Today, the Consumer Financial Protection Bureau (“CFPB”) announced its long-awaited proposed rule to implement the Fair Debt Collection Practices Act (“FDCPA”). Spanning over 500 pages, the proposed rule seeks to expand the methods by which collectors may communicate with debtors while simultaneously providing additional consumer protections. Some of the proposed changes include:
Calling Limits: The proposed rule would limit a collector to seven call attempts and one conversation per week with the debtor.
Safe Harbor for Email & Text: The proposed rule would create a safe harbor for inadvertent third-party disclosure of a debt via email or text message if the collector follows specific procedures outlined in the proposed rule and gives the debtor an opt-out mechanism.
Communication Opt-Out: A debtor would be able to opt-out of specific communication channels, such as a specific telephone number or email address.
Limited-Content Message: The proposed rule provides language for a “limited-content message” that could be left on voicemail or sent by text message and would not be considered a “communication” for purposes of third-party disclosure.
Time-Barred Debt: A collector would not be allowed to sue or threaten to sue on debt the collector knows or should know is barred by the statute of limitations.
Communication Before Credit Reporting: A collector would be prohibited from reporting a debt to a consumer reporting agency until after it has already communicated with the debtor.
Validation Notice: The proposed rule provides a new model validation notice.
The proposed rule will be available for comment for 90 days after publication in the Federal Register and will be effective one year after publication of the final rule.
Additional analysis will be forthcoming as the M&S team processes this lengthy proposed rule.