More than five years after it issued its Advanced Notice of Proposed Rulemaking, the Consumer Financial Protection Bureau (CFPB) appears poised to issue its proposed debt collection rules. The first hint that this was imminent came in the fall of 2018 when the CFPB announced it anticipated issuing a Notice of Public Rule Making in the spring of 2019. Since then, there have been several other public statements concerning the highly anticipated rule making.
In March, the CFPB issued its annual report to Congress regarding its administration of the FDCPA and its other consumer protection-related debt collection responsibilities. In that report, the Bureau reiterated its intention to issue a Notice of proposed Rulemaking which would address such issues as communication practices and consumer disclosures.
More recently, Kathy Kraninger, Director of the CFPB, offered further information on the proposed rulemaking noting the tension between the FDCPA, a 1977 statute, and the advances in technology that have occurred in the forty years since its inception. In her prepared remarks to the Bipartisan Policy Center last week, Kraninger provided a preview of the proposed rule, noting that it will:
- Provide a clear bright-line limits on call frequency;
- Provide clarity on communications through email and text messages; and
- Require debt collectors to “provide consumers with more and better information at the outset of collection to help them identify the debts and understand their options, including their rights in disputing debts or paying them.”
WHAT CAN WE EXPECT? Juxtaposing Kraninger’s comments against the Outline of Proposals for Third Party Rules which was circulated in 2016 just prior to the third party SBREFA, it is likely the proposed rule will address:
- Information Integrity. The 2016 proposal required debt collectors have certain information in hand before collection, such as statements of account, account histories, credit applications, chains of custody and disputes. Kraninger’s comments suggest the proposed rule may closely track this proposal.
- Dispute Resolution. The 2016 proposal included model disclosures and a “tear off” dispute notice. This proposal met with significant push back from stakeholders. Based upon Kraninger’s recent comments, it is likely the proposed rule will include additional or model disclosures, but it is unclear whether the “tear off” dispute notice will be included.
- Communications. Based upon Kraninger’s comments as to modernization, the rules are likely to provide some welcome clarification as to messaging, whether by email, text or voice mail.
Caren Enloe is a partner with Smith Debnam in Raleigh, NC and leads the firm’s consumer financial services litigation and compliance group. Enloe serves as a member of the Editorial Board for the Compliance Professionals Forum and as a vice chair for the American Bar Association’s Debt Collection and Bankruptcy Subcommittee. She is an active member of ACA International, National Creditors Bar Association, the American Bar Association’s Consumer Financial Services Committee, the North Carolina Bankers Association and the North Carolina Creditor’s Bar Association. Enloe blogs and speaks regularly on current trends and issues involving consumer financial services.