Report: 1/4 of consumers have debt in collection with third-party

A new report from the CFPB on third-party debt collection revealed that 28 percent of consumers with a credit report in 2018 had at least one debt in collection with a third-party. The CFPB is currently considering a rulemaking related to third-party debt collection.

NAFCU has urged the bureau to exempt credit unions from any rules related to first- and third-party debt collection, as credit unions are not the bad actors in this space. Member credit unions are encouraged to submit feedback on the bureau’s proposed rule through NAFCU’s Regulatory Alert until Aug. 5.

The report spans 2004 to 2018 and provides an overview of third-party debt collection tradelines. A tradeline is information about a consumer account that is sent to the credit reporting agencies; it contains data on account balance, payment history and account status.

Among the report’s key findings:

 

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