CFPB Decides Not To Delay Debt Collection Rules

On July 30, 2021, the Consumer Financial Protection Bureau (CFPB) announced that two final rules issued under the Fair Debt Collection Practices Act (FDCPA) will take effect as originally planned, on November 30, 2021, thereby scrapping a proposed delay that would have extended the effective dates to January 29, 2022.

As Lender Law previously reported, the first of the CFPB’s new debt collection rules, issued in October 2020, was designed “to restate and clarify prohibitions on harassment and abuse, false or misleading representations, and unfair practices by debt collectors when collecting consumer debt.”  The rule clarified that a debt collector is presumed to violate the FDCPA’s prohibition on repeated or continuous telephone calls if the debt collector places a telephone call to a person more than seven times within a seven-day period or within seven days after engaging in a telephone conversation with the person.  Additionally, to address modern electronic communication methods such as email and text messaging, the new rule clarifies how consumers may set limits on debt collection communications to reflect their communication method preferences.  Debt collectors who communicate with consumers electronically must offer the consumer a reasonable and simple method to opt out of such communications at a specific email address or telephone number.  The rule also provides that consumers may, if the debt collector communicates through a medium of electronic communications, use that medium of electronic communications to place a cease communication request or notify the debt collector that they refuse to pay the debt.

The second debt collection rule, issued in December 2020, clarified the disclosures debt collectors must provide to consumers at the start of the collection process.  It also prohibits debt collectors from suing, or making threats to sue, consumers on time-barred debt, and requires debt collectors to take specific steps to disclose the existence of a debt to consumers before reporting information about the debt to a consumer reporting agency.

The CFPB first proposed delaying the effective date of the new rules in April 2020 “to give affected parties more time to comply due to the ongoing COVID-19 pandemic.”  However the CFPB ultimately decided against the delay, because “[t]he public comments [received in response to the notice of the proposed delay] generally did not support an extension.”  At the outset, the CFPB noted that “[m]ost industry commenters stated that they would be prepared to comply with the final rules by November 30, 2021.”  Additionally, “[a]lthough consumer advocate commenters generally supported extending the effective date, they did not focus on whether additional time is needed to implement the rules.”  Finally, the CFPB noted that while “many commenters urged” that the implementation of the rules should be extended because the rules themselves should be reconsidered, that basis “was beyond the scope of the [Notice of Proposed Rulemaking] and could raise concerns under the Administrative Procedure Act.”