Since its enactment, the Fair Debt Collection Practices Act has generally not applied to credit unions. This is based primarily upon the notion that credit unions and for-profit debt collectors have different considerations when communicating with consumers. At least this has been the perspective of credit unions and the Credit Union National Association (CUNA), which is a national trade association for both state- and federally chartered credit unions.
However, recently the Consumer Financial Protection Bureau (CFPB) released a proposal for a Small Business Review Panel, in accordance with the Small Business Regulatory Enforcement Act of 1996 (SBREFA). Several provisions of this proposal relating to third-party debt collection apparently affect credit unions, including highly technical substantiation and oversight requirements, as well as duplicative requirements for mortgage servicers. Thus, it seems the long-standing inapplicability of the FDCPA to credit unions may be changing with this proposal, and even future federal regulation.
CUNA responded with a letter to the CFPB, thanking it for recognizing that first-party creditors should be treated differently in the initial debt collection SBREFA process. CUNA's letter also reminds the CFPB that since enactment of the FDCPA in 1978, no subsequent law, including the Dodd-Frank Act, has provided the authority to include credit unions under FDCPA rules.
“We hope this reflects the CFPB’s understanding that Congress purposefully exempted first-party creditors, including credit unions, from the FDCPA and therefore, it would be unlawful to extend any rulemaking pursuant to this statute over them,” wrote CUNA Chief Advocacy Officer Ryan Donovan.
Donovan further stated: “Credit unions take a more holistic collection approach when working with their member-owners. They are not just interested in short-term efforts of collecting a debt; instead, they try to find out the specific cause of their member’s financial challenge. Depending on the member’s scenario, credit unions will then modify their efforts to meet their member's needs.” The attorneys at Loan Lawyers can help consumers determine if their rights have been violated and whether or not a debt collector is complying with federal and state law. For a no-risk, no-cost consultation, contact one of our South Florida consumer defense attorneys today by calling (888) FIGHT-13 (344-4813).