CFPB Debt Collection Rule Resource Guide

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Section 1006.42 E-SIGN Act

The following perspective was provided by Loraine Lyons of Malone Frost Martin.

Under the CFPB’s new debt collection rule, written notices that require consumer’s E-Sign Consent are:  

1. Validation of Debt (VOD), *
2. Initial mini-Miranda disclosure, *
3. Post Date Notice, 
4. Providing Verification of Debt to consumer, and 
5. Providing Original Creditor information to consumer.  

   *If 1 and 2 are not the initial communication

Any notice communication outside of the 5 above can be sent by text or email without obtaining the consumer’s E-Sign consent. For example, with the consumer’s informal consent, follow up communications, responses to balance inquiries, settlement offer letters, payment receipts, etc. can be sent by text or email. (Check State law which might be more restrictive than the CFPB’s debt collection rule on electronic communications).

Although the VOD notice is a required notice, under the FDCPA, it may be provided in writing or orally in the initial communication. E-SIGN applies to legally required written notices. Therefore, E-SIGN’s consumer-consent requirements do not apply to the electronic delivery of the validation notice or mini-Miranda disclosure when it is contained in the initial communication. (See CFPB final rule, part 1, footnote 584, page 440).  

With respect to the post-date notice, it is a required document under the FDCPA and would require compliance with E-SIGN. It is noted the Bureau commented it did “not take a position on E-SIGN’s applicability to the [post-date] letter in this final rule” as it was unaware if the notice was currently being delivered electronically, or if it was, if there are compliance concerns. (See CFPB final rule, part 1, pages 425-426).