The Consumer Financial Protection Bureau (CFPB) has published a field guide that examiners will use to determine whether large banks and nonbanks engaged in debt collection are complying with the Fair Debt Collection Practices Act (FDCPA) and related federal consumer financial laws. The guide released on October 24 is an extension of the CFPB’s general Supervisory and Examination Manual. According to the guide, CFPB examiners will evaluate the quality of the regulated entity’s compliance management systems, review practices to ensure they comply with federal consumer financial law, and identify risks to consumers throughout the debt collection process. The guide covers the CFPB’s examination procedures for depository institutions with assets of more than $10 billion for compliance with the FDCPA, the Fair Credit Reporting Act and Regulation V, governing furnishers of information to consumer reporting agencies, the Gramm-Leach-Bliley Act and Regulation P, governing when financial institutions can share nonpublic personal information with third parties, the Electronic Fund Transfer Act and Regulation E, and the Equal Credit Opportunity Act and Regulation B. The CFPB announced that its examinations would focus on whether debt collectors are properly identifying themselves to consumers and properly disclosing the amount of debt owed, whether debt collectors are using accurate data, whether debt collectors have an adequate consumer complaint and dispute resolution process, and whether debt collectors have harassed or deceived consumers in pursuit of money owed.
Nutter Notes: Among the examination priorities expressed in the guide is the CFPB’s concern about whether regulated entities adequately oversee service providers used in conducting debt collection activities. According to the guide, the CFPB will assess whether large banks and other regulated entities request and review service providers’ policies, procedures, internal controls, and training materials to ensure that service providers conduct appropriate training and oversight of employees or agents that have consumer contact or compliance responsibilities. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) gave the CFPB supervisory authority over a variety of institutions that may engage in debt collection, including large depository institutions and their affiliates, and nonbank entities in the residential mortgage, payday lending, and private education lending markets, as well as their service providers. The Dodd-Frank Act also requires the federal banking agencies to coordinate with the CFPB to ensure that examination processes for compliance with federal debt collection laws and other federal consumer financial laws are enforced consistently, which may cause the federal banking agencies’ examination priorities to reflect those of the CFPB in areas such as debt collection.