Two debt collection rules currently slated to take effect this Nov. 30 would instead have a delayed compliance deadline of Jan. 29, 2022, under a proposal issued Wednesday to give those affected more implementation time amid the ongoing challenges of the COVID-19 pandemic.
The Consumer Financial Protection Bureau (CFPB) issued the final rules last October and December under the Fair Debt Collection Practices Act (FDCPA). The October final rule focuses on the use of communications related to debt collection and clarifies prohibitions on harassment and abuse, false or misleading representations, and unfair practices by debt collectors when collecting consumer debt. The December rule clarifies disclosures debt collectors must provide to consumers at the beginning of collection communications; prohibits debt collectors from making threats to sue, or from suing, consumers on time-barred debt; and 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.
“Since the Debt Collection Final Rules were published, the global COVID-19 pandemic has continued to cause widespread societal disruption, with effects extending into 2021,” the bureau said in a notice for the Federal Register. “In light of that disruption, the Bureau believes that providing additional time for stakeholders to review and, if applicable, to implement the final rules may be warranted.”
The rules adopted last year permit debt collectors to choose to comply with the rules’ requirements and prohibitions ahead of their effective date. However, the CFPB notes that the FDCPA and other applicable law would continue to govern debt collectors’ conduct, with safe harbors and presumptions implemented only as of the rules’ effective date. Comments are sought on this aspect of Wednesday’s proposed delay.
“The Bureau requests comment on, for example, the costs and benefits of permitting debt collectors to obtain a safe harbor for using the Bureau’s model validation notice as of November 30, 2021, even if the Debt Collection Final Rules do not otherwise take effect until January 29, 2022,” it said.
Comments on the proposed delay will be due 30 days after their publication in the Register.