The Consumer Financial Protection Bureau (CFPB) is inviting comment on whether its "larger participant" rule for the consumer debt collection market, in place since 2012, should be updated to reflect changes in the market and supervision priorities. Comments are due September 22, 2025.
Current Rule Snapshot
Market |
Current Threshold |
Rule Adoption Year |
Comment Deadline |
|
Consumer Debt Collection |
$10 million annual receipts |
2012 |
September 22, 2025 |
There has been no proposed change to the definition of "debt collection activities" at this stage. Under the current rule, a nonbank is a "larger participant" if it has more than $10 million in annual receipts from debt collection activities, which are defined in 12 C.F.R. § 1090.105(b) as collecting, or attempting to collect, directly or indirectly, debts owed or due to another or debts that the entity purchased and now owns, if the debts were collected in the ordinary course of business. The definition excludes the collection of debts arising out of business credit transactions and certain other categories, such as medical debt, which are not counted toward the threshold.
According to the advance notice of proposed rulemaking, since the CFPB set its $10 million threshold for supervising large debt collectors in 2012, the industry has shrunk from about 4,500 firms to as few as 2,500, with the share above that threshold nearly doubling to 7–10 percent. Many fall just over the line: roughly half earn between $10 million and $25 million, small enough to meet Small Business Administration's (SBA) definition of a small business, according to the Bureau. Raising the bar to $25 million would leave about 100 to 125 companies controlling up to 70 percent of industry revenue; at $50 million, only 60 to 90 would remain, and at $100 million, as few as 11.
Questions for Comment
The advance notice of proposed rulemaking asks whether the CFPB's $10 million annual receipts threshold for defining larger participants in the consumer debt collection market remains appropriate.
The agency says smaller businesses that meet the current standard may face disproportionate compliance burdens and that the rule may sweep in too many entities, diverting limited supervisory resources from higher-risk firms.
The Bureau has not reevaluated the test since adopting it more than 12 years ago and is now seeking comment on whether to raise the threshold, adopt alternative criteria, or align with SBA size standards.
It is also asking for data on the potential consumer and industry impacts of a change, including compliance costs for firms near the threshold, effects on rural consumers and servicemembers, and whether raising the threshold could reduce recordkeeping requirements.
Why It Matters
Adjusting the threshold could either expand or contract the CFPB's supervisory reach.
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Stakeholders should review their receipts against the current threshold, consider the impact of potential changes, and file comments by September 22, 2025.
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