The CFPB Seeks Comments from the Public on Potential Rules About Debt CollectionRead Time: 3 mins
On November 6, 2013, the CFPB released an “Advance Notice of Proposed Rulemaking,” (ANPR) seeking comments, data, and further information from the public about debt collection practices. It will use these comments to create rules under the Fair Debt Collection Practices Act. These rules, if implemented, will be the first federal rules to govern the debt collection industry. Based on the questions the CFPB is asking, those rules promise to be comprehensive.
The CFPB wants to promulgate rules under the FDCPA for three stated reasons. First, it believes that there are “significant consumer protection problems related to debt collection” that require its attention, and that its rule-making authority under the FDCPA could be used to address some of these “longstanding problems.” Second, the CFPB recognizes that there have been substantial technological advancements useful to both consumers and debt collectors, and that the FDCPA is currently ill-equipped to handle these evolving communication tools. “Rulemaking permits the Bureau to consider these technological issues in a comprehensive and careful manner, fostering the considered development of standards that provide adequate protection for consumers while reducing uncertainty for collectors.” Third, “[t]he Bureau is especially interested in information bearing on whether a rule under the Dodd-Frank Act would be useful to protect consumers from the conduct of creditors collecting in their owns names on debts arising out of consumer credit transactions.” While the CFPB recognizes that the FDCPA does not apply to creditors, it explained that it would use its general rule-making authority to prohibit creditors from engaging in harmful debt collection practices.
Moreover, the CFPB seeks comments from the public on whether statutory changes to the FDCPA are warranted, and will include such comments and suggested amendments to the Act in its annual report to Congress.
In the ANPR, the CFPB asks the public to respond to 162 questions about debt collection, each of which has several parts. Many questions touch on problems that have long vexed debt collectors. For example, the CFPB asks for help in defining specific conduct it should consider false, deceptive, or misleading. It also asks whether it should make bright line rules about how many phone calls a debt collector should make, and if so, where it should draw that bright line. And it asks for guidance in resolving the problem of leaving voicemail messages in light of the concerns raised by the Foti decision.
The CFPB also asks the following:
- whether and to what extent creditors should monitor the conduct of debt buyers (including subsequent debt buyers, and whether it should require a debt buyer to provide additional information to a consumer about its identity;
- what type of information a creditor should pass to debt buyers and debt collectors, in terms of credit documentation, account data, dispute information, and consumer-specific issues, such as military status and whether the consumer’s first language is other than English;
- whether the debt collector should include in its validation notice the date on which the debt is barred by the statute of limitations;
- whether a debt collector should, if at all possible, determine the policy of a consumer’s employer with respect to an employee receiving communications about a debt at work, even before contacting the consumer; and
- whether there should be a “centralized repository” where creditors, debt collectors, debts buyers, and consumers could access documentation about the debt, and other such data.
The CFPB invites “consumers, consumer service organizations, creditors, collectors, or other interested parties to file comments describing the practical experiences that they have had or observed in the area of consumer debt collection[.]” These interested parties have until February 4, 2014 to respond.