The first comprehensive federal debt collection regulations interpreting the Fair Debt Collection Practices Act (FDCPA) take effect November 30, 2021. This article summarizes new Consumer Financial Protection Bureau (CFPB) Regulation F with links to free resources providing additional detail on the new regulations. New Regulation F provides new consumer rights but also is likely to lead to new consumer abuses. As with the FDCPA, the regulations apply to debt collectors as defined by the FDCPA, which generally includes debt collection agencies, collection attorneys, debt buyers, and mortgage servicers that obtained the account in default, and generally excludes original creditors.
Regulation F: Background and Key Provisions
The CFPB issued in two parts the rules amending Regulation F, 12 C.F.R. part 1006, implementing the FDCPA. Part one focuses on communications. See 85 Fed. Reg. 76,735 (Nov. 30, 2020). Part two focuses on disclosures. See 86 Fed. Reg. 5766 (Jan. 19, 2021).
The CFPB confirmed that both parts of the regulations take effect on November 30, 2021, after withdrawing a proposed delay in the effective date. See 86 Fed. Reg. 48,918 (Sept. 1, 2021).
Significant provisions of Regulation F:
- • Set out a presumption that a certain number of calls per week is or is not an FDCPA violation (with factors that can rebut those presumptions);
- • Permit certain use of electronic communications to provide disclosures required under the FDCPA or to collect a debt;
- • Give consumers the right to stop specific types of communications;
- • Require notice of the right to opt out of electronic communications;
- • Provide a safe harbor from FDCPA liability for third-party disclosures when communicating with a consumer by email or text message where the email address or phone number were obtained using specified methods;
- • Exclude certain limited debt collector voicemail messages left for consumers from some FDCPA requirements;
- • Set out an expanded list of information that a debt collector must provide to a consumer at the outset of debt collection communications;
- • Provide a model notice containing such information;
- • Prohibit debt collectors from bringing or threatening to bring a legal action against a consumer to collect a time-barred debt; and
- • Require debt collectors to take certain actions before furnishing information about a consumer’s alleged debt to a consumer reporting agency.
New Rights for Consumers
Some aspects of Regulation F will provide additional protections to consumers with alleged debts in collection. The list below highlights some beneficial aspects of the new regulations, although some of these provisions still have significant flaws.
- • Ability to Stop Collection Calls: If a consumer requests that a collector stop using a particular method of communication (e.g., all phone calls or calls or texts), the collector must stop using that specific means of communication. The consumer’s request can be made orally.
- • Preconditions to Any Collector Credit Reporting: A debt collector must speak to a consumer or send a letter or electronic message about an alleged debt before reporting the account to a credit bureau. While there are still concerns about some consumers not receiving this notice, this change will decrease the likelihood that the consumer first learns about an alleged debt when they try to access credit to buy a car or home, or an employer does a credit check for a new job.
- • Limits on the Frequency of Collection Conversations: Collectors will generally have to wait a week after speaking to a consumer before placing another call about that account. Unfortunately, as discussed below, these limits are per debt, meaning that the collector could continue to contact the same consumer about other accounts if there are multiple accounts placed for collection with that collector.
- • Expanded Information on Required Debt Collection Notices: Collectors will have to expand the information that they provide to consumers when they provide a validation notice, which may make it easier for the consumer to identify the alleged debt or exercise their debt collection rights. Unfortunately, some of the information and aspects of the design of the model validation notice are still likely to be unclear to many consumers.
Many Areas of Concern Remain for Consumers
Unfortunately, some of the practices authorized by the rules may be used to harm consumers. The list below highlights some of the harmful conduct that will be permitted under the new rules.
- • Excessive Phone Calls: Collectors can harass consumers by making up to seven attempted calls per week per debt, either to the consumer or to friends and family to ask for the consumer’s contact information. A consumer with five medical accounts in collection could receive thirty-five attempted calls per week.
- • Electronic Notices to Consumers Are Now Allowed: The CFPB has said that collectors can provide required validation notices electronically in initial communications without complying with the federal E-SIGN Act. This will make it more likely that consumers will not receive these notices and more difficult for those whose primary internet access is a smartphone to read, understand, print, and save notices if they do receive them.
