While attending this year’s DBA International Annual Conference, I had the opportunity to hear remarks from Kent Markus, the CFPB’s Director of Enforcement, regarding the CFPB’s approach to enforcement actions generally, as well as with regard to the debt buying industry.
Mr. Markus began his remarks by stating that the CFPB “believes that people should pay the debts that they legally owe” and that the CFPB recognizes that many debt collectors and debt buyers “play by the rules” and “add value” to the debt market. Mr. Markus also stated that the CFPB “wants to support law abiding debt collectors” and to protect them from those who do not play by the rules. However, Mr. Markus expressed the CFPB’s concern that ongoing illegal activities in the debt collection industry may create a “race to the bottom” where market forces will be driven by those who can collect the most money, in the most efficient way, regardless of what the rules are. Accordingly, Mr. Markus explained that right now, the CFPB is focused on three main issues confronting the debt collection industry: data integrity, debt litigation, and debt verification/consumer disputes.
Mr. Markus further explained that it is important for debt buyers to receive accurate information from debt sellers. With respect to collection lawsuits, he noted concerns about debt buyers not having sufficient documentation about the debt, robo-signed affidavits, and adequate service of process of complaints. Mr. Markus also made clear that the CFPB’s position is that the “burden should not be placed on consumers to refute erroneous claims by debt collectors,” which is consistent with the view we expected to hear from the CFPB on this issue. We have been assisting many debt buyers and debt collectors prepare for their first CFPB exams and these are among the areas that we assess.
Mr. Markus declined our invitation to share any detail regarding the current number of active CFPB investigations or give us a breakdown of those actions between banks and non-banks, as well as across all product and market areas. While Mr. Markus would not provide specific numbers, he confirmed that there are active investigations in all of the market areas where the CFPB enforces consumer protection laws. Also, while Mr. Markus stated that some of those investigations came about as a result of an examination, others arose from internal research and observation by the CFPB into industry trends.
Finally, I asked Mr. Markus if the CFPB had any comment on the Canning decision. Given the CFPB’s statements on this issue to date, Mr. Markus’s response was not surprising:
“That is a case in one court, about the NLRB. It is a not a case about the CFPB. It is not a decision that is done, necessarily, being litigated in any way so our view is that we have a director, we have our authority, we have our responsibility to American consumers and American businesses and we intend to proceed.”