February 28, 2014

Meyster writes CFPB on CU impact in debt collection ANPR

March 3, 2014 – NAFCU Regulatory Affairs Counsel Angela Meyster on Friday urged CFPB to consider the impact on credit unions, which are member-owned, of its advance notice of proposed rulemaking on debt collection practices.

Meyster noted concern that the bureau was using the same ANPR for both credit unions collecting on their own debt obligations and third-party debt collectors. "Credit unions' priorities are to bring the loans current and return to normal member service relationships," she wrote. "This continuing relationship is very different from the relationship between a third-party collection agency and a debtor associated with an account referred to the collection agency."

Meyster reminded that credit unions, as member-owned institutions, work to maintain and support relationships with their members.

CFPB's ANPR poses 162 questions, some of them pertaining to creditors. The questions address both creditors' engagement of third parties for debt collection services and the types of information they provide debt collectors at the outset. Meyster asked CFPB to release guidance credit unions can use in designing their own policies and procedures.

The bureau is considering a rulemaking under authority it possesses under the Fair Debt Collection Practices Act. It says it may also, through this rulemaking, address other concerns related to debt collection under its Dodd-Frank Act authority to promulgate rules addressing unfair, deceptive and abusive acts or practices and set requirements for disclosures to consumers.

CFPB only has direct supervision and enforcement authority over institutions with $10 billion or more in assets, but its rules apply to all institutions regardless of asset size. NAFCU is the only credit union trade organization that opposed placing credit unions under direct CFPB regulation.