The Consumer Financial Protection Bureau (CFPB) has issued a Notice of Proposed Rulemaking (NPRM) to implement the Fair Debt Collection Practices Act (FDCPA). According to the CFPB, the proposal would provide consumers with clearer protections against harassment by debt collectors and straightforward options to address or dispute debts.
“The Bureau is taking the next step in the rulemaking process to ensure we have clear rules of the road where consumers know their rights and debt collectors know their limitations,” said CFPB Director Kathleen L. Kraninger. “As the CFPB moves to modernize the legal regime for debt collection, we are keenly interested in hearing all views so that we can develop a final rule that takes into account the feedback received.”
As part of the proposal, the CFPB intends to establish a clear, bright-line rule limiting call attempts and telephone conversations, clarify consumer protection requirements for certain consumer-facing debt collection disclosures, clarify how debt collectors can communicate with consumers, and prohibit suits and threats of suit on time-barred debts and require communication before credit reporting.
For debt collectors and servicers, communication with customers is a key issue, as “robocalls” have become more of an issue. According to the Urban Institute and a report from the U.S. Treasury, the 27-year old Telecommunications Consumer Protection Act (TCPA) may be preventing mortgage servicers from reaching customers when that contact could be helpful. For example, a servicer might not be able to inform borrowers about mortgage relief options or warn about scams, or reach thousands of borrowers with time-sensitive information during natural disasters such as hurricanes, especially when landlines may be down and cell phones are the only option.
The National Mortgage Servicing Association (NMSA) last year wrote a letter to the to the Federal Communications Commision (FCC), outlining their suggestions for changes to regulations imposed by the TCPA. One suggestion involved a re-examination of the definition of an "autodialer." For example, the NMSA proposed that it should be made clear that the definition of an autodialer does not include dialing from a list, and that the technology used must involve both generating a phone number in random or sequential order and calling that generated number.
In addition, the NMSA supports the FCC's creation of a reassigned number database as well as a "safe harbor" for businesses to check the database. The NMSA also supports the integration of a more structured process in order for consumers to revoke consent to receive calls from a company, giving consumers peace of mind while reducing the headache for businesses to trying to comply with regulations.
Exempting servicers from the Act would give servicers the opportunity to reach out when it would benefit the borrower, and allow borrowers to identify numbers that have been transferred. Another option would be to temporarily exempt servicers from Act requirements specifically during natural disasters in order to send out time-sensitive information.