The Consumer Financial Protection Bureau confirmed that two proposed rules issued under the Fair Debt Collection Practices Act will take effect as planned, on November 30.
The two rules concerned debt collection communications, including use of text messages by debt collectors, and the disclosures debt collectors must send to consumers.
The CFPB issued a proposal in April 2021 that, if finalized, would have extended the effective dates to January 29, 2022. The CFPB has now determined that such an extension is unnecessary.
Initially, the bureau posited the delayed effective date to allow stakeholders affected by the COVID-19 pandemic additional time to review and implement the rules. The public comments generally did not support the 60-day extension, the agency said. Although consumer advocate commenters generally supported extending the effective date, they did not focus on whether additional time is needed to implement the rules. The alternative basis for an extension that many commenters urged, a reconsideration of the rules, was beyond the scope of the NPRM and could raise concerns under the Administrative Procedure Act.
The first rule, issued in October 2020, focuses on debt collection communications and clarifies the FDCPA’s prohibitions on harassment and abuse, false or misleading representations, and unfair practices by debt collectors when collecting consumer debt.
The second rule, issued in December 2020, clarifies disclosures debt collectors must provide to consumers at the beginning of collection communications. The second rule also prohibits debt collectors from suing or threatening to sue consumers on time-barred debt. Additionally, the second rule 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.
Given the likelihood of debt collectors receiving a “historically high number of loss mitigation inquiries” as borrowers exit forbearance in the fall, the bureau said it will consider additional guidance for debt collectors, including those that service mortgage loans, as necessary.