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CFPB on Thursday released an outline of proposals under consideration that would place restrictions on how debt collectors communicate with debtors and would simplify the process for those debtors who want to dispute their debt.

"While CFPB's outline is targeted toward third-party debt collectors, NAFCU is analyzing the provisions under consideration to assess any direct or indirect impact on credit unions," said NAFCU Director of Regulatory Affairs Alexander Monterrubio. "Credit unions are good actors that engage in responsible, fair debt collection practices and work to make sure their members' financial needs and goals are met."

A survey by NAFCU's research team this June on credit union debt collection practices found that 80 percent of respondents had waived late fees, interest or fines for delinquent accounts due to member hardship during the last year.

The outline was discussed during yesterday's CFPB held public field hearing in Sacramento, Calif. A representative from Schools First Federal Credit Union shared concerns about credit unions possibly being swept under the rule's requirements even though these proposals only address third-party debt collectors; he said credit unions should be exempt from the rulemaking. CFPB has told NAFCU that the bureau will address first-party debt collection later.

The outlined proposals under consideration would require debt collectors to have more information about the debt before they collect. As they are collecting, companies would be required to limit communications and disclose additional details about the debt. Furthermore, when debt collectors are responding to disputes, they would be prohibited from pursuing the debt without evidence sufficient to substantiate the indebtedness.

These outlined proposals would apply to debt collectors as defined by the Fair Debt Collection Practices Act. The bureau yesterday also released the report, "Study of Third-Party Debt Collection Operations," which is based on results from a written survey that was sent to debt collection firms, telephone interviews with a subset of the survey respondents and telephone interviews with vendors to the debt collection industry.

NAFCU was the only financial services trade association to oppose subjecting credit unions to CFPB authority under Dodd-Frank. The association maintains that CFPB should exercise its authority to exempt credit unions from regulations aimed at bad actors.