CFPB— David versus Goliath

I had this friend that had a summer job as a teenager— he and a buddy pressure-washed siding on apartment buildings.

Whenever the supervisor would come around, the duo acted like they didn’t understand how to do the job very well.  The super would get frustrated, grab the washer and show them how it was done – for about ten full minutes!

What luck!  It was an excellent break!

Normally, nobody likes the boss looking over their shoulder.  They might get caught doing something the wrong way.

But what if you figure out how to use the boss to your advantage like my friend did?

The Consumer Financial Protection Bureau (CFPB) is a government created agency with the power to oversee, audit and even punish banking and collection agencies.

cfpb

If the CFPB finds that acts have been committed which it believes are harmful to consumers or even that the internal policies are not sufficient to protect consumers from unfair, deceptive and abusive acts or practices (commonly called UDAAP), then those institutions will be subject to swift and harsh fines.

If you are new to the industry, the CFPB can appear to be the giant yelling, “FEE FI FO FUM,” while the collection industry collectively scurries around finding places to hide.

Why?

Good question. It doesn’t really have to be that way.

Yes, it’s true that the CFPB has the authority to unilaterally decide which practices were UDAAP and what the fines for it would be for committing them.

But it’s also true that you can use the CFPB to your advantage, like the pressure-washing boss.

When the CFPB began auditing, it looked for findings in seven categories or seven different ‘modules’. And if you will forgive the brief praise of government work, the CFPB did a smart job of presenting these modules in a logical manner.

This is one of those times when the “super” is working for you, so use them to your advantage.  CFPB has provided guidelines so that you know your shop should have written, tested materials in each of these following modules:

Module 1:        Your business model and work flow, including vendors

Module 2:        Communications (all communications to consumers)

Module 3:        Information sharing to third parties

Module 4:        Consumer complaints and dispute resolutions

Module 5:        Payment processing

Module 6:        Equal Credit Opportunity Act compliance

Module 7:        Litigation practices and knowing your legal limitations

These guidelines give debt collection attorneys and agencies that lucky break to perform well.

I don’t know about you, but if the person coming in to test me was willing to show me the test ahead of time, I wouldn’t be too intimidated about that.  And perhaps the tester wouldn’t feel like that much of a giant after all.

Now how do we get the CFPD to audit those defense attorneys?!

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s