The CFPB’s Proposed Debt Collection Rules and The Impact on First-Party Collectors

On May 7, 2019, the Consumer Financial Protection Bureau (“Bureau” or “CFPB”) issued a Notice of Proposed Rulemaking (“NPRM”) to implement the Fair Debt Collection Practices Act (“FDCPA”).  The full NPRM is 538 pages and can be found here.  Among other things, the proposal attempts to set limits on the number of calls that debt collectors may place on a weekly basis, clarify how collectors may communicate using new technologies and require collectors to provide additional information to consumers to help them identify debts.   The Bureau has set a deadline of Monday, August 19, 2019, for the receipt of all comments related to the NPRM.

On its face, the NPRM only applies to FDCPA-covered debt collectors; however, the proposal will certainly impact the compliance efforts and litigation strategy of first-party collectors.  The NPRM specifically states that the Bureau has authority to prescribe rules for first-party collectors who are “engaged in offering or providing a consumer financial product or service,” which would include persons “collecting debt related to any consumer financial product or service.”  The NPRM also states that “covered persons” under the Dodd-Frank Act would include many FDCPA-covered debt collectors, “as well as many creditors and their servicers, who are collecting debt related to a consumer financial product or service.”

This memorandum summarizes the major provisions of the NPRM and also provides context for how the Bureau decided to issue these proposals and also how it decided to avoid directly addressing first-party collections.  The memorandum then addresses potential problem-areas created by the NPRM for first-party collectors and presents questions that should be asked when evaluating whether compliance and litigation strategy changes are necessary.


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