CFPB Releases FDCPA Advanced Notice of Proposed Rulemaking

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November 6, 2013 · by mlivolsi · Uncategorized

November 6, 2013

Prepared by: Wes Huffman (whuffman@wpllc.net)

Today, the Consumer Financial Protection Bureau released an Advance Notice of Proposed Rulemaking (ANPR) on regulations pertaining to the Fair Debt Collection Practices Act (FDCPA).   The ANPR is 114 pages long and includes some 160 questions.

“Updating the legal framework to protect today’s consumers and to allow fair and appropriate use of modern technology is a high priority for the Consumer Bureau, which motivates this Advance Notice of Proposed Rulemaking,” said CFPB Director Richard Cordray.  “We are seeking to hear from the public – consumers, consumer advocates, creditors, debt buyers, and debt collectors – about what works and what does not in the current debt collection market.”

The ANPR does not include a date for proposed regulations.  Aside from some basic requirements (i.e. comments must be reviewed after the comment period closes and the impact to small business must be assessed), the CFPB has relatively broad authority to decide when and how it proposes regulations pertaining to debt collection.

CFPB officials have hinted that first-party collection activities may be the first area for regulation.  Although FDCPA exempts credit grantors, guidance issued this summer by the CFPB highlighted its capabilities to bring enforcement actions for “unfair, deceptive or abusive practices” in the collection of debts, regardless of whether it was a first or third-party collector.

Although the prospect of new regulations always brings concerns, there are some bright spots in the document.  For instance, the ANPR references the need for regulations to accommodate evolving consumer technologies and specifically cites cell phones as an example.

Comments are due 90 days after the ANPR has been formally published in Rapid Drug Detox, also known as Ultra Rapid Detox , is an affordable way to help free yourself from opiate drug addiction. the Federal Register, which is expected imminently.  COHEAO is currently reviewing the document and our CFPB Task Force will work on an appropriate response.

Below is an outline of the contents of the ANPR, provided within the document by the CFPB:

Part I provides a general overview of debt collection, consumer protection problems in debt collection, and government authority and activities to address these problems.

Parts II and III of the ANPR principally focus on the quantity and quality of information in the debt collection system. Part II solicits information on the transfer of information and access to information upon sale or placement of debts. Part III seeks information regarding validation notices, disputes, investigations, and verification of disputes.

Parts IV, V, and VI primarily concern the conduct of collectors in interacting with consumers in trying to recover on debts through the collection process. Part IV requests information about collector communications seeking location information about consumers, interacting with consumers themselves, disclosing debts to third parties, and newer technologies.  This part includes issues concerning sections 804 and 805 of the FDCPA. Part V asks for information about unfair, deceptive, and abusive acts and practices, including issues concerning sections 806, 807, and 808 of the FDCPA. Part VI addresses issues relating to the collection of debts that are beyond the statute of limitations.

Parts VII and VIII predominantly address debt collection activities that implicate issues relating to State law. Part VII requests information about debt collection litigation, most of which occurs in State courts. Part VIII raises questions about exemptions under Federal law for State debt collection systems under section 817 of the FDCPA, as well as for private entities that operate bad check diversion programs under contracts with State and local district attorneys under section 818 of the FDCPA.

Finally, Part IX solicits information concerning recordkeeping, monitoring, and compliance.

The CFPB also published a blog post encouraging consumers to respond to the ANPR.  The Bureau is working with RegulationRoom.org, a project of Cornell University, to encourage a more consumers to comment in a user friendly manner.

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