The Consumer Financial Protection Bureau announced in its spring rulemaking agenda issued this week that it expects to take final action on the proposed debt collection rules in October 2020.
The agenda was released after the U.S. Supreme Court issued its decision in Seila Law v. Consumer Financial Protection Bureau, stating that the CFPB’s leadership structure is unconstitutional. Read ACA’s report on the decision.
The decision could have major implications on the debt collection rule since it is an election year and the sitting president can now remove the CFPB director for any reason. However, for now the bureau is on track to release the final rule in October, according to its agenda.
The proposed rule, released in May 2019, addresses a number of key issues about which ACA International has long sought clarity, including safe-harbor procedures for the use of voicemail messages, text messages and email when communicating with consumers about their debts. The proposed rule also provides more clarity on the requirements for a validation notice, including a model form for a validation notice, and addresses the use of modern technology and communication.
The CFPB will take final action on a Supplemental Notice of Proposed Rulemaking (SNPRM) on out-of-statute debt disclosures at a later date, according to the rulemaking agenda. It extended the comment deadline on the SNPRM to Aug. 4, 2020.
Meanwhile, the CFPB is also seeking comments on debt validation notice qualitative testing due July 29, 2020, according to a Federal Register notice .
The bureau is assessing the effectiveness and performance of its model debt collection validation notices and plans to conduct cognitive interviews as part of that process, according to the notice.
It will collect information on how consumers locate and use information in the model notices, including:
- Whether the consumer can locate and use important information effectively, such as information about the debt, information about the consumer’s rights, and information about how the consumer may respond if they so choose; and
- How consumers view and respond to paper and electronic versions of the model validation notice.
The bureau specifically seeks comments on whether the collection of information is necessary for the proper performance of the functions of the bureau, including whether the information will have practical utility; the accuracy of the bureau’s estimate of the burden of the collection of information, including the validity of the methods and the assumptions used; ways to enhance the quality, utility, and clarity of the information to be collected; and ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.
In its current state, the proposed debt collection rule includes certain disclosures, such as an itemization of the debt and plain-language information about how a consumer may respond to a collection attempt, including by disputing the debt and methods by which collectors may provide required disclosures electronically, for example, by email or text message.
View the Federal Register notice to submit comments .
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By Federal Register notice to submit comments