Oct. 25, 2012 – The Consumer Financial Protection Bureau on Jan. 2 begins supervising debt collection firms that generate more than $10 million in annual receipts under a final rule released Wednesday.
The rule, proposed this summer and discussed during a field hearing that was webcast yesterday, designates firms meeting that annual receipts threshold as “larger participants” of the debt collection market. A similar rule affecting consumer reporting agencies with more than $7 million in annual receipts took effect Sept. 30.
The supervision of larger participants among nonbank service providers is called for by the Dodd-Frank Act. The CFPB was left to define what a larger participant would be. NAFCU, in official comments, supported subjecting nonbank providers to federal supervision. Along that line, the association recommended that the CFPB look to market share, size, number of services, etc. It urged against setting a single threshold across all markets.
The CFPB so far has appeared to follow that construct, but NAFCU urged that the threshold for debt collectors, whose annual receipts average $500,000, be set lower than $10 million.
The final rule currently covers 175 debt collection firms; firms involved in debt collection number about 4,500 in all. Examination guidance is also posted online.