CFPB considers delay of debt collection rules effective date

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In the wake of the COVID-19 pandemic, the Consumer Financial Protection Bureau (CFPB) is considering extending the effective date of two recent debt collection rules.

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The action seeks to provide affected parties with more time to comply. The CFPB issued a Notice of Proposed Rulemaking (NPRM) to delay by 60 days the effective date of the pair of final rules issued under the Fair Debt Collection Practices Act (FDCPA).

Authorities indicated the proposal will be open for comment for 30 days following publication in the Federal Register, noting the debt collection rules issued in late 2020 are scheduled to take effect on Nov. 30, 2021. The CFPB is proposing to extend the effective date of both rules to Jan. 29, 2022.

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

Meanwhile, per the CFPB, 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 and 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.

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