CFPB Proposes Delay to Effective Date of Debt Collection Rules

The Consumer Financial Protection Bureau will propose to extend the effective date of its two recent debt collection rules from Nov. 30, 2021, to Jan. 29, 2022. Both rules were issued pursuant to the Fair Debt Collection Practices Act which governs the activity of third-party debt collectors. The FDCPA does not generally apply to creditors collecting their own debts and thus does not generally apply to banks, however banks routinely oversee the activity of third-party collectors. Comments on the extension, including whether the proposed 60-day extension is sufficient, will be due 30 days after publication in the Federal Register.

The first rule—issued in October 2020—addressed the use of text messaging and email to contact consumers regarding debts, and provides for consumer opt-out of these contact methods. It also included provisions on disputes, as well as record retention requirements for FDCPA debt collectors. The second final rule—issued in December 2020—covered passive debt collection, time-barred debt and required validation notices to consumers.