CFPB confirms date of entry into force of November 30 for final debt collection rules – Finance and Banking

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United States: CFPB confirms date of entry into force of November 30 for final debt collection rules

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The CFPB recently announced that its two final debt collection rules implementing the Fair Debt Collection Practices Act (FDCPA) will go into effect as scheduled on November 30. The CFPB had previously proposed extending the effective date of the final rules by 60 days to allow for additional comments. and implementation time 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 while “consumer commentators generally support the extension of the effective date, they did not focus on whether more time is needed to implement the rules ”.

The first rule, published in October 2020, concerns debt collection communications and clarifies restrictions on harassment and abuse, false or misleading statements and unfair practices by debt collectors engaged in the collection of consumer debt. . The second rule, released in December 2020, focuses on the 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 borrowers leave 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.

Originally posted Aug 11, 2021

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