New Report Examines the Deconstruction of CFPB’s Debt Collection Rulemaking From the Cordray to Kraninger Era

Mulvaney and Kraninger Reversed Course on Cordray’s Drive for Stronger Consumer Protections As the Debt Industry Spent Millions Lobbying

Read the Report, ‘Debt Rule Deconstruction’

WASHINGTON, D.C. – On the eve of the public comment deadline for the Trump CFPB’s debt collection proposal, consumer watchdog group Allied Progress released a new report, ‘Debt Rule Deconstruction’, on how the rule-making process deteriorated in favor of the debt industry at the expense of consumers after former CFPB Director Richard Cordray’s departure. The report examines the timeline between Cordray’s push for expanding consumer protections including hard limits on industry communications, to the industry’s $2 million lobbying effort after Cordray’s departure, to the major concession made to the debt industry within a month of former acting Director Mulvaney’s arrival, to the ultimate proposal released by Kathy Kraninger that gave debt collectors exactly what they wanted: the ability to harass consumers with unlimited texts and emails without their prior approval.

“This rulemaking process has been another shining example of how amenable this administration is to industry demands, even when it costs consumers,”said Allied Progress spokesman Jeremy Funk. “Under Cordray, the focus was preventing consumer harassment from debt collectors. Under Mulvaney, the debt collection industry saw opportunity and spent millions lobbying — and it clearly worked. Mulvaney’s CFPB practically put a neon sign on the building that said, ‘Ask And You Shall Receive,’ while he joined the industry’s speakers circuit. Now Director Kraninger intends to finish the job by crossing off virtually every item on the industry’s wish list. In her wastebasket lies the stronger consumer protections that could still be if she’s willing to get her priorities straight.”

BACKGROUND: The CFPB’s proposal isn’t just wildly unpopular, it’s likely illegal after a Federal appeals court recently ruled debt collection agencies were prohibited from asking consumers to click on hyperlinks to obtain legally-required notices about outstanding debt. The proposal seeks to permit exactly that. The Trump spam plan rewards the debt collection industry despite racking up among the highest number of consumer abuse complaints and millions of dollars in fines and legal penalties for misconduct. Allied Progress recently released an analysisshowing the debt collection industry trade groups have spent over $2.1 million on federal lobbying since Trump took office, and debt collectors have donated over $343,000 to Republican political campaigns since 2016. That followed Allied Progress’ reportspotlighting the history of consumer abuse from some of the debt collection industry’s biggest players.

Earlier this week, Allied Progress launched which features a tool to email CFPB Director Kathy Kraninger a 10-hour long audio clip of smartphone alert dings to help the CFPB better appreciate how annoying it would be for millions of families to suddenly see their inboxes overwhelmed with messages from random debt companies (and possible scammers) without prior permission. Allied Progress is also running a new digital ad, “Harassed Enough,” this week on social media platforms, including Facebook and YouTube, that encourages consumers to make their voices countand tell their stories why debt collectors should not have more options to invade their privacy.


  • Under Former CFPB Director Richard Cordray, The CFPB’s Debt Collection Rule Was Set To Have Strong Consumer Protections Against Industry Harassment, Including Hard Limits On Communications, Inclusion Of Consumer Disclosure And Consent Rights, And Protections Against Old “Zombie Debt.”
  • Following Former Director Cordray’s Departure, The Major Debt Collection Industry Trade Groups Spent Over $2 Million On Lobbying.
  • Cordray’s Successor, Acting Director Mick Mulvaney Had Meetings Behind Closed Doors At The CFPB With The Debt Collection Industry—Going As Far As Withdrawing The Bureau’s Debt Collection Data Efforts Just Days After The Industry Asked Him To Do So.
  • In March 2018, Mulvaney’s CFPB Sought Input From “Interested Parties” On The Bureau’s “Inherited Regulations And Inherited Rulemaking Authorities.”
  • Amidst Numerous Industry Event Appearances, Meetings About Debt Collection, And Lobbying By Debt Collectors, Mulvaney Announced That The CFPB Would Be “Prioritizing” A Debt Collection Rule But It Would No Longer “Aggressively ‘Push The Envelope’”—A Statement Which Industry Was “Pleased To Hear.” 
  • Just Months After Mulvaney Said He Would Prioritize Debt Collection, He Brought On An Industry Insider, Tom Pahl, Who Had Legally Represented Collectors And Vocally Opposed Former Director Cordray’s Efforts
  • Following Mulvaney’s Departure From The CFPB, Director Kathy Kraninger Continued His Debt Collection Efforts, Claiming She Would “Provide Clarity” And “Modernize The Legal Regime For Debt Collection.”
  • Kraninger’s Proposed Debt Collection Rule Ultimately Eroded Key Protections Found In Cordray’s Original Proposal—Including Weakening Restrictions On Collectors’ Communications, Legal Responsibilities, And Ability To Pursue Old “Zombie” Debts.
  • Kraninger’s Debt Collection Rule Would Only Include Already-Existing Requirements For Collectors To Actually Verify And Substantiate Consumers’ Debts—While Cordray’s Rule Would Have Added Protections For Consumers.
  • Kraninger’s Debt Collection Rule Would Allow Debt Collectors To Email And Text Consumers An “Unlimited” Number Of Times And Call Consumers Once A Day Per Debt They Hold—While Cordray’s Rule Would Have Limited Collector Communications To A Total Of Just Six Per Week.
  • Kraninger’s Debt Collection Rule Would Allow Collectors To Text, Email, And Directly Message Consumers “Without Consent”—While Cordray’s Rule Would Have Required Collectors To Obtain Consent “Directly” From Consumers.
  • Kraninger’s Debt Collection Rule Gives Debt Collectors More Freedom To Pursue Consumers Over Old, “Zombie Debt”—While Cordray’s Rule Would Have Established More Legal Defenses For Consumers.
  • Following The Release Of Kraninger’s Proposed Debt Collection Rule, Consumer Advocates Argued She Gave Industry “Almost Everything” It Demanded—Meanwhile, Debt Collectors Said They Were “Happy” And “Encouraged” By The Rule, And That It “Reflects” Industry Needs. 





Allied Progress is now Accountable.US. This website will no longer be updated and has been permanently archived. For the latest accountability and transparency updates, please visit us at Accountable.US.