Blue Flower

Last week the Consumer Financial Protection Bureau released its annual report to Congress on the Fair Debt Collection Practices Act (FDCPA), as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

In this fortieth anniversary of the enactment of the FDCPA by Congress, the CFPB reviews its actions as the first federal agency to have the authority to supervise non-depository institutions, including debt collectors, in the same manner that banks have long been examined.

Among the highlights from the report:

  • The CFPB brought 10 new public enforcement actions involving debt collections in 2016, and continued litigation in three other cases that had been filed previously. In the cases that were concluded during 2016, $39 million was paid in restitution for consumers and $20 million was paid in civil penalties.
    • February 23, 2016 - Citibank, N.A.
    • February 23, 2016 – Citibank, N.A. et al.
    • February 23, 2016 – Solomon & Solomon
    • February 23, 2016 – Faloni & Associates
    • April 25, 2016 – Pressler & Pressler, LLP, Sheldon H. Pressler and Gerard J. Felt
    • April 25, 2016 – New Century Financial Services
    • Septemeber 26, 2016 – TMX Finance LLC
    • October 11, 2016 – Navy Federal Credit Union
    • November 2, 2016 – CFPB, et al. v. MacKinnon, et al. (complaint filed)
    • December 16, 2016 - Moneytree
  • The CFPB filed amicus curiae briefs in two appellate court FDCPA actions (Arias v. Gutman, Mintz, Baker & Sonnenfeldt, PC and Bock v. Pressler & Pressler, LLP), and assisted the Solicitor General’s office in preparing two amicus briefs that were filed in the Supreme Court in cases implicating the FDCPA (Sherriff v. Gillie and Midland Funding, LLC v. Johnson). All four cases are still pending.
  • The Federal Trade Commission (FTC), which shares enforcement responsibility for the FDCPA, brought or resolved 12 debt collection cases in 2016, including a focus on phantom debt collection and a sweep on unlawful text messages and emails as a means of collecting debt.
  • In July 2016 the Bureau released an Outline of Proposals Under Consideration for debt collection, and convened a SBREFA panel to obtain input on how those proposals would affect small businesses.
  • In January 2017 the Bureau released two studies on the debt collection market: a white paper about the Online Debt Sales market, and a report on Consumer Experiences with Debt Collection, based on the Bureau’s Survey of Consumer Views on Debt.
  • Ongoing activities in supervision, complaint collection, and consumer education continued. No significant milestones were reported.

The report provides industry estimates including share of collections by business model (contingency, debt purchase, etc.) as well as a breakdown by industry breakdown (data provided by IBIS World, December 2016).