protection for individuals and small businesses, debt collection agencies have stated that they believe the rules will make it harder to perform their duties. Expected for some time, the rules were preceded earlier this summer by the CFPB's recommended changes to payday lending.
The CFPB has devised this new set of rules based on the many complaints made by individuals who have felt bullied by companies making an attempt to collect a debt. In fact, debt collection complaints make up almost a quarter of all issues reported to the CFPB. These complaints can be viewed on the CFPB's website, and include things such as repeated calls in a short period of time, or being called at work.
If approved, the changes would include the following:
- Limit how collectors can contact individuals.
- Put rules in place to protect individuals from debts that do not exist.
- Increase compliance costs.
The owners of small debt collection businesses have expressed concern that these regulations would restrict their operations so much that they would face going into bankruptcy if they did not collect on debts. The proposed regulations would only affect third-party collectors. Currently, credit unions and banks are not affected.
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