Wednesday, September 21, 2016

CFPB Provides Some Hints as to First Party Debt Collection Rules

In prepared remarks to the National Association of Federal Credit Unions, the CFPB provided some hint as to what we can expect with regard to first party debt collection rules.  In July, the CFPB released a debt collection proposal regarding traditional third party debt collectors.  At the time, the CFPB stated that it would also be releasing a debt collection proposal addressed to first party debt collectors at a later date.  While the two proposals are being released separately, we expect they will ultimately be addressed in rule making at the same time.

Cordray's prepared remarks to the National Association of Federal Credit Unions indicate that a first party debt collection proposal may be coming soon. Banks, credit unions and other financial service companies can expect the proposal to address the documentation a bank or other lender must provide to third party debt collector prior to any debt collection.  Additionally, Cordray's prepared remarks suggest that we may also see provisions addressed to first-party debt collectors setting forth specific dispute resolution procedures.   

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