Removing Barriers Blog

CUNA and Member Credit Unions Discuss Debt Collection with CFPB
Posted November 14, 2016 by CUNA Advocacy

Senior Directors of Advocacy and Counsel Leah Dempsey, Andy Price, Luke Martone, and a number of credit unions met with the CFPB, some in person and some via phone, Monday to discuss debt collection. During the meeting, the group talked about the CFPB’s outline of proposals under consideration for third-party debt collectors. They also touched on other recent CFPB debt collection activities including its recent enforcement action against a credit union for debt collection, and parts of the CPFB’s proposed payday and small dollar rule that impact credit unions statutory rights for collection activities. 

Participants in the meeting outlined to the CFPB some of the concerns credit unions have with prescriptive requirements proposed in the outline. Specifically, throughout the meeting, CUNA and the credit unions urged the CFPB not to restrict important communications between credit unions and members that can serve to help them favorably resolve outstanding debt. One credit union explained to the CFPB that members often fall into various categories for why they have an outstanding debt, which include a number of different life circumstances and challenges. It was noted that the quicker that the credit union can connect with the member and provide education and input, the more likely they can come to a favorable resolution that protects the member from other future fees or repercussions. 

The group also urged the CFPB to consult with the FCC to resolve the onerous requirements in the July 2015 TCPA that have harmed credit unions ability to communicate with their members. Additionally, they urged the CFPB to work closely with NCUA when creating policies for debt collection, especially since debt collection is directly connected to a credit unions safety and soundness. Specifically, CUNA outlined concerns with recent conflicts between CFPB debt collection policies and NCUA guidance and the Federal Credit Union Act. 

The CFPB could propose a rule for third-party debt collectors sometime in the next few months, and it is also expected that they will hold a separate SBREFA panel for first-party creditors and collectors. CUNA continues to engage with the CFPB to represent the interest of credit unions.