Warning from trade groups: Proposed CFPB debt collection rules could snag credit unions

Advocacy groups are worried that rules aimed at third-party debt collectors could be used against credit unions.

by David Baumann, CU Times

A loophole in the CFPB’s proposed debt collection rules could allow the agency to take action against credit unions even though the rules were not intended for those institutions, trade groups recently warned.

The CFPB has said the controversial debt collection rules are intended for third-party debt collectors.

However, trade groups are warning that a section of the rule would allow the CFPB to sanction any debt collector under the agency’s Unfair, Deceptive or Abusive Acts or Practices.

“Credit unions are not the type of debt collector the [law] intended to limit or prohibit from making contact with consumers,” NAFCU Regulatory Affairs Counsel Kaley Schafer wrote in a letter to the agency.

 

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