In a memo sent yesterday to Consumer Financial Protection Bureau (CFPB or Bureau) staff, Acting Director Mick Mulvaney provided insight and guidance into his intentions for the new direction of the Bureau.

He reiterated that he intends to enforce consumer protection laws. However he made it clear that this would look different under his watch than it did under former Director Richard Cordray.

He said,

"I think it is fair to say that the previous governing philosophy here was to aggressively 'push the envelope' in pursuit of the 'mission;' that we were the 'good guys' and the 'new sherriff in town,' out to fight the 'bad guys.'

Simply put: that is what is going to be different. In fact, the entire governing philosophy of pushing the envelope frightens me a little. I would hope it would bother you as well."

He also made it clear that as government employees CFPB staff works for the people who provide credit cards as well as those who use them; those who sell cars as well as those who buy them.

He reiterated his recent announcement that the Bureau would be reviewing everything they do

As it relates to enforcement, Mulvaney said they will focus on "quantifiable and unavoidable harm to the consumer," and will not be looking for excuses to bring lawsuits.

Industry will be pleased to hear his opinion on regulation: 

"[t]he people we regulate should have the right to know what the rules are before being charged with breaking them. This means more formal rulemaking on which financial institutions can rely, and less regulation by enforcement."

Most significantly for the debt collection industry, Mulvaney announced his intention to prioritize, quoting that a far greater number of complaints received by the CFPB relate to debt collection than to prepaid cards or payday lending (other industries that received rulemaking attention prior to debt collection).

You can read the complete memo here.

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insideARM Perspective

While the Acting Director did not specifically announce a schedule, his comments suggest that debt collection may in fact rise to the top of the rulemaking agenda. Indeed, it had been sort of next on the list under Cordray. Sources with knowledge of the process had told insideARM that a Notice of Proposed Rulemaking (NPR) - the next step in the debt collection rulemaking process - had been written and was in the process of review by attorneys. If this was true, the review was suspended when Mulvaney started the job and put most initiatives on a 30-day hold. 

Of course, industry leaders have anticipated this potential opportunity, and groups have been working on proposals for the CFPB team. This may be the best chance in many years for clarity and modernization of a law enacted when our society looked very different: No cell phones, no email, no internet, virtually no self-pay medical bills or high deductibles... I could go on.


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