CFPB Proposes Delay to Implementation of Its Debt Collection Rules

Bradley Arant Boult Cummings LLP

Yesterday, the CFPB issued a proposed rule that would extend implementation of both parts of its debt collection rule by 60 days — from November 30, 2021, to January 29, 2022. The debt collection rule, which we have discussed here in detail, addresses numerous topics related to debt collection, including debt collection call volume, restrictions on certain communication mediums under certain circumstances, a prohibition on bringing or threatening to bring legal action to collect time-barred debt, restrictions on certain forms of consumer credit reporting, and rules for electronic communications. The rule also contains various safe harbors.

The Bureau explains that “[s]ince the Debt Collection Final Rules were published, the global COVID-19 pandemic has continued to cause widespread societal disruption, with effects extending into 2021.” Thus, in light of the continuing pandemic, the CFPB “believes that extending the rules’ effective date by 60 days . . . may provide stakeholders with sufficient time for review and implementation.”

In addition to explaining its reasoning, the CFPB has requested stakeholder commentary on several questions. First, the Bureau requests comment on whether an extension is appropriate and, if so, whether 60 days is an appropriate amount of time for an extension. The Bureau has also requested comment about whether it should consider retaining November 30, 2021, as an effective date for some or all of the Debt Collection Rules’ safe harbor provisions. Notably, the CFPB singles out the potential “costs and benefits of permitting debt collectors to obtain a safe harbor for using the Bureau’s model validation notice as of November 30, 2021[.]” Comments are due 30 days after publication in the Federal Register.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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