CFPB Report November 7, 2014

CFPB Issues Report on Seniors and Debt Collection Complaints

On Wednesday, November 5, 2015, the CFPB released a report highlighting debt collection as the chief complaints received from older Americans. "It is increasingly common for older Americans to carry debts into their retirement years, and consumers living on fixed incomes often struggle to pay off these debts," said CFPB Director Richard Cordray in a press statement. "Older Americans deserve to be treated with the respect they have earned."  


The report found:

  • Collectors hounded older Americans about medical debt: Older Americans described being confused and frustrated because collectors attempted to collect medical expenses while the consumer was simultaneously attempting to correct billing mistakes or waiting for providers and insurers to resolve medical disputes. For example, older consumers reported frequent and repeated attempts to collect medical bills already covered by insurance. Another common complaint from older consumers was first learning about an overdue bill from checking their credit report.
  • Collectors attempted to collect on debts of deceased family members: Older consumers described collectors' repeated attempts to collect debts of deceased family members. Many of the consumers complained debt collectors continued to call or send collection letters after they have informed debt collectors they are not personally responsible for the debt, or there is no money left in the deceased borrower's estate. Some complaints described collection attempts made years after probate is concluded. Many consumers expressed anguish about collectors ignoring their requests to cease attempts to collect the debt of a deceased relative.
  • Collectors illegally threatened to garnish the federal benefits of older Americans: Older consumers reported debt collectors threatening to garnish Social Security, Supplemental Security Income or Veterans' benefits, even though these funds ordinarily are not subject to garnishment by collectors. According to the complaints, these threats caused older consumers significant distress, especially when they rely on federal benefits to pay essential living costs.  

The CFPB also issued a consumer advisory aimed at helping seniors navigate debt collection challenges.


Inspector General Releases Work Plan for CFPB

On October 24, 2014, the Office of Inspector General (OIG) for the Board of Governors of the Federal Reserve System and the CFPB updated its work plan, which provides insight into the direction of the agency's work by presenting their audits and evaluations. The plan details a number of ongoing projects related to the Bureau including its diversity and inclusion process; a joint evaluation of coordination between the CFPB and other regulatory agencies; a risk assessment of the CFPB's government charge card programs; an audit of the Bureau's headquarters renovation costs, an audit of the agency's information security program, an audit of the CFPB's public Consumer Complaint Database, and an audit of the CFPB's distribution of funds from its Civil Penalty Fund, among other ongoing projects.

CBO Releases Cost Estimate on Independent CFPB-OIG

On Monday, November 3, 2014, the Congressional Budget Office (CBO) released cost estimates for proposed legislation to create an independent Office of Inspector General (OIG) for the CFPB. CBO found if the bill were enacted into law, it would increase budget deficits by $49 million over the 10-year period. The "Bureau of Consumer Financial Protection-Inspector General Reform Act of 2013," or the "CFPB-IG Act of 2013" (H.R. 3770/S. 1310) would create an Inspector General (IG) who is independent of the Federal Reserve System. Under current law, the CFPB shares an IG with the Federal Reserve. Unlike most major agency IGs, the Federal Reserve IG is a "designated federal entity IG" hired by the Federal Reserve Chairman, rather than appointed by the President with the advice and consent of the Senate.

Court Strikes Down HUD Disparate Impact Rule

On Monday, November 3, 2014, the U.S. District Court for the District of Columbia, in American Insurance Association v. HUD, vacated HUD's Disparate Impact Rule, holding that HUD violated the Administrative Procedures Act when it applied the Fair Housing Act ("FHA") to disparate impact because "FHA unambiguously prohibits only intentional discrimination." Granting Plaintiff's Motion for Summary Judgment, the court concluded FHA only applies to disparate treatment because: 1) the rule contradicted the plain language of the statute; 2) the rule was counter to congressional intent; and 3) the court has the power to interpret the rule.


This is the first time the U.S. District Dourt for D.C. has ruled on the issue, but other courts have reached a contrary opinion. Significantly, the U.S. Supreme Court is expected to finally decide the matter this term in ICP v. Texas Department of Housing, which is pending.

Financial Literacy Education Commission Hosts Meeting

On Wednesday, November 6, 2014, the Financial Literacy Education Commission (FLEC) met at the U.S Department of Treasury to discuss ongoing initiatives to improve financial literacy in the nation's workforce. Greg Long, the Executive Director of the Thrift Savings Plan discussed financial education challenges in the federal workforce, especially for making the best decisions when it comes to saving. There also was discussion about how companies can work with their employees to improve financial education whether it is better information on 401k plans, or day-to-day financial decisions.


"We are intent on building the case to convince private sector companies about the benefits of financial wellness programs in the workplace. Our aim is to encourage more companies to create and adopt their own plans for providing resources and tools to their employees about how to navigate the financial marketplace," said Director Cordray in his opening remarks.


The FLEC is chaired by the Secretary of the Treasury, and the CFPB Director serves as the vice chair.Additional speakers at the meeting included the Assistant Secretary of Employment and Training for the U.S. Department of Labor, and additional representatives from the Department of Labor, CFPB, and the Department of Agriculture.

CBA TCPA Petition Open for Comment

The Federal Communications Commission (FCC) is accepting comments through November 17, 2014 on CBA's Petition to further define aspects of the Telephone Consumer Protection Act (TCPA). As previously reported, CBA filed a petition asking the Commission to define "called party" as "intended recipient" for purposes of the TCPA prior express consent requirement. CBA met with the Commission to advocate on behalf of its petition and plans to meet with them again in the coming weeks. Interested parties may contact Kate Larson at (202) 552-6366 with questions about the petition or comment submission procedures.