The Consumer Financial Protection Bureau is setting its sights on increased supervision of previously unregulated firms such as payday lenders, debt collection firms, and consumer credit reporting agencies. A recent report by the CFPB found that many of those companies had insufficient compliance management systems in place to follow federal laws, including the Fair Debt Collections Practices Act and the Fair Credit Reporting Act, and that many of their debt collection practices were in conflict with existing regulations.

The CFPB also is designing new federal regulations in payday lending as these small-dollar, short-term loans have gained the attention of consumer advocates as well as federal regulators.

“There are going to be new rules that they're going to be developing that are going to be layered on top of what already exists,” said Alan S. Kaplinsky, the leader of Ballard Spahr's Consumer Financial Services Group.

The CFPB report identifies practices by many companies that had run afoul of regulations, but it does not identify the number of firms facing potential increased scrutiny.

“I found it striking that the criticisms of the payday industry were confined to debt collection activities and that, even there, it is really not possible to determine from the report the prevalence of the identified problems,” said Ballard Spahr partner Jeremy T. Rosenblum.

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Consumer Financial Services
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