Banks aren't going to be able to hide behind the Fair Debt Collection Practices Act anymore, as the regulatory crackdown shifts to a larger scope, according to an analysis today in Credit&CollectionsRisk.com. In the latest development, New York state approved tougher new rules for debt collectors, including an extended period for consumers to dispute cases. The scope seems almost certain to widen to include in-house collection departments. If that happens, it will change a legal landscape that has been in place since 1977, when the fair practices act took effect. Only outside debt-collection firms, known in the industry parlance as third-party collectors, are subject to that law. Banks oppose the possibility that original creditors will become subject to the same rules, and the industry has tried to lobby to prevent the inclusion of so-called first-party collectors.
