CFPB Seeks Delay in Effective Date of the Debt Collection Final Rule

4 min

Update (July 30, 2021): The Consumer Financial Protection Bureau (CFPB) announced on July 30, 2021, that the two final rules issued under the Fair Debt Collection Practices Act (FDCPA) will take effect as planned, on November 30, 2021. The CFPB issued a proposal in April 2021 that, if finalized, would have extended the effective dates to January 29, 2022. The CFPB determined that such an extension is unnecessary. For more information on the two final rules: December 2020 Final Rule (consumer disclosures); and October 2020 Final Rule (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).

The Debt Collection Final Rules, which have an effective date of November 30, 2021, may be postponed by 60 days until January 29, 2022, the Consumer Financial Protection Bureau (CFPB) announced on April 7, 2021.

The state of play: The CFPB said it proposed extending the effective date of the Debt Collection Final Rules issued under the Fair Debt Collection Practices Act (FDCPA) "to afford stakeholders additional time to review and, if applicable, to implement" the rules.

Background: The CFPB issued two final rules in 2020 to implement the FDCPA:

  • The first debt collection rule, issued in October 2020, focuses on electronic communications (e.g., email, text messages, and social media) and interprets and applies prohibitions on harassment or abuse, false or misleading representations, and unfair practices.
  • The second debt collection rule, issued in December 2020, clarifies the required validation information and disclosures, including the provision of a model notice; prohibits debt collectors from bringing or threatening to bring a legal action against a consumer to collect a time-barred debt; and requires debt collectors to take certain actions before furnishing information about a consumer's debt to a consumer reporting agency.

What they're saying: The CFPB is citing the "ongoing societal disruption caused by the global COVID-19 pandemic" as its rationale for proposing to extend the effective date. The CFPB noted that "debt collectors could choose to comply with the rules' requirements and prohibitions before the effective date." However, "the FDCPA and other applicable law would continue to govern the conduct of FDCPA debt collectors." Furthermore, the CFPB warns, "to the extent that the Debt Collection Final Rules establish a safe harbor from liability for certain conduct, or a presumption that certain conduct complies with or violates the rules, those safe harbors and presumptions will not take effect until the effective date."

What they're asking: The proposal requests comment on whether the CFPB should extend the effective date for all or some of the Debt Collection Final Rules, including the safe harbors, and if so, whether 60 days is an appropriate length of time for such an extension. The CFPB 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.

What's next: The proposal was published in the Federal Register on April 19, 2021. Comments are due on or before May 19, 2021.

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CFPB Issues Proposed Debt Collection Rules (2019)

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What to Expect in a Narrowed CFPB Debt Collection Rulemaking (2017)

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