Tougher Rules Coming for Debt Collectors
Richmond partner David Anthony was quoted in a February 27 Yahoo Finance article about the U.S. Consumer Financial Protection Bureau writing new debt collection rules under the Fair Debt Collection Practices Act (FDCPA), which became law in 1978 under President Jimmy Carter. The CFPB’s rule making efforts to update the FDCPA implicate a host of unsettled or challenged practices, including whether to increase the statutory damage limit ($1,000), punitive damage cap ($500,000 or 1% of the debt collector’s net worth), applicability to first party creditors and coverage of medical debt. Given the magnitude of medical debt in the United States and often crushing effect on consumers, David commented that “[he] would be surprised if they [the CFPB] didn’t find a way to attack medical debt.”
The CFPB’s rule making remains in the administrative process and is not yet final.