Congress May Ask New Regulator to Monitor Collectors

A congressional report detailing abuses by debt collectors demonstrates the need for a new consumer financial protection agency, said Sen. Carl Levin, D-Mich., Wednesday.

The Government Accountability Office report comes as the House is working out details of the agency, proposed as part of the Obama administration's regulatory overhaul. The House Financial Services Committee is expected to vote on the bill Thursday, while the Senate hasn't yet taken up the proposal.

The GAO, the investigative arm of Congress, found lax enforcement against abusive practices by debt collectors regarding credit cards and recommended that the 1977 Fair Debt Collection Practices Act be updated to take into account new technologies and debt collection practices.

Levin said Congress should go beyond updating debt collection legislation to create the new consumer agency.

"A Consumer Financial Protection Agency would have the authority to modernize consumer protections against unfair debt collection practices, monitor compliance, and take enforcement action to stop abusive debt collectors," he said in a statement.