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On October 29, the CFPB published further frequently asked questions on Regulation F, its final debt collection rule, as well as a guidance document. The new FAQ addresses the validation notice requirements (including for residential mortgage debt) and the guidance document discusses how to disclose validation information on the validation notice template detail table. . Regulation F comes into force on November 30, 2021. (Last month, the CFPB has published FAQs on the provisions for limited content messages and the frequency of rule calls.)
Debt Collection Rules FAQ Update
Debt collectors may use Standard Form B-1 of Annex B to Regulation F to comply with the content and form requirements of validation information in § 1006.34 (c) and (d) (1). CFPB new FAQs on validation information Answer the following questions :
- What information is required?
- Is there a model validation notice?
- Is the use of the model validation notice required?
- Can the model validation notice be changed?
CFPB model validation notice (in English and Spanish) contains five categories of validation information: (i) Debt Collection Communication Disclosures; (ii) information on debt; (iii) information relating to the enumeration; (iv) information on consumer protection; and (v) consumer response information.
CFPB expects a validation notice to contain all of this required information – this is a communication from a debt collector; debt information; amount due and detail; where consumers can learn about protections; and a way to respond — in the format required. Debt collectors who use the Bureau’s validation notice template have a “safe harbor†to comply with content and format requirements.
The CFPB explicitly states that the final rule “does not require a debt collector to use the validation notice template” and that using the notice template “is a way to comply in order to comply. [with the content and format requirements in Regulation F.]It further states that debt collectors who choose “not to use the pattern validation notice” or who make “changes that are not specified in the rule,” resulting in a notice that is not substantially Similar to the template validation notice, don’t violate the final rule. However, they will not be able to avail themselves of the protection of the safe harbor in the context of a trial or a surveillance context.
The Bureau also published new FAQ on validation information for residential mortgage debt which answer the following questions:
- Is there a special rule for residential mortgage debt when disclosing detailed information?
- What information can be omitted?
- Is there safe haven protection for residential mortgage debt?
- What is the “most recent periodic statement†for the purposes of the special mortgage rule?
- What detail date is used for the mortgage special rule?
A debt detail is usually a mandatory part of a validation notice. However, under the special rule of the final rule for certain residential mortgage debts in § 1006.34 (c) (5) (Special rule), debt collectors may instead provide the most recent periodic statement required by the regulation. Z to replace ventilation information. . The CFPB indicates that the statement may be the one provided by the collection agent (as long as this periodic statement was required by Regulation Z at the time it was provided). The declaration must be included in the same communication as the validation notice. In the space on the validation notice where a debt collector would have put the omitted detail information, the debt collector could provide the statement, “See attached periodic statement for a debt detail.”
The breakdown information that collectors using the special rule are allowed to omit from the validation notice consists of (i) the date of the breakdown; (ii) amount of debt on the settlement date; and (iii) details of the current amount of debt. However, the Bureau explicitly (and emphatically) points out that “although the detail table on the model validation notice includes validation information that can be omitted, it also includes the current amount of debt, which is a validation information which Maybe not be omitted from the validation notice under the special rule. A debt collector who uses the special rule must always disclose the current amount of debt on the validation notice. The CFPB also points out that although a debt collector using the special rule does not need to disclose a detail date on the validation notice, they still need to determine the detail date to disclose other dependent validation information. of the date.
While confirming that the Safe Harbor remains available for a debt collector who uses the validation notice template but also complies with the special rule, the CFPB said the Safe Harbor is limited to compliance with validation information. and format requirements for the information provided in the model validation notice only. The debt collector does not have a safe haven for content and format requirements for content included in the periodic statement.
Debt collection rule: disclosure of the breakdown table of the model validation notice
In addition to its new FAQ, the CFPB has also published a guidance document, “Debt collection rule: Disclosure of the detail table of the model validation notice. “The Bureau indicates that a debt collector using the validation notice template can, but not be required to, complete the detail table by following the following four steps:
- Select the inventory date.
- Determine the amount of debt on the detail date.
- Determine the itemized amounts since the itemization date.
- Determine the amount of debt.
In the guidance document, the CFPB provides a detailed discussion of each of these four steps. It also provides sample detail tables illustrating how a debt collector might complete the detail table when collecting various types of debt. The types of debt shown in the examples are credit card debt, residential mortgage debt, medical debt, and multiple medical debts owed by the same consumer.
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