Banking and Finance Law Daily CFPB confirms effective date of debt collection rules
Monday, August 2, 2021

CFPB confirms effective date of debt collection rules

By Charles A. Menke, J.D.

Two final rules issued by the Consumer Financial Protection Bureau under the FDCPA will take effect on Nov. 30, 2021, as originally planned, the agency announced.

The Consumer Financial Protection Bureau announced it will not be extending the time for the effective dates of two final rules issued under the Fair Debt Collection Practices Act, and that these rules will take effect on Nov. 30, 2021, as previously planned. Although the CFPB issued a proposal earlier this year that would have extended the effective dates to Jan. 29, 2022 (see Banking and Finance Law Daily, April 8, 2021), the Bureau stated it has determined that such an extension is unnecessary and that it intends to publish a formal notice in the Federal Register withdrawing the proposal.

The first final rule was issued in October 2020, and 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 (see Banking and Finance Law Daily, Nov. 2, 2020). The second final rule, which was issued in December 2020, clarifies disclosures debt collectors must provide to consumers at the beginning of collection communications, prohibits debt collectors from suing or threatening to sue 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 (see Banking and Finance Law Daily, Dec. 18, 2020).

According to the Bureau, public comments it received generally did not support the proposed extension with most industry commenters stating that they would be prepared to comply with the final rules by Nov. 30, 2021. In addition, while consumer advocate commenters generally supported extending the effective date, they did not focus on whether additional time is needed to implement the rules.

The CFPB emphasized that it is committed to informing consumers about their rights and protections under the rules and assisting debt collectors in implementing them. The CFPB also said it will consider additional guidance for debt collectors, including those that service mortgage loans, as necessary.

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