CFPB Adopts Rule Changes on Debt Collection Practices

The CFPB (or the "Bureau") issued a final rule amending Regulation F ("Fair Debt Collection Practices Act") to clarify certain restrictions and address predatory debt collection practices.

The final rule:

• requires debt collectors to send disclosures to consumers with debt information, such as itemizations of debt, and guidance on how consumers can respond to collection communication;

• allows emails, text messages and other new communication technologies to be used in collection communications;

• provides a compliance safe harbor to debt collectors, using the model validation notice or certain variations of the notice, from these disclosure requirements;

• bars a debt collector from furnishing consumer debit information to a reporting agency prior to certain outreaches to the consumer regarding the debt; and

• prohibits a debt collector from suing or threatening to sue a consumer if the statute of limitations has expired.

Unlike the proposed rule (see previous coverage), the final rule does not impose disclosure requirements on debt collectors attempting to collect "time-barred debt" (i.e., debts for which the relevant statute of limitations has expired).

The final rule will go into effect on November 30, 2021.