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CFPB’s Proposed Debt Collection Rule Faces Strong Bipartisan Opposition

Wednesday, September 11, 2019
Melissa Stegman

"Survey also reveals that one in five Americans have been contacted by a debt collector in the past twelve months, including higher numbers in communities of color, among lower-income people, and military families."

WASHINGTON, D.C. - Strong majorities across parties oppose the Consumer Financial Protection Bureau's (CFPB) proposed debt collection rule including medical debt, according to a new poll released by Americans for Financial Reform (AFR) and the Center for Responsible Lending (CRL). The poll was conducted by the bipartisan team of Lake Research Partners and Chesapeake Beach Consulting.

View the polling memo on CFPB proposed debt collection rule.

In its proposed rule, CFPB Director Kathy Kraninger is sanctioning consumer harassment by allowing debt collectors to: call consumers seven times per debt, per week; send unlimited emails, texts, and social media messages without consumer consent; allow debt collectors to collect very old "zombie debts" where the time to sue has expired; and file baseless lawsuits by making it easier to sue the wrong consumer, for the wrong amount.

In AFR and CRL's poll, 76 percent of likely voters showed concern about allowing debt collectors to leave general messages for people in places that are not private, such as at the workplace, and 74 percent of likely voters are concerned with allowing debt collectors to contact people by private messaging on social media platforms like Twitter and Facebook.

And, nearly 70 percent of voters are concerned with the CFPB allowing debt collectors to send collection notices by email or text without verifying that the email address or phone number is still active or accessible.

"It should not surprise any of us that Americans don't support government-sanctioned harassment by debt collectors via phone, email, or text," said AFR Senior Policy Counsel Linda Jun. "And yet that's exactly what the Kraninger CFPB is proposing. The agency needs to withdraw this plan and come up with one that actually protects consumers."

"The poll is clear--Americans don't want CFPB Director Kathy Kraninger to give debt collectors a license to harass and intimidate consumers," said CRL Senior Policy Counsel Melissa Stegman. "A consumer-first debt collection rule should protect people—and particularly people of color and active duty military members, veterans, and their families—from time-barred ‘zombie-debt.' The CFPB should seriously reconsider the frequency and methods by which debt collectors would be able to contact consumers."

Additional key polling concerns on CFPB's proposed debt collection rule:

  • Seventy-one percent of voters are concerned that debt collectors will be permitted to collect very old debts enabling debt collectors to collect payments in order to restart their ability to sue on those debts after time to sue has expired;
  • Seventy percent of voters are concerned that debt collectors will be allowed to send an unlimited number of emails to collect debts; and
  • Sixty-nine percent of voters are concerned that debt collectors will be allowed to send text messages to people without the person's permission.

Since the creation of CFPB, abusive debt collection complaints have been at the top of consumer complaints filed with CFPB and the Federal Trade Commission. Yet, the CFPB, under Director Kraninger, has proposed rulemaking that would favor these financial predators instead of consumers. Debt collection abuses are harmful no matter where they occur, but disproportionately burden communities of color due to systemic discrimination in housing, employment and financial services.

In its early years, CFPB went after debt collectors and won key important consumer victories. Under CFPB's first director, Richard Cordray, the agency filed more than 25 federal enforcement actions against debt collectors and creditors for engaging in deceptive and abusive debt collection activities. Collectively, the cases have brought more than $300 million in restitution and another $100 million in civil penalties have resulted from these filings.

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