- • Oral Notices to Consumers Are Now Allowed: Collectors can provide validation information orally in an initial communication despite the large volume of information required to be disclosed in the notice.
- • Required Notices to Consumers Need Not Be in the Language Used in the Collection Contact: Collectors are not required to provide validation notices in Spanish or other languages, even when the collector has already communicated with the consumer in a non-English language or otherwise has information about the consumer’s language preference.
- • Electronic Collection Communication Allowed Without Consumer Consent: Collectors can use emails and other electronic communications to contact consumers unless the consumer opts out. Requiring an opt-out rather than requiring collectors to obtain consumer consent is more likely to result in missed messages, i.e., if collectors use old contact information or communications are sent to spam. Privacy may also be violated if messages are viewed by others, including employers. Procedures to reduce third-party disclosures are optional.
- • Time-Barred Debt Collection: Collectors can still pressure consumers to pay debts that are beyond the statute of limitations. They are prohibited from suing or threatening to sue on time-barred consumer debts, but, in some states, they can still sue if a consumer inadvertently revives the statute of limitations through a partial payment or acknowledgment made after pressure from collectors.
- • Decedent Debt: Collectors can communicate with a wide variety of grieving people about debts owed by the deceased and, in most cases, will not have to provide validation notices or respond to disputes.
Free CFPB Resources on New Regulation F
Below is an annotated list of free resources that CFPB provides to help practitioners understand the new FDCPA Regulation F, with links to each resource:
- • Interactive Regulations: This online version of the regulations puts the official interpretations of the rules next to the relevant text of the regulations. Make sure that you are looking at the CFPB version of Regulation F that becomes effective November 30, 2021.
- • Federal Register Notices Explaining the Rules (Part 1 and Part 2): Regulation F was published in two parts. Note that Part 2 amends sections of the regulations that were released in Part 1. In addition to containing the regulations and official interpretations, the Federal Register notices also contain the CFPB’s discussion of each section.
- • Small Entity Compliance Guide: This guide provides a detailed, 116-page overview of Regulation F.
- • Executive Summaries (Part 1 and Part 2): Each document provides a 10-page overview of the contents of the debt collection regulations.
- • Model Validation Notice: This webpage contains links to PDF, Word, and InDesign versions of the model validation notice.
- • Regulation Inquiries: This webpage allows users to submit a question about Regulation F directly to the CFPB.
- • Frequently Asked Questions: This webpage addresses questions regarding compliance with Regulation F.
Other Free Resources on New Regulation F
- • NCLC webinars (Part 1) and (Part 2): These free, hour-long webinars provide a concise overview of the contents of the debt collection rules.
- • National Association of Consumer Advocates webinar: This presentation by three members of the CFPB’s Office of Regulations, titled Demystifying Communications Under the New FDCPA Regulations, is available to consumer advocates (non-members must be screened).
- • AccountsRecovery.net webinars: This free collection industry resource provides numerous short videos about different parts of the debt collection rule.
NCLC’s Two-Volume Fair Debt Collection Treatise
NCLC’s Fair Debt Collection (Ninth Edition) is the definitive, two volume treatise (1774 pages) covering all aspects of the FDCPA, as well as state statutory protections, tort law claims, the relation of the Bankruptcy Code to debt collection, and over ten other applicable federal laws (including the Telephone Consumer Protection Act, Fair Credit Reporting Act, and Fraudulent or Defamatory Use of the Mails). Available both in print and digitally, of special note are over 15,000 case summaries of FDCPA court decisions. Pinpoint access to these 15,000 case summaries is provided by NCLC’s digital FDCPA Case Connector, allowing immediate access to relevant summaries based upon the user’s selections from any combination of court, topic, year, citation, party name, and keyword.
NCLC’s Fair Debt Collection is undergoing its largest overhaul in over thirty years, not only including detailed analysis of Regulation F, but with extensive reorganization and rewriting to make the treatise even more valuable for today’s fair debt collection litigation. NCLC is aiming to have a digital version, with analysis of the new Regulation F integrated into all chapters, available prior to or shortly after the November 30, 2021, effective date. A revised print edition will follow some months later, at no charge to those with an active print and digital subscription.