ACA’s Leah Dempsey, Trade Group Representatives Comment on Modernization in Pending CFPB Debt Collection Rule

Vice president and senior counsel of federal advocacy discusses contact with consumers regulated by the Fair Debt Collection Practices Act in interview with American Banker.

4/15/2019 11:00 AM

ACA’s Leah Dempsey, Trade Group Representatives Comment on Modernization in Pending CFPB Debt Collection Rule

With the Consumer Financial Protection Bureau’s proposed debt collection rule expected to be released in the coming weeks, industry stakeholders and trade group representatives, including ACA International's Vice President and Senior Counsel of Federal Advocacy Leah Dempsey, are discussing how debt collectors’ communication methods with consumers will be addressed.

American Banker reporter Kate Berry asked several experts about the rule, particularly about the inclusion of regulations on use of text messages and emails to contact consumers about a debt in an article titled “How Far Will CFPB go to Modernize Debt Collection Rules?” (A subscription may be required to access the article.)

In response to questions about interest group suggestions of a one or three call cap to consumers per week, Dempsey explained the protections are already present in the FDCPA. Dempsey noted that as a data-driven agency any new interventions from the CFPB should be backed by research and not data that is arbitrarily selected.

“We don’t believe there is a magic number” for how often a debt collector can contact a consumer,” Dempsey told Berry when asked about frequency of communication with consumers in the proposed rule. “We’re not saying people should be contacted an unlimited number of times. I think it really depends on what kind of data would support it and if there is quantitative research,” Dempsey said.

As noted in its spring 2018 rulemaking agenda, the bureau expects to issue a Notice of Proposed Rulemaking (NPRM) on debt collection, addressing issues including communication practices and consumer disclosures, by spring 2019, ACA International previously reported.

In American Banker, Berry reports, “the CFPB is expected to ask for input on the use of text and email in collecting debts, and how often collectors should be able to contact consumers. Consumer disclosures also are expected to be a centerpiece of the CFPB’s plan, which is likely to be broad and less prescriptive than past proposals.”

“They are going to be careful about having an open-ended notice to kick off the rulemaking, and they will gather all the data before coming out with a final rule,” said Quyen Truong, a partner at Stroock & Stroock & Lavan and a former CFPB assistant director and deputy general counsel, in the article. “In the long run, there likely will be attempts to use email and text because the industry and consumer groups have wanted to get more guidance as those become more convenient ways to reach consumers.”

Truong added that it is not expected for the CFPB’s proposed rule to limit frequency of consumer calls or contacts but “the CFPB under Republican leadership may leave open the possibility of putting additional restrictions on collectors.”

Read the complete American Banker article “How Far Will CFPB go to Modernize Debt Collection Rules?” (A subscription may be required.)

Related Content from ACA International:

BCFP Regulatory Agenda: Debt Collection Rule Remains on Deck for March 2019

CFPB, FTC Focus on Research, Legal Actions in Annual FDCPA Report to Congress

Debt Collection Complaints to CFPB Decline

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