On April 15, the CFPB and FTC announced the release of a joint annual report to Congress administering the Fair Debt Collection Practices Act (FDCPA). The annual report highlights both agencies' efforts to protect and provide debt collection relief to consumers, particularly in light of the COVID-19 pandemic and resulting economic hardship.
The report also cites to complaints and recent FTC and state actions regarding "abusive practices of some financial institutions towards small businesses." In CFPB Director Rohit Chopra's accompanying blog post, he notes that "[d]uring the pandemic, small businesses were targeted by debt collectors" and "face similar debt collection as encountered by consumers." While the report also acknowledges that the "FDCPA generally does not cover the collection of small business debt" and that addressing debt collection issues affecting small businesses "is outside the scope of the FDCPA," both the report and Chopra's blog post call for closer attention to be paid to collections issues facing small business. The CFPB calls on Congress to "determine whether additional protections would be warranted under the FDCPA to ensure there is adequate enforcement and sufficient remedies for wrongdoing [targeting small business]."
Putting it Into Practice: Despite its primary mission to protect consumers, the CFPB's "jurisdiction creep" is not far afield from its required rulemaking under the Dodd-Frank Act's Section 1071, which requires the collection of small business lending data (we previously discussed Section 1071 in an earlier blog post here). Notwithstanding the CFPB's limited purview of business-purpose financial products and services derived from Section 1071, Director Chopra's comments potentially signal a desire for an increasing role for the Bureau, especially in light of the direct statement to policymakers that consumer debt collection rules should apply to protect small businesses as well. These latest statements suggest yet another attempt by the CFPB to aggressively test the limits of its jurisdiction.
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