Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36For more information, please visit or 24 25 What to Watch Notice of Proposed Rulemaking on FDCPA regulations | Continued scrutiny of student loan debt relief providers TELEPHONE CONSUMER PROTECTION ACT DEBT COLLECTION a contrary conclusion in Owens v. LVNV Funding LLC, holding that filing a proof of claim as to expired debt did not state a cognizable claim under the FDCPA. The Supreme Court case was argued in January 2017. CFPB Takes Next Step Toward New Comprehensive FDCPA Regulations. On July 28, 2016, the CFPB released an outline of proposals it is considering as part of the first significant update to the FDCPA since it was enacted in 1977. Among the dozens of potential rules being considered are those mandating substantiation of debt prior to collection efforts; imposing an ongoing duty on debt collectors to review collection files for “warning signs” and to ensure accurate and complete information; augmenting the debt validation notice to include more detailed information about the borrower, creditor, and debt; providing additional protections concerning time-barred debts and limiting certain types of communications with consumers. FTC Secures Settlements and Court Judgments as Part of “Operation Collection Protection” Actions. Last year, the FTC announced a new joint enforcement initiative with state attorneys general targeting debt collection companies, with the goal of bringing civil and criminal enforcement actions against debt collection companies engaged in illegal collection tactics. In addition to continuing to launch new enforcement actions, many actions initiated last year have culminated in settlements and judgments imposing stiff financial penalties and banning debt collectors from engaging in all collection activity. As just one example, on July 14, 2016 the FTC settled a case filed in October 2015 against five companies, including BAM Financial LLC, that allegedly collected debts using “intimidation, lies and other unlawful debt collection tactics,” securing a $4.8 million judgment and banning the companies from the business of debt collection. CFPB Enters Consent Order with Citibank Over Altering Affidavits. On February 22, 2016, the CFPB entered into a consent order with Citibank over its alleged practice of using law firms that altered debt collection affidavits after they had been executed by changing the date of execution or the balance owed on the debt. The CFPB acknowledged that Citibank immediately stopped referring debts to the law firms when it became aware of the false affidavits, and that in 2014 a New Jersey state court had already ordered Citibank to forgo collecting $34 million from affected consumers, and repay $11 million. While the CFPB did not impose additional financial penalties, the CFPB required Citibank to comply with these 2014 orders. CFPB Secures $28.5 Million from Navy Federal Credit Union for Alleged SCRA Violations. On October 11, the CFPB entered into a consent order with Navy Federal Credit Union, alleging that the company’s threats to take legal action were false and misleading because the company rarely pursued legal action against servicemembers. The CFPB also targeted more typical SCRA violations, such as threatening to contact servicemembers’ commanding officers and falsely representing the effect of delinquency. Looking Ahead to 2017 Now that the CFPB has outlined a set of possible amendments to FDCPA regulations, the next step is for the CFPB to issue a notice of proposed rulemak- ing identifying the specific amendments that the CFPB intends to adopt. The CFPB’s FDCPA Annual Report, published in March 2016, noted that the 85,200 debt collection complaints fielded by the Bureau in 2015 made debt collection the largest source of consumer complaints. Of these complaints, the largest category concerned complaints about debts that consumers purportedly did not owe, which makes it likely that the most onerous amendments geared toward debt val- idation will become final rules. It remains to be seen whether the DOJ, which became a surprise player in this sphere during 2016 with its SCRA-related actions, intends to become a more prominent long-term actor.