Today, the Consumer Financial Protection Bureau ("CFPB" or "Bureau"), issued its outline of proposals under consideration for the regulation of debt collection. More than three years in the making, the CFPB's proposals will subject debt collectors to stricter rules under the Fair Debt Collections Practices Act ("FDCPA"). The Bureau's release came in preparation for the convening of a Small Business Review Panel ("Panel") to gather feedback from small debt collection industry players, which constitute the large majority of debt collection firms, according to the CFPB. The Panel process is the first step in the debt collection rulemaking process.
Many of the proposals are enhancements to existing policies and procedures used by leading edge debt collectors today, with a few new wrinkles. Some of the key points are as follows:
The CFPB reviewed more than 23,000 responses to its Advanced Notice of Proposal Rulemaking ("ANPR"). The Bureau also conducted a survey to examine consumer experiences with debt collection, engaged in consumer testing of disclosures and carried out an industry survey to get a better sense of current collector practices.
The Small Business Regulatory Enforcement Fairness Act ("SBREFA") directs the CFPB to convene a Panel when considering a proposed rule that could have a significant impact on a substantial number of small entities. In addition to the CFPB, the Small Business Administration ("SBA") Office of Advocacy and the Office of Management and Budget ("OMB") will also preside over the Panel, which will convene at the end of August. At the conclusion of the Panel meeting, debt collector representatives will submit written comments and the CFPB, SBA and OMB will prepare a final report that will be placed in the rulemaking record. The CFPB's proposal notes that a second Panel will be convened to consider first-party collection efforts, a highly unusual bifurcation of the SBREFA process. It is anticipated that the proposed rule for debt collection will not be published until sometime in late 2017.
Additional insight and analysis of the CFPB's outline of proposal will be forthcoming from Clark Hill's Consumer Financial Services Regulatory & Compliance Practice Group.