The one market numerous individuals have been waiting for the Consumer Financial Protection Bureau to start watching is debt collection agencies. The CFPB does have the mandate to do so, as they are non-bank financial agencies. The agency has also informed a number of corporations in the debt collection business that they will be under CFPB direction starting in Jan.
CFPB tells debt collection companies a new sheriff is in town
Debt collectors are not all that bad the majority of the time, but there are a few bad ones that given the rest a bad name. The market and the people working in it are hated by most.
In 2011, over 180,000 grievances were made about debt collectors to the Federal Trade Commission, according to the New York Times. That is a ton of growth from 2000 when it was only 13,950 complaints. Most of the bad activity is clearly with smaller firms since only 21 percent of grievances to the Federal Trade Commission were from the top 100 debt collectors.
Many have been waiting for the Consumer Financial Protection Bureau to bring in the industry's practices and curb abuses and the bureau has informed debt collectors that there is a brand new sheriff in town.
Start of new guidelines
Starting January 2, 2013, debt collectors will officially be under Consumer Financial Protection Bureau supervision. The agency asserts that it wants debt collection companies will have to clearly identify themselves and disclose the amount of debt owed, as well as communicates "civilly and honestly" with people they try to collect a debt from. Granted, people should pay their personal loans and other obligations, but that doesn't mean they should be subjected to abuse.
The Dodd-Frank Act created the bureau and is what allows the CFPB to deal with non-bank financial institutions.
However, the direction doesn't bring even the greater part of debt collectors under its purview. Consumer Financial Protection Bureau direction, according to the Washington Post, will cover those with $10 million or more in yearly receipts, or about 175 of the 4,500 debt collection agencies operating nationwide. However, they also represent 63 percent of the business done by the market, which according to the New York Times makes up roughly $12.2 billion per year as a whole.
Reprieve or token gesture
It is unknown if this will actually help the customers. Though the top 100 accounted for 21 percent of grievances, that is also a lower rate of complaint; roughly 5 per 1 million people, than for other industries, according to Forbes.
The Consumer Financial Protection Agency is working on further rules to regulate the market, but as Forbes points out, regulating the top players is not as pressing as it might seem. By virtue of being the largest firms, they work with the largest creditors, which mean much tighter scrutiny over practices.
CFPB tells debt collection companies a new sheriff is in town
Debt collectors are not all that bad the majority of the time, but there are a few bad ones that given the rest a bad name. The market and the people working in it are hated by most.
In 2011, over 180,000 grievances were made about debt collectors to the Federal Trade Commission, according to the New York Times. That is a ton of growth from 2000 when it was only 13,950 complaints. Most of the bad activity is clearly with smaller firms since only 21 percent of grievances to the Federal Trade Commission were from the top 100 debt collectors.
Many have been waiting for the Consumer Financial Protection Bureau to bring in the industry's practices and curb abuses and the bureau has informed debt collectors that there is a brand new sheriff in town.
Start of new guidelines
Starting January 2, 2013, debt collectors will officially be under Consumer Financial Protection Bureau supervision. The agency asserts that it wants debt collection companies will have to clearly identify themselves and disclose the amount of debt owed, as well as communicates "civilly and honestly" with people they try to collect a debt from. Granted, people should pay their personal loans and other obligations, but that doesn't mean they should be subjected to abuse.
The Dodd-Frank Act created the bureau and is what allows the CFPB to deal with non-bank financial institutions.
However, the direction doesn't bring even the greater part of debt collectors under its purview. Consumer Financial Protection Bureau direction, according to the Washington Post, will cover those with $10 million or more in yearly receipts, or about 175 of the 4,500 debt collection agencies operating nationwide. However, they also represent 63 percent of the business done by the market, which according to the New York Times makes up roughly $12.2 billion per year as a whole.
Reprieve or token gesture
It is unknown if this will actually help the customers. Though the top 100 accounted for 21 percent of grievances, that is also a lower rate of complaint; roughly 5 per 1 million people, than for other industries, according to Forbes.
The Consumer Financial Protection Agency is working on further rules to regulate the market, but as Forbes points out, regulating the top players is not as pressing as it might seem. By virtue of being the largest firms, they work with the largest creditors, which mean much tighter scrutiny over practices.
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