ACA International’s comments outline the need for a phased approach to compliance with Reg F and clarity for the CFPB’s reasoning to propose delaying the effective date for two months.
5/7/2021 9:00
About a month ago, the Consumer Financial Protection Bureau proposed delaying the effective date of the final debt collection rule (Regulation F) from Nov. 30, 2021, to Jan. 29, 2022.
In its proposal the CFPB states that it proposed the extension in response to the ongoing “societal disruption” caused by the global COVID-19 pandemic and to allow stakeholders additional time to review and implement the rule.
“ACA appreciates that the CFPB understands that the rule imposes significant compliance burdens for the accounts receivable management (ARM) industry, however, we do not think 60 days will make a material difference in alleviating those burdens,” said Leah Dempsey, ACA’s vice president and senior counsel of federal advocacy, in comments to the CFPB. “Instead, a phased implementation and enforcement discretion would be more reasonable and appropriate way to address these concerns.”
The CFPB has not indicated it will use the time to address compliance complexities identified by ACA members in comments on Reg F.
“It is unlikely this brief extension will have a meaningful impact on allowing companies to understand and implement the final debt collection rule,” Dempsey said. “To address implementation concerns due to time and resource constraints, we urge the CFPB to commit to not engage in enforcement activity in relation to the rule for an additional six months to a year after the implementation date.”
Dempsey also noted in the comments that the CFPB has made conflicting statements about its reasoning for delaying the effective date of Reg F.
The stated purpose of extending the compliance deadline for Reg F is in response to “societal disruption caused by the global COVID-19 pandemic.”
However, in rescinding a policy statement regarding the Fair Credit Reporting Act that directly impacts the ARM industry by providing flexibility related to COVID-19, the bureau seems to take a differing view, stating:
“The bureau has concluded that since release of this statement such circumstances have changed. Since March 2020 and over the course of the COVID-19 pandemic, consumer reporting agencies and furnishers have adjusted operations by, for example, shifting to a remote mode of operation. As states and other jurisdictions have rescinded and modified stay-at-home orders over the course of the pandemic, the bureau has learned that many entities have resumed some level of in-person operations and, in many instances combined with more robust remote capabilities, have demonstrated improved business continuity.”
“Absent an additional explanation from the CFPB about why the pandemic should result in flexibility in some regard, but not in other instances, ACA questions whether there are other motivations in changing the compliance deadline,” Dempsey said.
Read ACA’s complete comments to the CFPB here.