As promised, the CFPB released the second part of its FDCPA rulemaking covering debt validation notices, collection of time-barred debts, and certain credit reporting restrictions. As with the first rulemaking, these changes could require significant changes to a company’s policies and procedures as well as significant technology upgrades. Whether you are a third-party debt collector whose entire business will be subject to the rule, a loan servicer who is only considered a debt collector for certain loans, or a first party creditor interested in establishing best practices based off of the CFPB’s guidance, join us to learn more about how these additional restrictions and obligations will impact your business.
1. The CFPB’s second debt collection final rule, which is set to go into effect on November 30, 2021, covers three main topics: debt validation, time-barred debts, and credit reporting restrictions.
2. Multiple aspects of the final rule are likely to pose operational challenges, and entities subject to the rule should begin planning accordingly.
3. The rule imposes a strict liability standard prohibiting debt collectors from threatening to file suit, and from actually filing suit, on time-barred debts.
4. The CFPB included a model debt validation notice form that can be used as a safe harbor to comply with the validation information requirements.
5. The rule prohibits a debt collector from engaging in what is commonly referred to as debt parking or passive collections.