On November 30, 2020, the Consumer Financial Protection Bureau (CFPB) published its debt collection final rule in the Federal Register. This is obviously a significant event because the rule is set to become effective one year after that milestone, which means that November 30, 2021, is a day we should all be circling on our calendars. The 653-page final rule was originally released by the CFPB a month earlier on October 30, 2020, and addresses numerous topics, including restrictions on communicating at inconvenient times or places, restrictions on using certain communications mediums under certain circumstances, limited content messages, call frequency limitations, and rules for electronic communications.
As we have been working through the final rule ourselves and working with clients as they prepare for the implementation period ahead, it has become abundantly clear that this rule will likely take time to successfully implement. For starters, the rule's impact is likely to be far-reaching. Whether you are a tried and true debt collector or a mortgage, auto, card, or unsecured loan servicer that only qualifies as a debt collector under the FDCPA for certain accounts, the rule will require some substantial shifts in practices and will likely require the adoption of new technologies to facilitate compliance. Even first-party creditors, who technically may not be subject to the FDCPA or the CFPB's final rule, should analyze the restrictions and assess whether they might form best practices.
As we previously noted, the CFPB has already indicated that it is not yet done with its debt collection related rulemaking and intends to issue a "disclosure-focused" rule in December 2020. The disclosure focused rule will likely clarify certain disclosure obligations, consumer reporting obligations, and the collection of time-barred debt. It is not yet clear whether or how that subsequent rulemaking will align with the November 30, 2021, effective date of the larger rule.
Regardless of whether you are a debt collector, a loan servicer, or a first-party creditor, we strongly recommend that you take the time now to analyze the impact that the final rule might have on your business. There will likely be many entities that need most, if not all, of the upcoming twelve months to successfully implement all of the nuances of the final rule.
For more information on what is in the final rule generally as well as some deep-dive sessions into particular topics, please check out Bradley's webinar series on the debt collection final rule:
- Introduction to CFPB's Debt Collection Final Rule Webinar (November 5, 2020)
- Inconvenient Time, Inconvenient Place, and Medium Restrictions: Working Session 1 Webinar (November 10, 2020)
- Limited Content Messages: Working Session 2 Webinar (November 12, 2020)
- Electronic Communications: Working Session 3 Webinar (November 19, 2020)
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.