Experts React to Regulation F Delay

Last week, the Consumer Financial Protection Bureau announced it was seeking to delay the enactment of Regulation F, the debt collection rule, for two months. The CFPB said it was seeking the delay to giver companies more time to comply because of the COVID-19 pandemic. reached out to legal and compliance experts from around the country to ask for their reaction to this development and how companies in the accounts receivable management industry should react. Here is what they said.

What is your reaction to the CFPB seeking to delay the effective date of Reg F?


Either the CFPB is sincerely providing businesses with additional time to adjust to implementing the new Rule, or it is a red-herring designed to give the CFPB more time to attempt to circumvent the new Rule with additional Rulemaking in the intervening time. Companies should presume the CFPB is being forthright, but do not be surprised if a curveball comes our way in mid-to-late July.


COVID-19 affected everyone, industry members included. For some, the pandemic affected operations in ways none of us could have anticipated, and it will take time for all of us to find our new “normal.” I view the CFPB’s proposal to extend the effective date of the new rules as an acknowledgement that industry members are no different from other businesses whose worlds were upended by COVID-19 —we’ve all gone through an unprecedented event, and need additional time to thoroughly and properly review and implement the new standards to which the industry will now be held. I also view the Bureau’s proposal as a sign that these rules are genuinely intended to simultaneously give consumers protection from unscrupulous actors while providing the industry a solid framework within which to function. Put another way, the Bureau wants us to get it right, and is willing to give us extra time to make sure we can.


I am not aware of any industry requests for an extension. Instead, the only extension request I am aware of came from a group of consumer advocates so I am puzzled by the CFPB’s decision to seek comment on whether to grant the industry two additional months to comply with Regulation F. Rather than an additional two months for compliance, what the industry really needs is for the CFPB to respond to some of the questions that various industry groups have shared over the past few months, along the lines with what the NYC DCA did in connection with implementing its 2020 LEP rules, But that is not what I understand the request for comment to seek.


Since I have been warning clients since November that we thought there was a good chance of a delay in implementation, I can’t claim to be surprised. The problem is that Reg. F implementation is not simple. My team believe that it would have been necessary to be ready to go before the end of Q3 in order to leave enough time to test adequately for the original implementation date.

The delay is not the problem. It is the possibility of significant changes that concerns me. So many pieces of compliance are so interconnected that any changes will require a new round of 360 degree testing. I think there is a real possibility that it may be necessary to focus on implementing the prohibitive provisions of the Reg by the implementation date and be prepared for the disappointment of not getting to roll out the permissive provisions at the same time.


I do not believe the Bureau is being candid when it says its reason for proposing to extend the effective date of Regulation F is due to the pandemic. A week earlier it rescinded seven policy statements made in 2020 that provided temporary flexibilities to certain covered entities during the pandemic. Acting Director Dave Uejio said the Bureau was rescinding those statements because “[w]e are now over a year into the disruptive and deadly COVID-19 crisis . . . Because many financial institutions have developed more robust remote capabilities and demonstrated improved operations, it is no longer prudent to maintain these flexibilities.” Six days later, the Bureau proposes to give covered entities more flexibility by extending the effective date for Reg. F and says “the global COVID-19 pandemic has continued to cause widespread societal disruption, with effects extending into 2021. In light of that disruption, the Bureau believes that providing additional time for stakeholders to review and, if applicable, to implement the final rules may be warranted.” Both statements cannot be true. This mixed-messaging is troublesome and I hope that this extension is not being proposed only to give the Bureau additional time to rush through some revisions to Reg. F, but it is looking that way. But even if the effective date is not extended, I expect Reg. F revisions are already in the works.


Rulemaking is a deliberative process and now the CFPB has put out an Notice of Proposed Rulemaking (NPRM) about a prior final rule. Notice and comment are part of the public record and can be used later on to challenge a rule and to provide support for the CFPB to pivot from prior initiatives and priorities. This is exactly what happened with the Payday Rule. The Bureau has said that in light of the pandemic, “providing additional time for stakeholders to review and, if applicable, to implement the final rules may be warranted.” The Bureau believes that extending the rules’ effective date by 60 days, to Jan. 29, 2022, may provide stakeholders with sufficient time for review and implementation. The Bureau requests comment on whether to extend the final rules’ effective date and, if so, whether 60 days is the appropriate amount of time for an extension.” Is the Bureau really looking for industry’s perspective about a delay of sixty (60) days or does this NPRM provide opponents of the rule an opportunity to get their objections formalized into the public record? I believe it’s the later and for that reasons I am very concerned about this NPRM. I am not aware of any wholesale industry opposition to the implementation date. Therefore it is imperative that industry not only comment but support the implementation of Reg F in its current form.

I am a firm believer that industry should continue to prepare Reg F regardless of when that date comes. There are essential consumer protections and best practices that are baked into the rule that would, in my opinion, create a better consumer experience as well as elevate and improve the industry. In my opinion, stay the course.


On April 7, the Consumer Financial Protection Bureau proposed extending the effective date of two recent revisions to Regulation F of the Fair Debt Collections Practices Act until January 29, 2022. The new regulations, which were set to go into effect on November 30, are intended to: (a) clarify the rules concerning debt collection communications, including communications by text and e-mail; (b) revise the disclosures that must be provided at the beginning of collection communications; and (c) prohibit initiating or threatening to initiate suit on time-barred debts.

The extension, which was proposed because of the continuing effects of the COVID-19 pandemic, is highly appropriate under the circumstances and will give debt collectors the additional time needed to ensure that they are in full compliance. Moreover, there are still questions about what full and complete compliance looks like, and many are hoping that the CFPB will provide more guidance in the short term.


The purpose of the CFPB proposal to delay the effective date of Regulation F is to allow the collection industry additional time to prepare for the implementation of the new rules, but the CFPB clearly states that delaying the implementation would also delay any safe harbors provided for in the new rules. The original implementation date of November 2021 gave the industry just under a year to make any necessary changes to comply with the rule, and collectors are making changes to be able to comply before the rule goes into effect. It seems that the benefit of the safe harbors would outweigh any extension of time to comply, and the clarification provided in Regulation F has been long-awaited by the industry. There is a great amount of analysis and guidance of the requirements of the new rules being offered by leaders in the collection industry through webinars and articles. The benefits Regulation F will offer the industry far outweigh a two month delay of implementation to comply.

How should companies adjust their plans to make the necessary arrangements in order to comply with Reg F?


Stay the course. Companies should not adjust their plans to take steps to implement changes necessary to assure compliance with Reg F. The additional time may afford more opportunities to collection agencies to visit with clients, do additional testing of systems changes, and spend more time training and preparing customer-facing staff for recognizing instances in which consumers seek to express communication preferences or change them.

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