The Consumer Financial Protection Bureau (CFPB) has submitted to Congress its annual Fair Debt Collection Practices Act (FDCPA) report covering the CFPB’s debt collection regulation and related activities for 2021.
According to the CFPB report, consumer debt rose rapidly during 2021, from $14.33 trillion in the first quarter to a new record high of $15.58 trillion in the fourth quarter of 2021. Non-housing debt also rose to a record high of $4.33 trillion in the fourth quarter of 2021. This rapid growth in debt was primarily driven by a $90 billion increase in credit card debt and a $80 billion increase in auto loan debt from first to fourth quarter of 2021. While most national debt levels have reached record highs, credit card balances remained $71 billion lower than their all-time high at the end of 2019.
The CFPB does not include some newer consumer loan products, like income share agreements and buy now, pay later (BNPL) which some market observers estimate would add approximately $40 billion in total consumer debt.
According to CFPB-cited estimates, the third-party debt collection market is a $18.6 billion industry which affects over 70 million Americans with debt collections actions every year. Most consumers with debt collections on their credit files have medical debt, followed by telecommunications, retail, or banking and financial services debt.
While the FDCPA does not cover the collection of small-business debt, the CFPB report expressed some concern about “abuses pertaining to collections and servicing practices associated with financing for small business.”
According to the report’s section on consumer complaints, the CFPB received approximately 121,700 debt collection complaints in 2021. The most common complaint in 2021, as in all prior years since the CFPB began receiving consumer complaints, was about attempts to collect a debt consumers claimed were not owed. The second and third most-common complaint issues were written notifications about the debt, and taking or threatening a negative or legal action, respectively.
The CFPB sent around 60 percent of those consumer complaints to the named company for review and response. Of those approximately 73,600 complaints, 97 percent received a response from the relevant company, with 82 percent being closed with an explanation. Ten percent of those remaining were closed with non-monetary relief and 0.5 percent with monetary relief.