CFPB Taskforce Report (Part 1): A Deep Dive Into the 4 Main Debt Collection-Related Topics of Volume 1

Yesterday, the Consumer Financial Protection Bureau (CFPB) released the report issued by its Taskforce on Consumer Financial Law. The report consists of two volumes and clocks in at 700 pages combined. Volume 1 consists of a scholarly analysis of the consumer financial law sphere, while Volume 2 focuses on 100 recommendations that the Taskforce makes to the Bureau's Director. Debt collection makes an appearance in Volume 1, but none of the recommendations specifically focus on debt collection. However, some of the recommendations might be of interest to industry members. Over the next two days, we'll provide detailed summaries of related sections. Below we discuss the four major areas where debt collection appears in Volume 1. Tomorrow in Part 2, we'll go over the related recommendations.

The intricate web of debt collection, consumer protection, and the overall impact on consumers

Section 6.2 of Volume 1 contains a comprehensive analysis of the interplay between consumer protection laws and regulations and consumer benefit/detriment, painting a picture of a sliding scale that requires a delicate balance. The Taskforce rejects a "zero-sum" approach to regulation — i.e., that deregulation will help industry and harm consumers, whereas more regulation will harm industry and help consumers in equal but opposite amounts — and instead states that there is a sweet spot that must be met or else the laws and regulations will simultaneously both help and harm the most vulnerable consumers, causing a problematic quagmire.

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