The Consumer Financial Protection Bureau finalized changes to its regulations regarding the disclosure of records and information. These changes address the confidential treatment of information obtained from persons in connection with the exercise of its authorities under federal consumer financial law.
The final rule amends definitions and makes other clarifying changes to subparts A and D of section 1070 of title 12 of the Code of Federal Regulations. With these changes, “the bureau has sought to provide the maximum protection for confidential information, while ensuring its ability to share or disclose information to the extent necessary to achieve its mission.”
The bureau declined to adopt a more expansive definition of the term “agency” in the final rule, which the American Bankers Association opposed in a 2016 joint trade association comment letter. The CFPB also omitted from the final rule previously proposed changes that would have threatened the confidentiality of supervisory information banks provide to CFPB examiners by allowing the bureau to disclose confidential supervisory information to any agency it deems relevant, including state attorneys general, foreign regulators and state bar associations.
The CFPB also published a portion of its long-awaited Fair Debt Collection Practices Act rulemaking to modernize and clarify rules around third-party debt collection. The rule will take effect one year after publication in the Federal Register.
The FDCPA does not generally apply to creditors collecting their own debt, and therefore does not generally apply to banks. When the initial proposal was issued in May 2019, however, it included proposed limitations on consumer contact subject to the bureau’s Dodd-Frank authority to restrict unfair, deceptive, or abusive acts or practices.
The bureau refrained from implementing these consumer contact restrictions that would have applied to banks and other first-party creditors in response to advocacy from banking industry leaders. The restrictions would have introduced legal uncertainty to banks’ ability to contact consumers in the critical stages of early delinquency.
The final rule also covers the use of text messaging and email to contact consumers regarding debts and provides for consumer opt-out of these contact methods. It also includes provisions on disputes and record retention requirements for FDCPA debt collectors. The CFPB said it will release another iteration of the rulemaking in December, focussing on consumer disclosures.