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.
- 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.
- Multiple aspects of the final rule are likely to pose operational challenges, and entities subject to the rule should begin planning accordingly.
- The rule imposes a strict liability standard prohibiting debt collectors from threatening to file suit, and from actually filing suit, on time-barred debts.
- The CFPB included a model debt validation notice form that can be used as a safe harbor to comply with the validation information requirements.
- The rule prohibits a debt collector from engaging in what is commonly referred to as debt parking or passive collections.