CFPB Releases Semiannual Report with Debt Collection Rule Timeline


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CFPB Director Kathy Kraninger will testify on report before House and Senate committees next week

7/23/2020 14:00

The Consumer Financial Protection Bureau released its semiannual report to Congress this month with an overview of key rulemakings and initiatives, including the final debt collection rule expected in October 2020.

The report covers the bureau’s work from Sept. 30, 2019, through March 31, 2020.

As it did in its spring rulemaking agenda, the CFPB notes in the semiannual report that the debt collection rule is expected to be finalized in October.

In May 2019, the bureau issued a notice of proposed rulemaking (NPRM), which would prescribe rules under Regulation F to govern the activities of debt collectors, as that term is defined under the FDCPA, according to the semiannual report. The bureau's proposal would, among other things, address communications in connection with debt collection; interpret and apply prohibitions on harassment or abuse, false or misleading representations, and unfair practices in debt collection; and clarify requirements for certain consumer-facing debt collection disclosures.

The CFPB has also engaged in testing of time-barred debt disclosures that were not addressed in the May 2019 proposal. In February 2020, after completing the testing, the bureau issued a supplemental NPRM related to time-barred debt disclosures, according to the report.

The CFPB will take final action on a Supplemental Notice of Proposed Rulemaking on out-of-statute debt disclosures at a later date, according to the rulemaking agenda. It extended the comment deadline on the SNPRM to Aug. 4, 2020, ACA International previously reported.

Meanwhile, the CFPB is also seeking comments on debt validation notice qualitative testing due July 29, 2020, according to a Federal Register notice .

The bureau is assessing the effectiveness and performance of its model debt collection validation notices and plans to conduct cognitive interviews as part of that process.

Other highlights from the semiannual report include:

The CFPB issued its final rule on Payday, Vehicle Title, and Certain High-Cost Installment Loans. The bureau issued this final rule in June 2019 to delay the Aug. 19, 2019, compliance date for the mandatory underwriting provisions of the regulation promulgated by the bureau in November 2017 governing Payday, Vehicle Title, and Certain High-Cost Installment Loans. Compliance with the provisions finalized in 2017 was delayed by 15 months to Nov. 19, 2020. The bureau also made certain corrections to address several clerical and non-substantive errors it identified in other aspects of the rule.

  • Report to Congress: Fair Debt Collection Practices Act Annual Report 2020. The bureau published its annual report summarizing activities along with those of the Federal Trade Commission to administer the Fair Debt Collection Practices Act. This year’s report describes activities conducted by the bureau and the FTC during 2019 in relation to debt collection. The bureau and the FTC work closely to coordinate debt collection enforcement actions among other matters related to debt collection.
  • Bureau Symposia Series. In April 2019, Kraninger announced a symposia series to explore consumer protection in today’s dynamic financial services marketplace. The series is aimed at stimulating a proactive and transparent dialogue to assist the bureau in its policy development process. The first symposium  on June 25, 2019, covered the Dodd-Frank Act’s prohibition on abusive acts or practices. The second symposium  on Sept. 19, 2019, covered behavioral law and economics. The third symposium on Nov. 6, 2019, covered Section 1071 of the Dodd-Frank Act. The fourth symposium  on Feb. 26, 2020, covered consumer access to financial records. The CFPB will hold a symposium on the use of cost-benefit analysis in consumer financial protection regulation at 9:30 a.m. EDT, Wednesday, July 29, 2020. The event will be webcast on the bureau’s website.

Read the complete Semiannual Report to Congress here.

The House Financial Services Committee will hear from Kraninger at 12:30 p.m. EDT Thursday, July 30, during “Protecting Consumers During the Pandemic? An Examination of the Consumer Financial Protection Bureau.”

The Senate Committee on Banking, Housing and Urban Affairs will hear testimony from Kraninger in a similar hearing at 10 a.m. EDT, Wednesday, July 29, titled, The Consumer Financial Protection Bureau’s Semiannual Report to Congress.

These hearings are a valuable opportunity for ACA to connect with members of Congress on behalf of the industry and shed light on legislation and regulatory matters impacting ARM professionals, especially as the CFPB moves forward on its proposed debt collection rule.

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