CFPB: No Extension for Effective Date of Debt Collection Final Rules

The Consumer Financial Protection Bureau today said it would not delay the effective date of two final rules issued under the Fair Debt Collection Practices Act, which governs the activity of third-party debt collectors. The rules will take effect as planned on Nov. 30. The CFPB in April had proposed to delay the rules’ effective date until Jan. 29, 2022, but the CFPB said it “has now determined that such an extension is unnecessary,” and will formally withdraw the extension proposal. The CFPB noted that it has not precluded reconsideration of the rules at a later date.

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. The first rule—issued in October 2020—addressed the use of text messaging and email to contact consumers regarding debts, and provided 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.