Publication Frames CFPB Debt Collection Regulation as a Small Business Matter

Patrick Lunsford

We’ve read (and written, to be honest) countless articles about debt collection and its impact on the broader economy. The vast majority of articles published about the ARM industry begin with the anecdotal recounting of one consumer’s experience with collectors. From there, the focus is typically on consumer impact.

And there’s good reason for that. There are more than 200 million able consumers in the United States. So framing a story to the largest group possible would dictate that consumer impact should always be the focus.

That is why I was so surprised (and pleased) to see a story about the Consumer Financial Protection Bureau (CFPB) framed in a different way.

Columbus Business First – the Business Journals title for Columbus, Ohio — in its April 27 edition ran a piece plainly titled, “Consumer Financial Protection Bureau focusing on debt collectors.” (NOTE: Only paid subscribers may read the entire article.) The article covers ground that most, including insideARM.com, has covered. But the beginning of the story is noteworthy for ARM professionals.

Staff reporter Adrian Burns opens his piece:

Steve Ulrey runs seven Flyers Pizza & Subs shops in Central Ohio. He gets about one bad check a day for an average of $25.

To Ulrey, passing bad checks is akin to theft and a blow to his business.

“He has just robbed me,” Ulrey said of a customer who pays with a check that bounces. “And our margin line is not that great that we can absorb those kinds of losses.”

To fight back, Ulrey employs a debt collector that tracks down the scofflaws.

Burns proceeds to write about the new regulation structure that the industry Ulrey relies on will see.

Rather than focus on the impact debt collection has on consumers (as mainstream media does), or the impact new regulation will have on debt collectors (as we do so often), Columbus Business First decided to focus on the small business clients of debt collection agencies; those businesses that rely on getting something back from the ARM process to make their margins.

I think that many assume collection agency clients are solely comprised of massive, multi-national banking operations. And for some that might be the case. But countless collection agencies have client rosters filled with small, local businesses.

Bear this in mind when discussing impact with local, state, and federal lawmakers and regulators.