Lobbying interests representing purchasers and collectors of debt are pushing back hard against financial legislation unveiled this week by Senate Banking Committee Chairman Chris Dodd (D-Conn.).
The bill would set up a new bureau of consumer financial protection at the Federal Reserve that would have broad rulemaking power over the financial industry. Debt collectors and debt buyers, currently overseen by the Federal Trade Commission (FTC), would face new scrutiny from the consumer bureau. Those industries are regulated under the Fair Debt Collection Practices Act (FDCPA), which is enforced by the commission.
Industry lobbyists want the FTC to remain the sole regulator and argue the new consumer office at the Fed is geared towards banks and depository institutions. Dodd's measure would give the bureau rulemaking powers over banks and non-banks, and it would have enforcement power for firms with at least $10 billion in assets.
"Moving regulatory authority over the debt collection industry to a new bureau with unprecedented powers would neither help consumers nor businesses, creating uncertainty that would hinder effective compliance with existing regulations," the associations wrote.
The lobbying associations are: DBA International, ACA International, the Commercial Law League of America and the National Association of Retail Collection Attorneys (NARCA).