This posting was written by Sarah Borchersen-Keto, CCH Washington Correspondent.
A proposed rule from the Consumer Financial Protection Bureau (CFPB)would place debt collectors and consumer reporting agencies that qualify as larger market participants within the bureau’s nonbank supervision program, marking the first time these activities would face federal supervision.
The proposed rule would cover debt collectors with over $10 million in annual receipts from debt collection activities. The CFPB estimates that approximately 175 debt collection firms would be under their supervision, accounting for 63 percent of annual receipts from the debt collection market.
Meanwhile, consumer reporting agencies with over $7 million in annual receipts would be subject to CFPB supervision, representing approximately 30 consumer reporting companies that account for about 94 percent of annual receipts.
“Consumer financial products and services have become more complex over the years and they have expanded well beyond traditional banks,” noted CFPB Director Richard Cordray.
The CFPB has until July 21, 2012 to issue an initial rule defining larger market participants that could come under CFPB supervision. The bureau is seeking public input as to which markets to include in the initial rule and which data sources the bureau might use to determine larger participants in nonbank markets.
The CFPB noted that as it adds new markets to monitor it will choose the best criteria for determining market participation, as well as the appropriate thresholds for individual markets.