Reuters is reporting recent comments by Treasury Secretary Geithner that have sent a clear signal that the new Consumer Financial Protection Bureau (CFPB) will not be active in enforcement actions until July, 2011.
“It is fair to say that until that authority is transferred, which will not happen before July of 2011, and before there is a confirmed director in place this agency by statute has very limited authority to actually write new rules,” Geithner said. – Source
The CFPB should be a real concern to all debt relief companies. With widespread authority and enforcement ability the CFPB is likely to adopt very strict and defined rules to protect consumers in all transactions involving credit and debt. This would include debt relief industry practices that are deemed to be deceptive and abusive.
The identification of what is deceptive and abusive is a very broad brush and not limited to those definitions by the FTC who has become saddled over a number of years of bureaucratic constraint.
Instead, under the guidance of Elizabeth Warren, now a special adviser to the president to help create a strong bureau, the debt relief industry should expect tough but fair and balanced rules to come.
This is the perfect opportunity for the debt relief industry and all affiliated trade associations to work to make sure internal rules, policies and enforcements are in place to regulate members. Those rules need to make sure they hinge on fairly and transparently informing consumers about debt relief options and signposting consumers to free services when available as an alternative.
Now is NOT the time for hyperbole in selling debt relief services. Now is the time to get the operations in compliance. This is the breather before the tough new regulations to come, and they will.
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