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April 17, 2012 – NAFCU, while generally supportive of the Consumer Financial Protection Bureau's proposed rule on "larger market participants," on Monday urged the CFPB to expand its proposal to cover more than the 4 percent of debt collection agencies it expects to capture.

The proposed rule would implement the authority the CFPB received under the Dodd-Frank Act to supervise larger market participants in the field of currently non-federally supervised providers of consumer financial services.

The proposal is the CFPB's draft of its initial rule in this area, and it has focused it on debt collection firms and consumer reporting agencies. The CFPB proposes to include debt collection firms with more than $10 million in annual receipts within its definition of a "larger market participant" subject to bureau supervision. It says that would include less than 4 percent of the entire market.

Dillon Shea, NAFCU's regulatory affairs counsel, urged that the CFPB lower that threshold.

The CFPB has said the median for annual receipts for debt collection firms is $500,000. "Clearly, the CFPB could lower the $10 million threshold considerably, include more firms within the rule's coverage and still leave the majority of debt collection firms outside the rule's coverage," Shea wrote.

Shea also urged that the CFPB move forward in establishing a system of supervision for other non-depository service providers. "NAFCU understands the agency is still relatively new and has finite resources," Shea wrote. "[T]o the extent the Bureau needs to budget those resources, they would be best directed towards markets and entities that currently are not subject to federal supervision."