On October 30, 2020, at approximately 1:00 P.M. Eastern, the Consumer Financial Protection Bureau (CFPB) released the long-awaited final Debt Collection Rule (Rule). This Rule, amending Regulation F, 12 CFR Part 1006, was promulgated by the CFPB at the direction of Congress to implement the Fair Debt Collection Practices Act (FDCPA) and prescribe Federal rules governing the activities of debt collectors covered by the FDCPA. The Rule takes effect one year after the date of publication in the Federal Register and, among other things, addresses consumer communications providing clarity around the use of email and text messages and communication frequency. Issues surrounding the validation notice and disclosures — including time-barred debt disclosures — will be released in a future Rule.
This new Rule is the first body of regulations interpreting the FDCPA since it was passed in 1977. The Rule provides clarity in the law and modernizes the FDCPA by recognizing new communication channels, such as text and email, that will help consumers and bring collection communications into the 21st Century. For these reasons, the Rule has the potential to change the future of debt collection practices for consumers and debt collectors alike.
“This has been a long journey for all us. The release of this Rule is the culmination of many hours of work by RMAI’s Federal Regulatory & Legislative Committee, Board of Directors, consultants and staff. In addition to writing comments, our efforts have included multiple years of meetings with policy makers to provide insight on the collection industry,” said RMAI President, James Mastriani.
Originally introduced in 2013 under the directorship of Richard Cordray, the Rule has gone through a number of iterations. Additionally, the final Rule, issued under the directorship of Kathy Kraninger, represents the comments of literally thousands of individuals, companies, consumer groups and trade associations such as the Receivables Management International Association (RMAI). To review the comments submitted by RMAI on behalf of its membership, click below:
- RMAI’s September 17, 2019, Comments regarding the CFPB Debt Collection Rule
- RMAI’s July 31, 2020, Comments on the Supplemental Rule on Time-barred Debt Disclosures
RMAI will continue to work with the CFPB on issues not addressed in this Rule, but addressed in the Advanced Notice of Proposed Rulemaking such as transfer of debt information from original creditors to debt collectors and debt buyers, and information provided to consumers upon sale or placement of debt. RMAI will continue its advocacy work on these and other issues with the goal of improving the regulatory environment for its members and in support of fair and meaningful consumer protections.
So, what does this mean? In anticipation of the release of this new Rule, RMAI is at work preparing the following education and training events for members:
- The Election Results & The CFPB Rule: A Look Ahead at the Next Three Months — Attend RMAI’s webinar on Friday, November 6, 2020, at 9 AM Pacific / 11 AM Central / 12 PM Eastern. This webinar will be presented by Federal Legislative/Regulatory Counsel, Dan Crowley, K&L Gates; RMAI Treasurer, Anne Thomas, Cavalry Portfolio Services, LLC; and RMAI President, Jim Mastriani, Velocity Portfolio Group, Inc.
- RMAI Chief Compliance Officer Webinar Series — As soon as the experts have a chance to digest the contents of the Rule, RMAI will host a series of webinars for Chief Compliance Officers designed to take a deep dive into the various sections of the Rule from a compliance perspective. Presented by RMAI certified compliance officers, these webinars will provide members with an opportunity to bring their specific questions and challenges to the attention of the presenters as well as their peers for further discussion and practical take aways.
- RMAI 2021 Annual Conference — In February, RMAI will present six-hours of specialized, consecutive sessions covering the most challenging sections of the new Rule from a compliance and an operations perspective. These must-attend sessions will be presented in a live setting and via live stream by the leading legal and operations experts in the field at the Aria Hotel as a kickoff to the 2021 RMAI Annual Conference.
Finally, RMAI will continue to provide programming and resources to support members’ ability to comply with the Rule when it takes effect one year after the date of publication in the Federal Register, which is the date full compliance becomes mandatory. RMAI is also committed to seeking additional clarifications from the CFPB as our members begin to operationalize the Rule – both before and after the Rule’s effective date.
This alert is intended for members of the Receivables Management Association International and is for informational purposes only and is in no way intended to provide legal advice. Members are encouraged to consult with an attorney of their choice for legal advice concerning this matter.