Dems to Kraninger: Go Back to Drawing Board on Debt Collection Rule
The proposed rule would allow debt collectors to send unlimited text messages and emails without receiving consent from a consumer.
The CFPB’s proposed debt collection rule would allow debt collectors to “inundate” consumers with calls, 24 Democratic senators told the agency.
“The proposed rule allows a debt collector to call a consumer seven times a week per debt,” the senators, including Senate Banking Committee ranking Democrat Sherrod Brown of Ohio and Sen. Robert Menendez (D-N.J.), wrote in a letter to CFPB Director Kathy Kraninger. “For a consumer with six medical debts, the proposed rule means that the consumer could receive up to 42 calls per week.”
After several years of research, the CFPB on May 7 released a 538-page proposed rule implementing the Fair Debt Collection Practices Act. The proposal specifies rules for third-party debt collectors covered under that law. Among other things, the rule addresses technological advances that have taken place since the law was enacted in 1977.
Among other things, the plan would limit the number of telephone calls from debt collectors to a borrower to no more than seven per week.
Credit union trade groups said while the rule only governs third-party debt collectors, many credit unions hire those firms.
The Democrats called on Kraninger to make significant changes to the proposed rule before it becomes final.
“We are deeply disappointed that you did not take this opportunity to meaningfully improve the lives of the 70 million consumers who are contacted by debt collectors annually,” the senators said.
They outlined several additional objections to the rule, including that:
- The proposal to provide an exemption for “limited content” messages could be overheard or delivered to an employer.
- There is no requirement in the plan that would require a debt collector to have original documentation or other information to confirm the accuracy of the debt.
- The proposed rule would allow debt collectors to send unlimited text messages and emails without receiving consent from a consumer.
- Requiring a consumer to receive information by clicking on a hyperlink from an unknown party creates security problems.
- The plan does not have sufficiently strict provisions dealing with collectors attempting to collect a debt that is time barred.