Alert November 12, 2013

CFPB Issues Advance Notice of Proposed Rulemaking on Debt Collection Rules

The CFPB published an advance notice of proposed rulemaking on debt collection rules. As part of the Dodd-Frank Act, the CFPB was given authority to issue rules for debt collection under the FDCPA, which had not authorized any agency to make any substantive rules following its enactment in 1977. Under the Dodd-Frank Act, the CFPB was also given the authority to issue regulations related to unfair, deceptive or abusive acts or practices in connection with consumer financial products or services. The CFPB is seeking information to help with the development of rules for creditors, debt buyers, and third-party collectors when transferring information related to debt when debts are sold or placed for collection with third parties, the content, form and delivery of validation notices under the FDCPA, and communications with debtors given advances in communication technology (e.g., social media and smartphones). For example, the CFPB is seeking comment on what additional information should be included in validation notices to help consumers recognize whether the debts being collected are owed by them and what potential privacy, security or other risks of harm to consumers may arise from use of technology. The CFPB is also seeking comment on the prohibition in the FDPCA on contacting debtors at unusual or inconvenient times. The CFPB noted that the advent of mobile phones “complicates the determination of what times are unusual or inconvenient.” Of import, the CFPB is seeking comment on whether it should use its rulemaking authority to establish new requirements and limitations on originating creditors and those creditors collecting their own debt.  Comments are due by February 10, 2014.