Director Kathleen Kraninger
Consumer Financial Protection Bureau
1700 G Street NW
Washington, D.C. 20552
Comments RE: Proposed Debt Collection Rule, Docket No. CFPB-2019-0022
September 18, 2019
Dear Director Kraninger,
I write on behalf of the Wisconsin Public Interest Research Group (WISPIRG) and our thousands of members statewide to oppose much of the CFPB’s proposed debt collection rule, and to urge significant changes to its provisions.
In 2017, over 71 million Americans had a debt collection item on their credit reports. And as you may know, debt collection problems are among the leading source of complaints nationally to both the CFPB and the Federal Trade Commission (FTC).
Debt collection problems, including mistakes, affect every sector of society:
- Service members may be denied security clearances due to excessive debt.
- In 2016, one out of two families headed by persons 75 or older – twice as many as in 1989 – were in debt.
- People of color face more debt collection problems than others, including high rates of garnishment.
- Skyrocketing student loan debt has resulted in exploding levels of collection.
- Medical debt accounts for over half of all collection items on credit reports. Collectors claim that “bad lifestyle choices” are to blame, when in truth serious illness or injury and accompanying medical debt could befall nearly anyone.
We are especially concerned about the following provisions in the Bureau’s proposal:
- The proposal allows too many calls to debtors – seven calls per debt per week. (If a debtor had eight debts this would mean 56 calls per week.)
- The proposed rule allows emails, direct messages and texts without the debtor’s prior permission.
- The proposal facilitates invasion of consumer privacy by allowing debt collectors to leave so-called “limited content” messages about “accounts” with third parties or on answering machines.
- The proposed rule lets collection attorneys sue consumers without original account-level documentation. In other words, collectors wouldn’t be required to make sure they were taking the right person to court for the right debt.
- The proposal allows collection of so-called “zombie debt” that is so old that the deadline for a lawsuit has already passed.
While these are significant shortcomings, we welcome some positive aspects of the proposal and urge you to make the following improvements to those items:
- The proposal limits collectors to one conversation per debt per week. Recommendation: Limit collectors to one conversation per week per consumer, not per debt as currently proposed.
- The proposed rule allows consumers to stop phone communications. Recommendation: Clarify that “stop calling” requests can be made verbally and should apply to all calls from the collector, unless the consumer asks to stop calls to one number only.
- The proposal prohibits the sale of certain debts. Collectors could not sell accounts that were paid, discharged in bankruptcy, or where an identity theft report was filed, for example. Recommendation: Prohibit the sale of time-barred or disputed debts as well.
If you have any questions, please contact Ed Mierzwinski in WISPIRG’s Washington, D.C. office. He can be reached at 202-461-3821 or edm[AT]pirg.org.