insideARM Weekly Recap – Week of June 10th, 2024

The debt collection industry is in a constant state of flux. The goal of the insideARM editorial team is to filter out the noise and pick the 3 pieces of news you need to hear each week. Last week we brought you a double helping of the CFPB and a legislative trend that is picking up steam. Continue reading for the highlights from the week of June 10th and why we felt it was important for you to see them.

We kicked off the week with an article about, surprise surprise, the CFPB. The Bureau maintained its momentum from an extremely active month of May by issuing Consumer Financial Protection Circular 2024-03 on June 4th. The guidance warned that terms and conditions in contracts with consumers may violate the CFPA’s UDAAP prohibition. The Circular and accompanying press release suggest that the CFPB will look to enforce this law “against companies…that deceptively slip these terms into their fine print.” While this reinforces what the CFPB thinks of debt collectors and those that provide consumer financial products, it also adds something else to consider when buying or agreeing to service/collect debt. The issuing of a circular on the topic means that enforcement action may be imminent.

On Wednesday, we highlighted an article on a new consumer data privacy law. This new legislation comes to us from Minnesota as they became the 18th state to enact legislation in this area. The language of this bill goes further than many previous states, bestowing on Minnesota consumers the right to investigate profiling issues and greater visibility into 3rd party disclosures of their data. Those operating or looking to operate in Minnesota will need to review the intricacies of this bill to ensure compliance. It is also important to see this law and the recent Minnesota Debt Fairness Act as an indication of the direction the state’s legislature is moving when it comes to consumer protection and debt collection.

Thursday brought more breaking news from the CFPB. The Bureau put out a proposed rule that takes aim at a hot-button topic in debt collection: medical debt. While the highlight of the proposal is the ban on reporting medical debt, the rule would also prohibit lenders from considering medical information in most eligibility determinations, ban the repossession of medical devices, and does not close the door on considering credit cards and installment loans as medical debt. This move by the CFPB should not come as a surprise as they have spent much of the last year discussing medical debt (here, here, here, and here for example.) For those in medical debt collections, the road to payment will become that much more difficult.

Thank you again for joining us for a recap of last week’s news. For more news from this month click here for a recap from the week of June 3rd.

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