CFPB Announces Nov. 30 Effective Date For Regulation F

The Consumer Financial Protection Bureau announced today that Regulation F will go into effect on November 30 as originally planned and will not delay the effective date of the rule until January 2022.

“The CFPB has now determined that such an extension is unnecessary,” it said in a press release. “Following this announcement, the CFPB will publish a formal notice in the Federal Register withdrawing the April 2021 proposal.”

The CFPB had proposed delaying the effective date by 60 days to give companies in the accounts receivable management industry more time to prepare for the changes that need to be made. At the time it issued the proposal, the CFPB said the additional time was because of the COVID-19 pandemic. “The proposed delay would allow stakeholders affected by the pandemic additional time to review and implement the rules,” the CFPB stated in a release announcing the Notice of Proposed Rulemaking.

“Since the Debt Collection Final Rules were published, the global COVID-19 pandemic has continued to cause widespread societal disruption, with effects extending into 2021,” the CFPB said in the NPRM. “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. The Bureau believes that extending the rules’ effective date by 60 days, to January 29, 2022, may provide stakeholders with sufficient time for review and implementation.”

Trade groups, including RMA International and ACA International, opposed the proposal. Others suggested keeping the effective date the same, but delaying enforcement of the rule for 60 days.

The debt collection rule will overhaul how collectors communicate with consumers regarding unpaid debts. Along with explicitly allowing collections to communicate with consumers using text messaging and email, it offers collectors a model validation notice that can be used to communicate required disclosures with consumers.

The CFPB did mention in the release that it may “reconsider” the debt collection rules at a later date.

“The public comments generally did not support an extension,” the CFPB said in the release. “Most industry commenters stated that they would be prepared to comply with the final rules by November 30, 2021. Although consumer advocate commenters generally supported extending the effective date, they did not focus on whether additional time is needed to implement the rules. The alternative basis for an extension that many commenters urged, a reconsideration of the rules, was beyond the scope of the NPRM and could raise concerns under the Administrative Procedure Act. Nothing in this decision precludes the CFPB from reconsidering the debt collection rules at a later date.”

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