On June 17, ACA International – a trade group representing collection agencies and attorneys, creditors, debt buyers, and industry service providers – presented substantive comments to the Consumer Financial Protection Bureau in response to the agency’s recent request for information related to the consumer credit card market. The CFPB’s request contained four debt collection questions, in particular:
- What practices are used to minimize losses from delinquent customers prior to charge off, and what are the results of such practices?
- What practices are used to secure recoveries following charge off, and what are the results?
- To what extent do card issuers use third-party contingency collection agencies for collections of accounts and how are such relationships managed?
- To what extent do card issuers sell charged off accounts to debt buyers, and on what terms and with what restrictions?
ACA reached out to its members in a cooperative effort to provide the CFPB with insights into industry compliance efforts from the perspective of collecting consumer credit card debt. The comments explained, among other things, the accuracy standards employed by its members, as well their robust compliance management and audit systems.
According to the CFPB, it will use the comments received in response to the Request to guide future policy-making. Pursuant to its responsibilities under the Credit Card Accountability, Responsibility, and Disclosure (“CARD”) Act, the CFPB is tasked with reviewing the state of the consumer credit card market every two years. This second review (the first occurred in October 2013) specifically focused on the impact credit card debt collection practices have had on the market.