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Biden’s CFPB Focuses On Debt Collection As Early Priority

  • Written by Steel Rose

Biden has nominated Rohit Chopra to replace Kathy Kraninger, who stepped down last month. In the meantime, the agency is being helmed by Acting Director Dave Uejio.

That might mean, in general, more fines ahead for some of the marquee names that are bringing financial services to mobile conduits, ensuring that commerce is always on everywhere.

News came this week that PayPal’s Venmo is under investigation by the CFPB. The investigation, PYMNTS reported, is focused on the company’s debt collection processes and allegations that Venmo conducted unauthorized fund transfers. PayPal said it is cooperating with the CFPB’s investigation.

To get a sense of Venmo’s scale and reach, in its latest quarterly earnings report, PayPal said that in the fourth quarter, the company processed $47 billion in total payments volume, up 60 percent year over year, and active accounts grew 32 percent in the same period to 70 million.

Reading the tea leaves as to what a regulatory body will do, especially with new management, so to speak, is as much art as science. Better to be generally right than precisely wrong, as the old investing maxim goes.

Complaints Trending Higher

In the most recent semi-annual report, the CFPB said that during the period from Oct. 1, 2019, through Sept. 30, 2020, the bureau received approximately 467,200 consumer complaints. This is an approximately 26 percent increase from the prior period. In the same time frame, the CFPB collected a bit more than $34 million in civil penalties.

In the past, as reported by The Wall Street Journal, Venmo has told users it would send debt into collections and gave itself the authority to seize money from customers’ other PayPal accounts.

Debt collection — as a practice — is likely to be in the spotlight as the new administration takes over more fully. To read more click here