The Consumer Financial Protection Bureau (CFPB) announced in October the final rule to reformulate and clarify the prohibitions on harassment and abuse, false or misleading representations and unfair debt collection practices when collecting consumer debts. But what does all of this mean exactly?
to a free DS News webinar titled “Taking a Closer Look: The CFPB Final Rule on the FDCPA (Fair Debt Collection Practices Act)”, sponsored by Padgett Law Group, the firm’s General Counsel, Foreclosure, Marissa M. Yaker and the Vice President and Lawyer General Laura K. Conrad helped answer this question in detail.
A recording of the webinar, which includes slides detailing everything that was discussed during the hour-long session, will be posted on the Legal League 100 website, legalleague100.com, within 2-4 working days.
As a result of the initial rule proposal, “the office received some 14,000 comments from consumers, consumer groups, members of Congress, government agencies, creditors, debt collectors, industry associations. industry, etc., ”Conrad explained. The CFPB took the comments into account before making its final decision, she said of the process.
The final rule of the office, containing 653 pages, including commentaries, is dense. As Yaker says, “the changes have a lot of nuances.”
The new rule comes into effect one year after its publication in the Federal Register (11/30/2020).
“Debt collection is estimated to be a $ 12.7 billion industry employing nearly 123,000 people at approximately 7,800 collection agencies in the United States,” Yaker told attendees.
The lawyers provided an overview of the general rule changes, performed a section-by-section analysis, and explained some of the finer points of the CFPB Final Rules, including:
- How consumers can set limits on debt collection communications to reflect their preferences and limits on communicating with third parties about a consumer’s debt
- Communication methods allowed under the final rule
- Provisions on disputes and retention of records.
The clarifications regarding disclosure in debt collection are particularly important for the new final rule, lawyers told attendees.
“For example, a debt collector may call a consumer to discuss the consumer’s debt at a time that the consumer has designated as ‘troublesome’, but fails to reach the consumer because he refuses to answer the phone.” , Yaker said. “In this example, the debt collector would likely have acted to initiate communication and thereby attempted to contact the consumer at an inconvenient time in violation of the FDCPA.”
She added that details relating to lawyers 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, the pre-closing presenters noted, except to the extent that the creditor is an FDCPA debt collector.
A CFPB press release relating to the final rule, as well as links to the full text, are available on the CFPB website, here.