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As soon as next week, the Consumer Financial Protection Bureau (CFPB) is expected to propose the first substantive regulations under the Fair Debt Collection Practices Act (FDCPA) since the law’s enactment in 1977. This rulemaking has the potential to substantially clarify and modernize many of the FDCPA’s requirements, with important implications not only for debt collection agencies and others who fit the law’s narrow definitions of “debt collector,” but for any entity engaged in the collection or sale of consumer debts.

Interest among industry and consumer-group stakeholders likely will be intense: An earlier agency notice about possible subjects for FDCPA rulemaking drew over 23,000 written comments to the CFPB, and a concrete proposal like the one forthcoming could generate many more. That level of interest is not surprising, given that debt collection activities consistently have ranked either first or second on the list of areas generating the highest number of consumer complaints to the Bureau. According to some press reports, the proposal may be released Wednesday, May 8, in connection with a CFPB Town Hall hosted by Director Kraninger.

Given the likely implications and widespread interest in the proposal, this alert serves as a primer on the anticipated rulemaking, both by placing it in context through a brief summary of its background, and by focusing on topics that the proposal is likely to cover.…

Continue Reading Primer on the CFPB’s Imminent Fair Debt Collection Practices Act Rule Proposal

On Wednesday, Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger delivered her first policy speech since succeeding Mick Mulvaney as head of the CFPB in December. Forecasting the Bureau’s agenda over the coming months, Kraninger promised that, among other things, the Bureau will publish within weeks proposed rules to implement the Fair Debt Collection Practices…

On Thursday, March 28, California Governor Gavin Newsom announced that Manuel “Manny” Alvarez, 38, has been appointed Commissioner of the California Department of Business Oversight (DBO). Alvarez is currently general counsel, chief compliance officer and corporate secretary at Affirm Inc., the point-of-sale lending platform founded by PayPal’s Max Levchin in 2012. Alvarez’s appointment requires California…

The CFPB is proposing revisions to its 2016 no-action letter (“NAL”) policy and is planning to establish “BCFP Product Sandbox,” a regulatory sandbox that would encourage financial institutions to explore innovative products. The revamped policy would address the shortcomings in the 2016 version and streamline the application submission and review process, thus providing banks with…

We expect the U.S. Senate to confirm, as soon as this afternoon, President Trump’s nominee to lead the CFPB as its Director, Kathy Kraninger. A positive, though razor-thin and highly contested, outcome for Kraninger appears inevitable based on the Senate’s vote just a few days ago, strictly along party lines, to invoke “cloture” on the…

This Post is a “Part II” to our recent blog post describing the CFPB’s current plans to consider new rules that may narrow lenders’ exposure to “disparate-impact” liability under the Equal Credit Opportunity Act (“ECOA”), as well as other federal developments along the same lines, particularly with respect to auto lending. Today, we report on…

In light of Veterans Day, there are some recent notable developments regarding the Military Lending Act (MLA) worth discussing. Enacted in 2006, the MLA caps the annual interest rate for an extension of consumer credit to a servicemember and/or their dependents at thirty six percent, among other protections. The MLA initially applied to a narrow…

In its recently published Fall 2018 Rulemaking Agenda, the Bureau of Consumer Financial Protection announced that it is considering future rulemaking activity regarding the requirements of the Equal Credit Opportunity Act (“ECOA”) – specifically, “concerning the disparate impact doctrine in light of recent Supreme Court case law and the Congressional disapproval of a prior…

In the latest sign of regulatory scrutiny of asset-advance companies offering consumers what regulators believe are in fact regulated “credit” under federal law and “loans” under state law, the Bureau of Consumer Financial Protection (BCFP) filed its first new lawsuit under Acting Director Mulvaney last Thursday. The complaint, filed in the Central District of California,…

Earlier this week, Acting Director Mulvaney announced the creation of a new “Office of Financial Innovation,” and appointed Paul Watkins, an official who led the Arizona Attorney General’s fintech initiatives, to lead the Office.  The new Office, which will now do the work formerly done under the Bureau’s Project Catalyst, “will focus on creating policies…