Agencies warn on evictions (court: not so fast)
(May 7, 2021) Apartment landlords were put on notice this week by the CFPB that federal protections are in place to keep tenants from being evicted, at least for the short term, due to the financial impact of the coronavirus crisis.
However, the ruling of a federal court later in the week has placed the future of those protections in doubt without congressional action.
Monday, the bureau announced it – in concert with the Federal Trade Commission (FTC) — had sent letters to companies that the agencies said collectively own more than 2 million apartment units nationwide. “The letters remind these landlords of federal protections in place to keep tenants in their homes and stop the spread of COVID-19,” according to a release from CFPB. “The Centers for Disease Control and Prevention (CDC) has extended until June 30 a temporary moratorium on evictions for non-payment of rent, and the CFPB has issued an interim final rule, which takes effect today, establishing new notice requirements under the Fair Debt Collection Practices Act (FDCPA).”
According to the agencies, the letters ask landlords to examine their practices to ensure they comply with the CDC moratorium and the FTC Act and “remediate any harm to consumers stemming from any such law violations.” The letters also, they said, encourage landlords to notify FDCPA-covered debt collectors working on their behalf, which may include attorneys, of the CDC moratorium, applicable state or local moratoria, and those parties’ obligations under the FTC Act and FDCPA, including the CFPB’s interim final rule.
However, on Wednesday, a federal judge in Washington, D.C., said the CDC acted outside of its authority in extending the temporary eviction moratorium. Ruling in favor of a group of property managers and real estate trade associations, U.S. District Judge Dabney Friedrich vacated the CDC order.
“It is the role of the political branches, and not the courts, to assess the merits of policy measures designed to combat the spread of disease, even during a global pandemic,” the order states. “The question for the Court is a narrow one: Does the Public Health Service Act grant the CDC the legal authority to impose a nationwide eviction moratorium? It does not.”
The status of CFPB’s new rule is now unclear. The Justice Department, however, has indicated it will appeal the judge’s ruling and may ask for a stay in the meantime.