News About Debt Collection Rulemaking

As many consumers in the Chicago area know, the Consumer Financial Protection Bureau (CFPB) is a federal agency that has a primary task of regulating the industry of debt collection in our country. According to a recent article from ACA International, the CFPB announced its Spring 2016 Regulatory Agenda, which includes a timetable for debt collection rulemaking. Currently, the CFPB remains in “pre-rule activities,” which must come before “the next step of the highly anticipated rulemaking,” according to the article. Why is CFPB rulemaking important, and why are consumer advocates eager to see this process move forward? To better understand, we should take a closer look at the article and the implications of the CFPB’s regulatory agenda.
Implications of the Spring Regulatory Agenda
While terms like “pre-rule activities,” “rulemaking,” and “comment period” can be confusing for the average Oak Park resident, one of the most important pieces of information about CFPB rulemaking is simple: the agency is taking steps to protect consumers from abusive and unfair debt collection practices. As the article explains, the CFPB’s Spring 2016 Regulatory Agenda “is an indication of its intentions to move forward with the debt collection . . . process in the near term.”
The updated agenda indicates that the CFPB expects its pre-rule activities to last until at least June of this year. In other words, the rulemaking process will not move forward until then, and the pre-rule activities may in fact last beyond that date. While the agenda does make clear that the CFPB is moving along in the rulemaking process, its recently released agenda does not “really provide any significant insight into the date when a proposed rule for debt collection will finally be released,” according to the article. The article also underscores that the rulemaking has been delayed previously.
Impact of CFPB Debt Collection Rulemaking
What will the eventual impact look like when it comes to CFPB rulemaking? According to the CFPB’s website, a significant part of the agency’s Congressional mandate is to create rules that help to keep consumer finance markets effective. One of the more significant concerns in the CFPB’s recent rulemaking efforts concerns mandatory arbitration clauses.
As a CFPB article makes clear, the agency is concerned that mandatory arbitration clauses, in many cases, hurt consumers. As such, the agency has proposed rules to prohibit mandatory arbitration clauses. The proposed rules are “designed to protect consumers’ right to pursue justice and relief and deter companies from violating the law.” In recent years, more credit card contracts and bank agreements have had mandatory arbitration clauses in them. In many cases, consumers do not even know that they have agreed to arbitration in the event that they are wronged by a creditor. Indeed, “hundreds of millions of consumer contracts” contain mandatory arbitration clauses, and they can prevent consumers from getting a fair hearing in court.
When do pre-rule activities and proposals finally result in rules going into effect? When a rule is proposed, there is a required comment period in which members of the public can provide comments. Only after the comment period will an agency like the CFPB issue a regulation.
If you have questions or concerns about your rights as a consumer, and experienced Oak Park consumer protection lawyer can help. Contact the Emerson Law Firm today for more information.
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