Debt collection

CFPB shelves plan to extend compliance deadline for debt collection

The Consumer Financial Protection Bureau said two debt collection rules would go into effect on November 30 as originally planned, rejecting a plea from consumer advocates for the agency to reopen the rules.

The CFPB said on Friday that the agency no longer plans to extend the effective dates until January 29, 2022, as previously proposed. The agency had considered allowing more time to weigh concerns from consumer groups that the Trump-era rules were too weak. But reopening the regulations has legal issues, the office said.

“While stakeholders from consumer advocates generally supported extending the effective date, they did not consider whether more time was needed to implement the rules,” said the CFPB in a press release. “A review of the rules went beyond the [notice of proposed rulemaking] and could raise concerns under the Administrative Procedure Act.

The final debt collection rules limit how often a debt collector can call a borrower to seven calls per week, but allow unlimited contact via voicemail, email, and text.

Consumer advocates opposed the latter provision, arguing that consumers should be able to opt for unlimited electronic communications. Consumers will be allowed to opt out at any time.

“They are leaving the rules as they are, which I think is a huge win for the industry,” said Joann Needleman, head of Clark Hill’s consumer financial services regulatory group.

CFPB first rule of recovery, published in October by former CFPB director Kathy Kraninger, appointed by Trump, focused on texts and emails, updating the Fair Debt Collection Practices Act.

A second rule Clarified the information debt collectors must provide to consumers at the start of correspondence and prohibits debt collectors from suing or threatening to sue consumers for prescribed debts. The second rule also requires debt collectors to take specific steps to disclose the existence of a debt to consumers before disclosing debt information to a consumer reporting agency.

The CFPB reiterated that it can always consider changing either rule at any time.

“Nothing in this decision prevents the CFPB from reconsidering the debt collection rules at a later date,” the office said.


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