Earlier this month, the Consumer Financial Protection Bureau (CFPB) very quietly overhauled its debt collection review process. While much of the exam manual has remained the same, the updated version incorporates Reg F.
The following is a non-exhaustive list of new topics covered in the review process:
- Communicate by email/text message (Page 11- Module 2, question 2)
- Communicate via social networks (Page 11- Module 2, question 3)
- The limited content message (Page 12- Module 2, question 9)
- Disadvantage as defined in Reg F (Page 13- Module 2, question 12a)
- Frequency of calls (Page 15 – Module 2, question 15)
- Representations to consumers regarding credit ratings (Page 17- Module 2, question 21)
- Parking of debts (Page 23- Module 3, question 10)
- The validation notice model (Page 27- Module 4- question 1-8)
- Opt-out (page 31, module 4, question 12, 13)
Please Note – Affiliate and Third Party Section
The Affiliates and Third Party Relationships section of the Exam Handbook can be found on page 6. This section does not limit the type of affiliates or third party agents debt collectors may use. Instead, the updated review procedure remains largely the same as the previous procedure. During a review, the CFPB will consider whether the debt collector:
- Reviews vendor policies and procedures
- Provides clear expectations that the service provider complies with applicable law
- Establishes internal controls
- Takes quick action to resolve issues
insideARM point of view:
Reg F went into effect November 30, 2021. The release of the updated review procedure is a good indication from the CFPB that they expect debt collectors to have completed all of their Reg F implementations. We have tried to stress the importance of a risk and gap analysis; this version clearly indicates that the time has come. ARM entities should review the review process to ensure that they have covered everything the CFPB expects them to have covered.
It should also be noted that despite the continued hunstein saga, the CFPB did not limit its questions regarding service providers to those specifically mentioned in the FDCPA. Instead, the review process seems to solidify what everyone pre-hunstein already knew that using vendors is not a violation of the FDCPA.
Want to find the flaws in your CMS before regulators (or consumer advocates) do? Find out how to start an in-depth risk and gap assessment AND get the details on the CFPB review process revisions this Wednesday, March 16 at 2 p.m. with, A Complete Guide to Risk and Gap Assessments, a free webinar from Research Assistant and insideARM.