Debt Collection Industry Again Left Out of CFPB's Consumer Advisory Board

On Thursday, October 3, the Consumer Financial Protection Bureau (CFPB or Bureau) announced its appointment of members to its Consumer Advisory Board (CAB) and other councils. The new CAB, which serves to advise and consult the Bureau on consumer financial issues, contains a varied and impressive range of members. Included are fintech companies, consumer advocates, creditors, and market researchers. However, debt collection industry representatives are noticeably absent—the closest match is the representative from Scrach Services, Inc., a loan servicer.

The newly-appointed CAB contains the following members:

• Chair: Brent Neiser, Senior Director, National Endowment for Financial Education (Denver, CO) 
• Nikitra Bailey, EVP, Center for Responsible Lending (Durham, NC)
• Nadine Cohen, Managing Attorney, Greater Boston Legal Services (Boston, MA)
• Sameh Elamawy, CEO, Scratch Services, Inc. (San Francisco, CA)
• Manning Field, COO, Acorns (Irvine, CA)
• Clint Gwin, President & CEO, Pathway Lending (Nashville, TN)
• Ronald Johnson, Former President, Clark Atlanta University (Atlanta, GA)
• Tim Lampkin, CEO, Higher Purpose Co. (Clarksdale, MS)
• Eric Kaplan, Director – Housing Finance Program, Milken Institute (Washington, DC)
• Sophie Raseman, Director of Product, Brightside (San Francisco, CA)
• Rebecca Steele, President/CEO, National Foundation for Credit Counseling (Washington, DC)
• Tim Welsh, Vice Chairman Consumer and Business Banking, U.S. Bank (Minneapolis, MN)

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insideARM Perspective

Based on the new CAB membership, it is evident that the Bureau is continuing its focus on innovation. It's important to note that the debt collection industry is also trying to innovate—for instance, as evidenced by the iA Innovation Council.

In reality, debt collectors are most in need of innovation since the industry's growth has been stifled by legal uncertainty related to the outdated FDCPA, which contemplated fax machines and telegrams, not email, text, and mobile apps. The CFPB's proposed debt collection rules make some strides in overcoming this hurdle; it would have been positive for the industry to also have the opportunity to educate the Bureau on the nuances associated with debt collection via a seat on the CAB. The loan servicer representative is the closest equivalent, but loan servicers are not always subject to the same strict requirements that govern third-party debt collection. This is not the first time debt collectors were left out of the CAB. Other than the appointments of Joann Needleman of Clark Hill and Ohad Samet of TrueAccord, the debt collection industry has been noticeably absent from CAB membership. At the same time, debt collection is a major focus for the Bureau, which is expected to issue a final rule in 2020.