This post follows up on our earlier “primer” and flash alert on the Consumer Financial Protection Bureau’s proposed rule (the proposal) to implement the Fair Debt Collection Practices Act, which the CFPB released with a Fact Sheet and a Table of Contents to the proposal. Below, we describe key details of the proposal, and provide further information from stakeholders and the CFPB that has become available since the proposal’s publication.
McGuireWoods also will host a free webinar on the proposal in the coming weeks; a date will be announced soon.
Comments on all aspects of the proposal are due 90 days after it appears in the Federal Register, which should be any day now.
I. Summary of Key Points
- The proposal would apply only to “debt collectors” as defined by the FDCPA. Importantly, owners of debt — even debt in default when purchased — would continue to fall outside the branch of the “debt collector” definition that covers those who regularly collect debts “owed or due, to another.” As a practical matter, this means that the only “first-party” collectors (i.e., collectors who own the debt) who would generally be regulated as “debt collectors” would continue to be those who operate a “business the principal purpose of which is the collection of debts.”
- Nonetheless, many of the proposal’s requirements regarding what is unfair, deceptive or abusive under the FDCPA likely would be viewed as informing the UDAAP/UDAP analysis that applies to every person collecting consumer debts.
- The proposal would regulate communications by debt collectors in several key ways. In particular, it would:
- cap at seven the number of telephone calls that debt collectors may place to consumers within a seven-day window about a particular debt;
- impose a waiting period of seven days after a debt collector has a telephone conversation with a person about a particular debt;
- permit unlimited electronic communications about a debt, but require a debt collector to include in any e-mail, text message or other electronic communication a clear and conspicuous statement describing a way for the consumer to “opt out” from receiving any further messages through that particular medium;
- prohibit communications about a debt via a workplace email addresses (with exceptions) and through public-facing social media platforms; and
- create an exception to communications limits and requirements for messages satisfying the definition of a new term, “limited content message.”
- The proposal would standardize the “debt-validation” disclosures to consumers long required by § 809 of the FDCPA.