Under Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Consumer Financial Protection Bureau (CFPB) was established as an independent agency within the Federal Reserve System. The CFPB is charged with enforcing federal consumer financial laws and supervising various financial institutions, as well as debt collectors and consumer reporting agencies deemed to be "larger market participants" by the bureau.1 Additionally, on Jan. 2, 2013, the CFPB’s supervisory power was expanded to cover third-party debt collection agencies, debt buyers, and collection law firms with revenues over $10 million per year.2 This expansion is estimated to impact approximately 60 percent of the industry’s annual receipts in the consumer debt collection market.3
The CFPB has drawn a great deal of attention and criticism in the lending world and the consumer collections industry since the bureau’s inception, largely due to the broad scope of the CFPB’s examination process and the financial and time burdens placed on regulated entities.4 The CFPB describes its supervisory and examination process as a "comprehensive, ongoing process of pre-examination scoping and review of information, data analysis, on-site examinations, and regular communication with supervised entities and prudential regulators, as well as follow-up monitoring."5 This includes among other things, evaluating whether supervised entities provide required disclosures to consumers and provide accurate information to consumers in the process of collecting a consumer debt, as well as evaluating the entity’s compliance management systems, reviewing practices to ensure they comply with federal consumer financial law, and identifying risks to consumers throughout the debt collection process.6 The CFPB’s supervisory division’s stated goal is to assess potential risks to consumers and to determine whether financial institutions and debt collectors alike are complying with requirements of federal consumer financial law, through examination and monitoring.7
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