July 29, 2010

By: Michelle Grinberg, Esq.

On July 21, 2010, President Barack Obama signed into law a financial reform bill which, among other things, will create the Consumer Financial Protection Bureau (“CFPB”).  One of the CFPB’s responsibilities will be enforcement of the Fair Debt Collection Practices Act (“FDCPA”).  Prior to the CFPB, the Federal Trade Commission (“FTC”) was the sole regulator of the FDCPA.  However, once the CFPB is created, the FTC will share enforcement responsibilities.  Exactly how dual agency enforcement of the FDCPA will play out is still unknown.  

The CFPB will be permitted to set rules regarding the way debt collectors communicate with consumers.  However, any substantive changes to the FDCPA are still in the hands of Congress.  When signing the bill, President Obama voiced his desire to ensure that there are clear rules that will be followed in order to prevent abuse of consumers by collectors.