CFPB Director: National Plan Needed for Debt Collection Regulation

At a meeting of state attorneys general Tuesday, Consumer Financial Protection Bureau Director Richard Cordray called for cooperation between the new federal agency and the states in regulating the debt collection industry.

Cordray, speaking at the Spring Meeting of the National Association of Attorneys General in Washington, called on the states to collaborate with the CFPB on a “national strategic plan” to regulate the accounts receivable management industry.

“We want to expand on what you already do so well, and we want you to take advantage of new resources we bring to the arena, including new analytical tools and insight into market trends,” said Cordray.  “Our goal is to help the honest debt collectors do their jobs responsibly and see that the rest are either rehabilitated or run out of business once and for all.”

Director Cordray expressly referenced the CFPB’s announcement last month that it will be supervising the largest debt collectors.

“By comprehensively assessing large collectors, as well as many of the bank creditors who originate the debt, supervision would allow us to understand and address the systemic problems posing risks to consumers,” he said.

Central to the collaboration between the states and the CFPB is a proposed framework for sharing data. Cordray noted that his agency is close to finalizing an agreement that will be sent to all of the states to “establish a general framework to share data on consumer financial protection issues.”

The CFPB is also expected to push state regulators to use the FTC’s Sentinel complaints network more universally. Currently, only a handful of state AGs report complaints into the system, which will now be shared by the CFPB.

Cordray was the former Attorney General of Ohio.