CFPB Proposes 60-Day Delay of Final Debt Collection Rules

Earlier this month, the Consumer Financial Protection Bureau (CFPB) proposed delaying the effective date of two debt collection rules issued under the Fair Debt Collection Practices Act (FDCPA). The rules are currently scheduled to take effect on November 30, 2021, but the CFPB is proposing an extension of the effective date to January 29, 2022. 

The CFPB’s Notice of Proposed Rulemaking (NPRM) would delay the effective date of both rules by 60 days to give affected parties more time to comply amidst the coronavirus pandemic. Specifically, stakeholders that have been affected by the pandemic would have more time to review and implement the rules.

The first debt collection rule was issued in October 2020 and focuses on communication use in debt collections. It defines prohibitions on abuse and harassment, false or misleading representations, and unfair practices by debt collectors.

Issued in December 2020, the second debt collection rule clarifies the disclosures that debt collectors must provide to consumers at the start of collection communications. It also requires collectors to take certain steps to disclose the existence of a debt to consumers before reporting to a consumer reporting agency. The rule prohibits debt collectors from threatening to sue consumers on time-barred debt.

Following publication in the Federal Register, the CFPB’s proposal will be open for comment for 30 days.