Collections industry preparing for financial reform

In a strange turn of events it seems likely now that even the collections industry will fall under the vast reach of power under the new Bureau of Consumer Financial Protection (BCFP), housed under the Federal Reserve.
Federal Reserve logo
Of course this would be yet another example of an industry that is facing new regulation in response to the economic crisis which they did nothing to create, while those responsible were left out of the new bill because it was “too difficult” to deal with at this time.

Those in the collections industry thus far are seemingly disheartened by the over-reaching regulations and quick push to get the bill approved before first understanding the impact on those industries. This is somewhat understandable seeing as collections agencies are already tightly regulated and follow strict laws and outlines defined by the Fair Credit Act, by the Federal Trade Commission. Many in the collections industry are wondering specifically in new regulations could be soon implemented without though or regard to eliminating jobs, as has been demonstrated thus far with the financial reform bill.

ACA International, the association of professional businesses and individuals involved in the credit and collection industry, will reportedly attempt to work closely with the new BCFP in order to hopefully reach a fair balance on any newly imposed regulations.

It seems that other than creating more work for lawyers, the new BCFP will certainly be eliminating thousands of jobs once new regulations are implemented to countless industries. It is very un-nerving to already see them aiming to regulate industries, such as collections, that don’t actually deal with finance at all. I for one hope this does not eliminate jobs in the long run for our friends in the collections industry, who are doing a simple, straightforward, and regulated task of collecting debt on behalf of the lender. What’s next, do we regulate the office supply stores that sell pens to banks and payday lenders?

Payday lenders and payday employees fear for their jobs

Financial reform bill has passed and now CFPB has been created to create more rules and regulations for the lending industry including the short term loan industry even though this industry had nothing to do with the 2008 recession.
CFPB and many of the politicians have vowed to put all sort of caps and limitations on the short term lending industry which includes the payday industry.
Many payday lenders believe that they are already over regulated by their own States. For example State of Arizona recently banned payday loans that made many payday lenders leave the State that resulted in thousands of good paying jobs being lost. And State of Illinois introduced tighter regulations on payday lender.
“The payday loan industry is already closely regulated ” said Gabe Rodriguez who is a known author in the payday loan community. He further points that that “States which have allowed regulated payday lending have very few complaints against our industry”.
CFPB will represent the federal government and add a new layer of regulations in additions to those added by the States which is making the payday lenders and their employees very nervous.

According to the “comment of the day” section at Payday Pundit an employee for a small payday loan company said:

Payday lenders feel that the financial reform bill is not addressing the root causes of what led the US economy to collapse in 2008. It was well documented that sub-prime mortgages, the major wall street banks irresponsible lending, and the greed of CEOs and CFOs of those banks and financial institutions was what led to the deep recession of 2008. In other words it was the wall street not the main street that was responsible for the 2008 financial collapse.