CFPB Proposes Delay of Effective Date for Recent Debt Collection Rules

Consumer Financial Protection Bureau

WASHINGTON, D.C. — The Consumer Financial Protection Bureau is proposing extending the effective date of two recent debt collection rules to give affected parties more time to comply due to the ongoing COVID-19 pandemic.

The CFPB issued a Notice of Proposed Rulemaking (NPRM) to delay by 60 days the effective date of two final rules issued under the Fair Debt Collection Practices Act (FDCPA). The debt collection rules, issued in late 2020, are scheduled to take effect on November 30, 2021. The CFPB is proposing to extend the effective date of both rules to January 29, 2022. The proposed delay would allow stakeholders affected by the pandemic additional time to review and implement the rules.

The first debt collection rule, issued in October 2020, focuses on the use of communications related to debt collection, and clarifies prohibitions on harassment and abuse, false or misleading representations, and unfair practices by debt collectors when collecting consumer debt.

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The second debt collection rule, issued in December 2020, clarifies disclosures debt collectors must provide to consumers at the beginning of collection communications. The rule also prohibits debt collectors from making threats to sue, or from suing, consumers on time-barred debt. The rule requires debt collectors to take specific steps to disclose the existence of a debt to consumers before reporting information about the debt to a consumer reporting agency.

The proposal will be open for comment for 30 days following publication in the Federal Register. Read the text of the proposed rule here.

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