Long-Awaited CFPB Debt Collection Rulemaking Set to Go into Effect
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Long-Awaited CFPB Debt Collection Rulemaking Set to Go into Effect

Author, American Bar Association's Consumer Financial Services Committee Newsletter, September 21, 2021

As we head into the fall season, it appears that the long-awaited rules implementing the Fair Debt Collection Practices Act (“FDCPA”) issued under Regulation F (12 C.F.R. part 1006) (“Debt Collection Rules”) will go into effect this November. Notably, this rulemaking process began nearly 10 years ago at the Consumer Financial Protection Bureau (“Bureau” or “CFPB”).

Although the CFPB finalized and published the Debt Collection Rules in the Federal Register at the end of 2020,[1] last spring the CFPB proposed a 60-day delay of the Debt Collection Rules’ effective date to January 29, 2022.[2] Reversing course, on July 30, 2021 the CFPB announced that the Debt Collection Rules will take effect as originally planned, on November 30, 2021.[3]

Explaining its decision to retain the original effective date, the CFPB stated:

The public comments generally did not support an extension. Most industry commenters stated that they would be prepared to comply with the final rules by November 30, 2021. Although consumer advocate commenters generally supported extending the effective date, they did not focus on whether additional time is needed to implement the rules. The alternative basis for an extension that many commenters urged, a reconsideration of the rules, was beyond the scope of the NPM and could raise concerns under the Administrative Procedure Act. Nothing in this decision precludes the CFPB from reconsidering the debt collection rules at a later date.[4]Accordingly, it appears that the Debt Collection Rules, which were finalized in October of 2020 and December of 2020 just before the change in presidential administration, will become effective. As is the case for many rules finalized under a previous administration, it is possible that there may be some additional rulemaking activity or other actions from the Bureau in the months to come.

While those in the debt collection industry, as well as creditors such as banks and credit unions, feverishly work to establish compliance regimens in response to these fairly complex and robust new requirements, it is instructive to review the history of this rulemaking and predict what may lie ahead in the next few years.

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