Every day Instabill copywriters receive more than 25 newsletters, blogs and journals to stay updated on payments industry issues and what is trending. Other than the recent EMV liability shift, one other issue has stood above the rest: the war between lending and collections merchants and the Consumer Finance Protection Bureau (CFPB).
It is safe to say the latter is winning. And from what we’ve read, that’s not going to change. Ever. Collections and loan merchants are left to conform to Consumer Finance Protection Bureau rules, for better or worse, or face being shut down.
The State of Collections
Among the many online periodicals we receive is Collections and Credit Risk, a terrific daily mailing covering the week’s biggest news in the industries of collections, loans, banking and credit. Lately, the news for collections merchants isn’t good. Here are some recent headlines:
- Feds Order $44.1 Million in Relief for Illegal Debt Collection Tactics
- Collection Agency Target of Seizure Complain for Alleged Fraud
- Concerns Grow Over Student Loan Repayment Scams
What’s Behind the Headlines?
A degree of unease has spread throughout the collections and loans industries, and it points toward the Consumer Finance Protection Bureau. Merchants will condemn it while consumers mostly applaud it. Collections businesses are under scrutiny because of tactics that often border on harassment while lenders are being questioned about high interest rates.
Merchants are fighting back, but to how much success, if any, remains to be seen. Recently, several lenders filed a lawsuit against the Federal Deposit insurance Corporation, claiming it has ‘stigmatized’ the payday lending industry.
What Can Collections and Loan Merchants Do?
Because of the Consumer Finance Protection Bureau, finding payment processing solutions for collections and lending merchants is becoming more difficult. Despite the climate, there are still options out there.
“It has certainly gotten harder,” said Wendy Jacques, Sales Manager at Instabill. “But having sound financials and good processing history goes a long way for collections merchants.”
Partner With Instabill
Has your collections business been impacted by the Consumer Finance Protection Bureau? We would love to know more – please leave a comment below. If you feel your business qualifies for a collections merchant account, by all means contact us! We are reachable via the live chat option below or speak with a live merchant account manager at 1-800-318-2713.