The Consumer Financial Protection Bureau (CFPB) in October, announced the final rule to restate and clarify prohibitions on harassment and abuse, false or misleading representations, and unfair practice by debt collectors when collecting consumer debt. But what, exactly, does it all mean?
At a complimentary DS News webinar entitled "Taking a Closer Look: The CFPB Final Rule on the FDCPA (Fair Debt Collection Practices Act),” sponsored by Padgett Law Group, the firm's Managing Attorney, Foreclosure, Marissa M. Yaker and VP and General Counsel Laura K. Conrad helped answer that question in detail.
A recording of the webinar, which includes slides detailing everything discussed in the hour-long session, will be posted on Legal League 100's website, legalleague100.com, within 2-4 business days.
Following the initial rule proposal, "the bureau received some 14,000 comments from consumers, consumer groups, congress members, government agencies, creditors, debt collectors, industry trade associations, and more," explained Conrad. The CFPB took the feedback into consideration prior to its final ruling, she says of the process.
The bureau's final rule, containing 653 pages including commentary, is dense. As Yaker puts it, "the changes have a lot of nuances."
The new rule goes into effect one year following publication in the Federal Register (11/30/2020).
"Debt collection is estimated to be a 12.7 billion dollar industry employing nearly 123,000 people across approximately 7,800 collection agencies in the United States," Yaker told the attendees.
The lawyers broke down an overview of the general rule changes, conducted a section-by-section analysis, and proceeded to explain some of the CFPB's final rules finer points including:
- How consumers may set limits on debt collection communications to reflect their preferences and limits on communicating with third parties about a consumer’s debt
- Methods of Communication allowed under the Final Rule
- Provisions on disputes, and record retention.
Especially important to the new final rule is clarifications regarding communication in connection with debt collection, the lawyers told the attendees.
"For example, a debt collector might call a consumer to discuss the consumer's debt at a time the consumer has designated 'inconvenient' but fail to reach the consumer because he/she declines to answer the telephone," Yaker said. "In this example, the debt collector would likely have acted to initiate communication and thus attempted to communicate with the consumer at an inconvenient time in violation of the FDCPA."
She added that clarifications related to attorneys representing a consumer on one or more debts have been added. "getting that clarification is an important distinction," she said.
The final rule does not apply to creditors, noted the presenters before closing, except to the extent that the creditor is an FDCPA debt collector.
A CFPB press release related to the final rule, along with links to the full text, can be found on the CFPB website, here.