On April 19, 2021, the Consumer Financial Protection Bureau (CFPB) issued an Interim Final Rule and press release in support of the Centers for Disease Control and Prevention Order, which temporarily halts certain residential nonpayment evictions. The CFPB rule imposes additional requirements on debt collectors pursuing non-payment evictions. The interim final rule goes into effect May 3, 2021.
As discussed in prior posts in March and April, the CDC Order, now extended through June 30, is not an automatic stay of all evictions and does not relieve any tenant of paying rent. Instead, the CDC Order allows certain tenants to invoke the protections of the CDC Order in regard to nonpayment evictions if they properly submit a CDC Hardship Declaration or like form. When the Order’s protections are properly invoked by a covered tenant, the tenant cannot be evicted and removed from their leased premises until after the expiration of the CDC Order, which is now June 30, 2021.
The CFPB, concerned that consumers/tenants are not aware of their protections under the CDC Eviction Order and that Fair Debt Collection Practices Act (FDCPA)-covered debt collectors may be engaging in eviction-related misconduct, instituted additional requirements on debt collectors when seeking to evict consumers/tenants for nonpayment of rent.
New affirmative notice requirement
The CFPB’s interim final rule requires that debt collectors (as defined under the FDCPA), including attorneys, affirmatively provide “clear and conspicuous” written notice to tenants of their protections under the CDC Eviction Order. The notice must be provided on the same date as the eviction notice, or if no eviction notice is required by law, on the date that the eviction action is filed.
Specifically, the rule provides:
During the effective period of the CDC Order, a debt collector collecting a debt in any jurisdiction in which the Order applies must not, in connection with the collection of that debt, file an eviction action for non-payment of rent against a consumer to whom the CDC Order reasonably might apply without disclosing to that consumer clearly and conspicuously in writing, on the date that the debt collector provides the consumer with an eviction notice, or if no eviction notice is required by applicable law, on the date that the eviction action is filed, that the consumer may be eligible for temporary protection from eviction under the CDC Order.
Who qualifies as a “Debt Collector” subject to the rule?
Debt collectors are defined as “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.” Therefore, attorneys who engage in eviction proceedings on behalf of landlords or property owners to collect unpaid residential rent are generally debt collectors as defined by the FDCPA.
The FDCPA generally does not apply to landlords or property owners collecting rent on their own behalf. The FDCPA, a federal regulation, becomes triggered only when any third-party collector, attorney, or other agent is attempting to collect back rent on behalf of the property owner or landlord.
When is the disclosure required to be given?
As noted above, the disclosure is required to be given to the consumer/tenant, on the date that the debt collector provides the consumer/tenant with an eviction notice, for nonpayment of rent evictions only, or if no eviction notice is required by applicable law, on the date that the eviction action is filed. Specifically, the interim final rule provides:
- Eviction notice means the earliest of any written notice that the laws of any state, locality, territory, or tribal area require to be provided to a consumer before an eviction action against the consumer may be filed.
- Eviction notices include Notices to Quit, Notices to Pay Rent or Quit, and Notice to Terminate Tenancy.
- If the landlord or the property manager rather than the debt collector provides the eviction notice, the interim final rule requires the debt collector to provide the disclosure on the date that the debt collector files the eviction action—even if the landlord or the property manager separately disclosed the existence of the CDC Order.
What are the “clear and conspicuous” disclosure requirements under the rule?
- The disclosure must be readily understandable
- The disclosure must be given in writing, not orally or not via email
- The location and type size also must be readily noticeable and legible, although no minimum type size is mandated
- The disclosure may be provided with the eviction notice as a separate document or on the eviction notice itself
What does the interim final rule not require of debt collectors?
- The rule does not require a debt collector to provide the disclosure more than once, nevertheless, the CFPB also believes that a consumer who has been provided the disclosure once would not be harmed by receiving the disclosure again.
- The debt collector is not required to ensure that the consumer actually receives the disclosure; the requirement may be satisfied simply by delivering the disclosure to the address that is the subject of eviction proceedings.
How long does the interim final rule apply?
As mentioned above, the interim final rule goes into effect on May 3, 2021. Because the interim final rule is designed to address deceptive and unfair debt collection practices with respect to the CDC Order, the prohibitions apply only during the effective period of the CDC order, which is currently set to expire on June 30, 2021. If the CDC Order is extended, the interim final rule will be extended as well.
Landlords and/or debt collectors with questions should contact an experienced landlord-tenant attorney to discuss their specific situation.