Strict Debt Laws Harm Consumers, Reduce Credit Access According to Government Study ("The Debt Collection Drill")
Debt collectors will long remember 2013 as a watershed year for the regulation of our industry. The Consumer Financial Protection Bureau ("CFPB") issued its Advance Notice of Proposed Rulemaking while continuing on-site examinations of debt collector larger market participants, enforcement actions, and publishing data from its complaint portal. The Federal Trade Commission ("FTC") issued a record fine against a debt collector and joined the CFPB in several important amicus briefs submitted in pending Federal Debt Collection Practices Act ("FDCPA") cases. Numerous states also tightened regulation on the debt industry. All of this regulation of the debt industry is apparently aimed at aiding consumers. However, a recent study published by the Federal Reserve Bank of Philadelphia empirically established that stricter debt laws actually harm consumers by reducing their access to credit.
In this episode of The Debt Collection Drill, Moss & Barnett attorneys John Rossman and Mike Poncin discuss this Federal Reserve Bank study from May 2013 and its impact on future regulation of the debt industry.