Posted Jul 10, 2013 01:50 pm CDT
For decades, federal law has protected consumers from being harassed by debt collectors, including law firms.
But there was one big loophole in the Fair Debt Collection Practices Act: It doesn’t apply to the actual debtors, such as banks with credit card operations, only the third parties that collect delinquent debt for them.
Now the new Consumer Financial Protection Bureau is stepping up to deal with that enforcement gap, reports Bloomberg. In addition to reviewing lenders’ collection practices and potentially fining them, the CFPB also is looking at discriminatory auto lending practices, overdraft fees and payday loans.
“It doesn’t matter who is collecting the debt–unfair, deceptive or abusive practices are illegal,” said Richard Cordray, the director of the CFPB, in a statement e-mailed to the news agency.
Wall Street Journal (sub. req.): “J.P. Morgan Review Finds Errors in Debt-Collection Lawsuits “