There was a milestone birthday yesterday in the accounts receivable management industry, although I doubt that there was a lot of cake eaten in offices across the country. The Consumer Financial Protection Bureau turned 10 years old on July 21, and there is little doubt that the regulator has had a profound impact on the ARM industry since it was born.
The CFPB was borne out of the 2008 financial crisis, which gave us the Dodd-Frank Wall Street Reform and Consumer Protection Act. That law overhauled financial regulation in the United States in response to what was deemed to be lax oversight over the mortgage and financial markets that led to the bursting of a housing bubble and the cause of the Great Recession.
Since its inception, the CFPB has been caught in a game of political football, with Democrats and Republicans constantly sparring over the mission and independence of the agency. Republicans argued that the agency was too powerful and unaccountable, since Congress did not have control over the CFPB’s budget and, until recently, the director of the agency could only be fired for cause. Democrats argued, especially during the Trump Administration, that the agency was not doing enough to protect consumers and was too much on the side of businesses in the financial services industry. One of the CFPB’s biggest accomplishments has been its ability to survive for 10 years and to stay focused on its mission of protecting consumers from unscrupulous operators in the financial services industry.
In a blog post published yesterday, CFPB Acting Director Dave Uejio cited the $14 billion that the CFPB has obtained in the form of relief for consumers and the $1.7 billion in fines it has assessed. More than 183 million consumers and consumer accounts have seen some form of redress in the past 10 years thanks to the CFPB, Uejio noted. Consumers have filed more than 3 million complaints in that time.
“In the decade to come, we will continue to use all the tools at our disposal to empower American consumers and work to ensure the financial markets they interact with are fair, transparent, and competitive,” Uejio wrote.
The CFPB has been no stranger to the ARM industry. Do a search on AccountsRecovery.net for “cfpb” and 173 pages of results are returned. And that doesn’t even count that period where it was known as the Bureau of Consumer Financial Protection. Frequent enforcement actions taken against debt collectors accused of engaging in unfair, deceptive, or abusive acts or practices led to a period of “regulation by enforcement,” where the agency determined what was acceptable and not acceptable.
One of the biggest impacts that the CFPB has had on the ARM industry is its Debt Collection Rule, which is months away from going into effect. The regulator was just a toddler when it announced its plans to reform how debts were to be collected, and here we are, eight years later, counting down the days until the new rule goes into effect.
As the CFPB gets ready to embark on a new chapter, with a new director, it will be interesting to see how the agency reinvents itself once again and the impact it will continue to have on the ARM industry.