We’re halfway through the series on the CFPB’s final debt collection rule. Is your head spinning yet? We’ve curated a few important tidbits for you. Registration is available for the remainder of the series as well as recordings and slide presentations. Editor’s note: This article is available for members only.
11/11/2020 12:00
ACA International was ready for the Consumer Financial Protection Bureau’s final debt collection rule almost since the bureau was established, and this year focused its regulatory advocacy efforts on ensuring the industry’s voice was heard on how it would impact the accounts receivable management (ARM) industry and consumers.
The 600+ page final rule is here now, and a second part on disclosures and validation notices is due for release by the end of the year.
Since the Oct. 30 release of part one, ACA’s staff and members have been analyzing the rule and presenting details on its components in the ACA Huddle CFPB Rule Series, which wraps up next week. Registration for the complimentary series is still available as well as recordings and slide presentations.
Here are a few takeaways from the webinars so far:
Ready, Set…Go!: Everything You Need to Know About the CFPB's New Debt Collection Rule
ACA’s advocacy shows in the final rule and this is most clearly seen in a comparison of ACA’s comments on the proposed rule and what is included in the final version, available here in a handy chart. The first webinar covered clarity on limited content voicemails (LCVM), email and text messages and use of consumers’ work email, among other topics.
Takeaway: Critically, the company name left in the LCVM must not indicate that the caller is in the debt collection business. As a result, some agencies may need to establish appropriate registered trade names in jurisdictions in which they intend to leave LCVMs.
Limited Content Voicemail Message and Call Frequency
Part two of the Huddle webinar series included examples of limited content voicemail messages and a discussion on call frequency, safe harbors, how other federal and state laws apply to the CFPB rule, record retention and more.
Takeaway: Members need to be aware that the LCVM opportunities may be limited by more restrictive state laws, meaning that in some circumstances debt collectors may not be able to leave LCVMs.
Validation Notices
Unlike the CFPB’s proposed rule, the final rule does not contain a safe harbor for provision of the validation notice in the body of an email that is the initial communication with a consumer, which is covered in part three of the Huddle webinar series.
Takeaway: Email validation notices may be sent electronically, but the ARM industry is awaiting decisions on a sample validation notice and alternative procedures to the E-SIGN Act for providing certain disclosures electronically that are expected to be addressed in part two of the bureau’s rule.
Electronic Communication Disclosures
Consumer preference and the use of modern communications addressed in part one of the final debt collection rule dominated discussion in the fourth part of the webinar series. Speakers reviewed the rule’s provisions on email, social media communications, reinforcement of letter communications and what members need to balance to remain compliant with the Telephone Consumer Protection Act.
Takeaway: Part one of the CFPB rule provides new clarity on Fair Debt Collection Practices Act guardrails as they apply to more modern versions of communications. Train your collectors to listen carefully for consumers’ communication preferences.
Deep Dive on Collection Practices
As ACA and the ARM industry wait for the bureau’s final debt collection rule to be published in the Federal Register—which is when a compliance date will be announced—there are debt collection practices that can be reviewed and perhaps changed in preparation for the requirements.
Takeaway: Focus on the definition of “attempt to communicate” vs. the definition of “communicate” in the rule, employment verification for consumers, limited-content voicemail messages, location information, call frequency limits and making sure to comply with requirements when identifying your business.
Credit Reporting
Credit reporting is likely another topic that will be addressed more in-depth in part two of the CFPB’s rule.
Takeaway: Credit reporting was addressed in the proposed rule in 2019, but the CFPB has not issued its final word about delaying credit reporting for a certain amount of time while a consumer is notified their account will be sent to a consumer reporting agency (CRA). The proposed rule states: “A debt collector must not furnish information regarding a debt to a CRA before communicating with the consumer about the debt.”
ACA Huddle CFPB Rule Series Webinars Continue
On Thursday, Nov. 12, Tamar Yudenfreund, senior director, public policy, Encore Capital Group, Jack Brown III, president, Gulf Coast Collection Bureau Inc., and Courtney Reynaud, president, Creditors Bureau USA, will share their insights on the impact of the rule on small, medium and large-size businesses and next steps for compliance.
On Friday, Nov. 13, Andrew Madden, ACA’s vice president, state government and unit affairs, will lead a discussion with state regulators on how the rule interacts with state laws.
Thank you to the sponsors of the ACA Huddle series: Hinshaw & Culberston LLP, Ontario Systems, RevSpring Inc. and Venable LLP.