After finding that an effective date extension of two final rules under fair debt collection laws is unnecessary, the federal consumer financial protection agency Friday said the rules would take effect, as originally planned, on Nov. 30.
In a release, the Consumer Financial Protection Bureau (CFPB) said an extension to Jan. 29 of two rules under the Fair Debt Collection Practices Act (FDCPA), as proposed in April, was not necessarily supported by commenters. The agency said it had proposed the extension to allow stakeholders affected by the COVID-19 pandemic additional time to review and implement the rules. Most commenters said that they were ready to comply by the Nov. 30 date and did not, CFPB said, focus on whether more time was needed to put the rules into effect.
(However, the agency noted, some commenters recommended, in the alternative to an extension, that the rules be reconsidered. The bureau rejected that view, noting that approach “was beyond the scope of the NPRM and could raise concerns under the Administrative Procedure Act.” There is some wiggle room, apparently: the agency said “nothing in this decision precludes the CFPB from reconsidering the debt collection rules at a later date.”)
The two rules now set to take effect Nov. 30 are:
- One adopted in October of last year that 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.
- One adopted in December 2020 that aims to clarify disclosures debt collectors must provide to consumers at the beginning of collection communications. It also prohibits, the agency pointed out, debt collectors from suing or threatening to sue consumers on time-barred debt. The second rule also 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, CFPB stated.
“The CFPB will consider additional guidance for debt collectors, including those that service mortgage loans, as necessary,” the agency noted, adding that it “recognizes that mortgage servicers are expected to receive a potentially historically high number of loss mitigation inquiries in the fall as large numbers of borrowers exit forbearance and that, as a result, mortgage servicers in particular may face capacity constraints.”