CORRECTED: CFPB Expects Final Debt Collection Rule in 2020

CORRECTION: An earlier version of this story incorrectly identified the timeline for the release of a final rule. The agency did not indicate that the final rule would be released in May 2020. I apologize for the error.

The Consumer Financial Protection Bureau re-affirmed its guidance of taking “final action” with respect to its debt collection rule in 2020, according to the agency’s semi-annual regulatory agenda, which it released late last week.

[EDITOR’S NOTE: Have you signed up for the webinar on Monday, Nov. 25 “An Update From The CFPB About The Proposed Debt Collection Rule,” sponsored by VoApps? You can sign up by clicking here.]

The timeframe coincides with an agency-wide mandate to finalize proposed rules within a nine-month window after a proposed rule’s comment period closes. The proposed debt collection rule’s comment period closed in September.

Along with its proposed debt collection rule, the CFPB also mentioned that it is testing consumer disclosures related to the collection of time-barred debts. Once the tests are concluded, the CFPB said it will determine whether it needs to issue a separate notice of proposed rulemaking to solicit public comments related to how to collect on debts where the statutes of limitation have expired.

Along with updating its progress on the proposed debt collection rule, the rulemaking agenda provided updates on a number of other activities, including proposed rules related to high-cost loans, including payday and title loans.

On the CFPB’s long-term horizon is a possible rule related to defining the term “abusive” practices under the “Unfair, Deceptive, and Abusive Acts or Practices,” more commonly known as UDAAP violations. In the past, UDAP has only meant unfair or deceptive acts, and did not include the word “abusive.” It was only in the enactment of the Dodd-Frank Act, which is how the CFPB was created, that “abusive” was added to UDAAP.

“While statutory language, regulations, policy statements, and case law have provided important clarifications as to the meaning of unfairness and deception under federal consumer protection law over several decades, the Dodd-Frank Act was the first federal law to define and prohibit abusive acts and practices with respect to consumer financial products and services generally,” the CFPB noted in its report. “The Bureau is considering whether rulemaking or other activities such as a policy statement may be helpful to further clarify the meaning of abusive acts or practices under section 1031 of the Dodd-Frank Act.”

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