The CFPB recently announcement that its last two collection rules implementing the Fair Debt Collection Practices Act (FDCPA) will come into effect as scheduled on November 30. The CFPB had previously offers extending the 60-day final rule’s effective date to allow for additional comment and an implementation deadline for those affected by COVID-19 (a recent article by Sheppard Mullin discussing the impact of COVID on debt collection was recently covered here). Based on industry comments, however, the Bureau determined that an extension was not necessary, explaining that although “consumer commentators were generally in favor of extending the entry date. force, they did not focus on whether more time is needed to implement the rules ”.
The first rule, Posted in October 2020, involves debt collection communications and clarifies restrictions on harassment and abuse, false or misleading representations and unfair practices by debt collectors engaged in the collection of consumer debt. The second rule, Posted in December 2020, focuses on disclosures debt collectors must provide to consumers at the start of collection communications. In particular, debt collectors must take specific steps to disclose the existence of a debt to consumers before disclosing information about that debt to a credit reporting agency and cannot sue or threaten to sue consumers for prescribed debt.
Put into practice : By leaving the door open to reconsider the debt collection rules at a later date, the CFPB is likely signaling to debt collection companies, and the creditors who use them, that the agency will keep a watchful eye as hundreds of thousands of borrowers are leaving the mortgage patience this fall. Anyone who may be affected by CFPB’s debt collection rules should thoroughly review their processes to ensure they are in compliance with the final rule and move forward with implementation efforts.