The CFPD, Consumer Financial Protection Bureau, proposed a rule recently that would allow for it to include large debt collectors and consumer reporting agencies under its supervision of nonbank entities.
The Dodd-Frank Act has given the CFPD until July 21st, 2012 to define the “larger participants” of nonbank groups that encompass consumer financial products and services.
The proposed rule treats debt collectors with more than $10 million in annual receipts and consumer reporting agencies with more than $7 million in receipts as “larger participants.” The CFPB estimates that this would subject approximately 175 debt collection firms (comprising 63% of annual receipts in that market) and 30 consumer reporting agencies (comprising 94% of the annual receipts in that market) to supervision.
In selecting these two markets for its initial rulemaking, the CFPB emphasized the considerable impact that debt collectors and consumer reporting agencies have on American consumers. The CFPB further noted that it used annual receipts as an indicator of size because it “approximates market participation” in those two markets, but that it might use different criteria to assess size in other markets.
The comment period on the proposed rule will be open for 60 days from the date of publication of the proposed rule in the Federal Register.
For more information about this topic, please contact Rita Lin at Morrison & Foerster LLP in San Francisco.