Business & Corporate
Our Mini-Theme: Debt Collection Issues Reign in the Brave New World of Consumer Financial Services
This month in Business Law Today, we consider one of the leading issues in consumer financial services law: debt collection. The debt collection industry is feeling enormous and unprecedented pressure from both debtors’ attorneys, who are benefitting from the federal Fair Debt Collection Practices Act’s (FDCPA) fee shifting provision, and federal regulators, who are just now venturing into uncharted regulatory territory. Until 2010, the debt collection industry never had a regulator with rulemaking authority at the federal level. Instead, federal courts created a complex body of case law interpreting the FDCPA, with wide variations across jurisdictions. But the Dodd-Frank Act has the potential to change all of that by enabling the Consumer Financial Protection Bureau (CFPB) to make rules under the FDCPA; previously, the Federal Trade Commission (FTC) could enforce the FDCPA, but could not make rules. In its third year of existence, the CFPB is starting to address debt collection while consumers are flooding courts with suits against debt collectors under the FDCPA and its state law counterparts.