Financial services debt was the largest source of revenue for the debt collection industry, according to the Consumer Financial Protection Bureau's (CFPB's) annual report on its administration of the Fair Debt Collection Practices Act. The bureau said that revenue from financial services debt accounted for nearly 40 percent of debt collection revenue in 2018.
The bureau noted that after several years of growth, consumer debt surpassed its 2008 peak in 2017, rising to a new high of $13.54 trillion in the fourth quarter of 2018. However, while mortgage debt increased, the growth in consumer debt was mostly fueled by non-housing debt such as credit cards and auto loans.
The report revealed that the CFPB planned to issue a notice of Proposed Rulemaking relating to debt collections this spring. It said that the notice would address issues such as communication practices and consumer disclosures.
"The Bureau understands that the debt collection industry, by and large, wants to comply with consumer protection laws," said Kathy Kraninger, Director of the CFPB, in the report. "However, where there are bad actors who violate the law, we will take enforcement actions to protect consumers."
The report also highlighted some of the lawsuits and amicus curiae briefs filed by the CFPB and Federal Trade Commission to address the debt collection practices in the mortgage industry. They included an amicus brief on the Obduskey vs. McCarthy Holthus case on which the Supreme Court issued a ruling on Wednesday.
The amicus briefs also included one on the deficiency judgment in judicial foreclosure in the case of Cohen vs. Ditech Financial LLC. This brie addressed whether "the FDCPA applies to judicial foreclosure proceedings in state court where, under state law, the debt collector is entitled to seek a deficiency judgment against the consumer for the amount of any mortgage debt remaining after the foreclosure sale."
Read the complete report here.