The Consumer Financial Protection Bureau (CFPB) has recently announced that it will oversee the largest debt collection agencies starting in January 2013. Consumer advocates were quite pleased with this announcement.
The CFPB is a fairly new government agency created by the Obama Administration that has been taking some steps to address numerous problems impacting consumers, particularly student loans. CFPB recently created a complaint system for private student loan borrowers, and also issued a first-of-its-kind comprehensive report on systematic problems with student loan servicing.
Now the CFPB seems to be taking on debt collectors, at least at a basic level. If you remember, student loan debt collectors have enormous collection powers. The U.S. Department of Education paid $1.4 billion to private, third-party debt collectors last year to collect on federal student loans. It is truly a booming business. Unfortunately, debt collectors often violate the law by harassing or misleading debtors, including student loan borrowers. Hopefully, the CFPB’s new oversight of these agencies will start curbing some of the abuses we’ve been seeing.
To read more about the CFPB’s new oversight, click here.