Consumer Financial Protection Bureau Flexes Its Muscle

At first, the Consumer Financial Protection Bureau, or CFPB, did not appear to wield much strength in its role as an independent federal agency charged with regulating the debt collection industry and protecting consumers.

That's likely because it was only set up in 2011, just a few years ago, as a product of the contentious political climate that followed the 2008 recession. There were problems getting a director appointed. There were problems regarding the very existence of the CFPB. Some claimed that the CFPB itself was unconstitutional.

But recently, a man's story on the Huffington Post, about how he got the CFPB to go after a bank that had wronged him and his 93-year-old mother for a relatively small sum (as compared to, say, a wrongful home foreclosure), indicates the strength the CFPB seems to have. He had written a complaint and submitted it on the CFPB's website:

"I expected one of those, 'We're sorry' replies from the CFPB. Instead, a mere four days after I had filed my complaint, I received a written apology from the bank, a waiver of all penalty fees and the promise to 'escalate this matter for further policy review.' I couldn't believe it. Elizabeth Warren's crew had come to my rescue."

So it's not that the CFPB hasn't been keeping itself busy.

But its foray into the body of law that governs abusive debt collectors - the Fair Debt Collection Practices Act, or FDCPA - indicates that the CFPB has now become serious about exercising its rulemaking authority.

As Patrick Lunsford reports for Inside ARM, the CFPB's 114-page Advance Notice of Proposed Rulemaking represents a major update to the 1977 law. But perhaps the most visible thing about the CFPB's effort is that it will get out in front of lawmakers, who have their own proposed bills regarding the FDCPA, and is much more likely to see the changes it wants through to the end.

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