The Consumer Financial Protection Bureau (CFPB) has proposed a massive overhaul of the multibillion dollar debt-collection industry, which would restrict collectors from calling numerous times a day, require them to have more documentation on what's owed and give people more ability to dispute their bills, the Associated Press reported today. It would be the biggest overhaul of the debt-collection industry since Congress passed the Fair Debt Collections Practices Act. Regulators estimate roughly 70 million Americans are contacted by debt collectors each year. Like payday loans and so-called binding arbitration agreements — two parts of the U.S. financial system that the CFPB has proposed regulating more tightly — the new proposals are likely to be resisted strongly by the industry and its allies in Washington. Under the proposed rules, debt collectors would first have to more substantially prove a debt is valid before starting collection. The agency will hold a hearing today in Sacramento, Calif., to discuss the proposed rules. Once formal rules are written, likely later this year, the public will have 90 days to comment before they go into effect.
