The Consumer Financial Protection Bureau today proposed a long-awaited rule that would modernize and clarify rules around third-party debt collection. Issued under the Fair Debt Collection Practices Act, the rule would not generally apply to creditors collecting their own debts and thus would not generally apply to banks. Because some banks place debt with third-party debt collectors, however, many must monitor their compliance with the FDCPA, and the American Bankers Association will comment on the proposal.
The proposed rule addresses several forms of communication not were not in place at the time of the FDCPA’s passage in 1977—such as mobile phones, text messaging, email and social media—and would provide clarity on how and when collectors can use these forms of communication. The rule would also add substantial consumer protections, including a limit on the number of times that a collector may call a consumer, consumer opt-out procedures for certain collection communications and prohibitions against public contact on social media platforms.
Comments to the proposed rule are due 90 days after it is published in the Federal Register. For more information, or to join ABA’s working group to provide input, contact ABA’s Diana Banks.