ABA Letter to CFPB on the Proposed Modernization, New Limits on Third-Party Debt Collection

Re: Notice of Proposed Rulemaking, Debt Collection Practices (Regulation F)
Docket No. CFPB–2019–0022; RIN 3170–AA41

The American Bankers Association (ABA) appreciates the opportunity to comment on the Consumer Financial Protection Bureau’s (Bureau) proposed rulemaking on the Fair Debt Collection Practices Act (FDCPA), published in the Federal Register on May 21, 2019. The Bureau’s proposed rule will amend Regulation F to impose strict limits on how frequently debt collectors may call consumers, and to provide restrictions on how collectors may use email, voicemail, and text messaging to contact consumers, communication forms that did not exist at the time of passage of the FDCPA. The proposal would also restrict the transfer, sale, or placement of debt in certain instances, and it would prohibit suing or threatening to sue to collect on debts past the applicable statute of limitations.

The consumer credit market is a major component of the United States’ economy, with $13.86 trillion in outstanding debt. Collections are a critical part of that credit ecosystem, as collections reduce creditor losses from non-payment and allow credit to remain affordable and accessible to the broadest population of consumers. Access to credit allows consumers to use future income to purchase goods and services that might otherwise be out of reach if the consumer had to pay the entire cost at the time of purchase. However, if the ability of a lender to recover balances due is compromised, lenders will be forced to limit access to credit and/or raise the cost of credit. All consumers would feel the impact of credit tightening, not just those who are subject to debt collection, and broader effects would ripple throughout the U.S. economy.