On November 6, the CFPB announced an advance notice of proposed rulemaking (ANPR) to solicit input on a wide array of issues related to consumer protection in the debt collection market. With the release of the ANPR, the CFPB also announced the publication of approximately 5,000 debt collection complaints in its consumer complaint database.
The ANPR marks the Bureau’s first step toward exercising its rulemaking authority under the Fair Debt Collection Practices Act (FDCPA). Notably, although the FDCPA generally applies only to third-party debt collectors, the CFPB’s regulations could extend to original creditors as well. In addition to the CFPB’s express authority to make substantive rules under the FDCPA, the Bureau made all creditors subject to debt collection guidance issued earlier this year pursuant to its general authority to regulate unfair, deceptive, and abusive practices.
The 162 questions contained in the ANPR focus primarily on the accuracy of information used by debt collectors, how to ensure consumers know their rights, and the communication tactics collectors employ to recover debts.
Information Accuracy—Due to concern over how information is transferred, the CFPB seeks input on current processes for transferring records and ensuring the integrity of information transmitted. Specifically, the CFPB inquires about how account holders are identified and verified, how claims of improper identification are handled, how amounts of indebtedness are confirmed, and how claims of indebtedness are supported.
Informed Consumers—Based on its belief that consumers may not sufficiently understand debt collection processes, the CFPB seeks input on the quality of information and disclosures provided to debtors. Specifically, the CFPB inquires about the information and disclosures provided with respect to the specific debt being collected and the debtors’ legal rights, including the rights to dispute debt and limit certain communications.
Communication Tactics—Based on its concern that harmful communication tactics continue in the debt collection market, the CFPB seeks input on tactics not addressed by the FDCPA. Specifically, the CFPB inquires about frequency of contact with debtors, the means of communication employed, and the use and prevalence of threats by collectors.
The deadline for comments is 90 days from publication of the ANPR in the Federal Register.