The banking, lending, and debt collection industries will have to wait a bit longer than expected for the Consumer Financial Protection Bureau’s (CFPB) progress on the debt collection rulemaking. This is the second delay since the U.S. government independent agency launched its advanced notice of proposed rule making in November 2013. The pre-rule activities related to debt collection, which were initially set for April 2015, are now postponed to December 2015 – and this is no guarantee that formal action will actually take place.
The CFPB, which was launched in 2011, is dedicated to Americans’ financial protection — whether they are applying for a mortgage, choosing among credit cards, or using any number of other consumer financial products.
Debt collection is the agency’s largest source of complaints per month. So in November of 2013, the CFPB started collecting information on issues such as the accuracy of information used by debt collectors and how to ensure that consumers know their rights. The CFPB received 23,000 comments and 74,000 consumer complaints by November 2014, further testifying to its sensitivity and need for regulation.
In the meantime, BillingTree, specialized in tech savvy electronic payment services, revealed last month that collection agencies are on the edge of explosive growth in adopting payment collection and processing technologies. While collection agencies have to make sure technologies are in line with regulations, the ongoing use of outdated payment methods like paper checks is in itself a major threat to compliance, according to BillingTree, as it increases the risk of human error during payment reconciliation.
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