Summary tackles proposed delay on debt collection rules

(April 30, 2021) The proposed delayed compliance dates for two debt collection rules from CFPB issued under the Fair Debt Collection Practices Act (FDCPA) has been summarized by NASCUS and is now posted on the association’s website.

This latest summary, like all of those developed and published by NASCUS, is available to members only.

Under the proposal, the two debt collection rules (which had been slated to take effect Nov. 30) will now have a delayed compliance deadline of Jan. 29, 2022. The bureau, when it issued the proposal, said the delay is intended to give those affected more implementation time amid the ongoing challenges of the COVID-19 pandemic.

Late last year, the bureau issued two final (in October and December) under the FDCPA. The October final rule focused on the use of communications related to debt collection and clarified prohibitions on harassment and abuse, false or misleading representations, and unfair practices by debt collectors when collecting consumer debt. The December rule clarified disclosures debt collectors must provide to consumers at the beginning of collection communications. It also prohibited 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.

But the bureau, earlier this month, determined that the COVID-19 pandemic had caused “widespread societal disruption, with effects extending into 2021.” In light of that disruption, the agency said, providing additional time for review – and implementation – of the new 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 noted, in proposing the delay, said 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 due May 19.

NASCUS Summary: CFPB proposes delay of effective dates for recent debt collection rules (members only)