Section 1006.42 E-SIGN Act
The following perspective was provided by David Schultz of Hinshaw & Culbertson.
The application of the E-SIGN Act, 15 U.S.C. 7001(c), to the FDCPA has been the subject of much discussion, some litigation, and extensive analysis as part of the Notice of Proposed Rule Making process. When the CFPB issued its lengthy Rule on October, 30, 2020, E-SIGN was referenced but only in a fairly narrow way.
Section 1006.42 is captioned “Sending required disclosures.” Its subsection (b) provides:
(b) Requirements for certain disclosures sent electronically. To comply with paragraph (a) of this section, a debt collector who sends the notice required by FDCPA section 809(a), as implemented by Bureau regulation, or the disclosures described in § 1006.38(c) or (d)(2)(i), electronically must do so in accordance with section 101(c) of the Electronic Signatures in Global and National Commerce Act (E-SIGN Act) (15 U.S.C. 7001(c))
What does this mean? The FDCPA states that some things must be done in writing. This subsection identifies three such requirements and says that those may be done electronically if the collector complies with E-Sign. First is section 809(a) (also referred to as 1692g), which requires sending a written validation notice. Second is section 1006.38(c), which requires a collector to send in writing creditor information if requested by a consumer in response to the validation notice. Third is section 1006.38(d)(2)(i), which requires a collector to send in writing validation information if requested by a consumer in response to the validation notice.
It is helpful that the CFPB clarified how these communications may be sent. The December Rule is supposed to address certain disclosures. It thus is possible that the December Rule will address in more detail the application of E-SIGN to the FDCPA. Certainly, the more clarity on these issues the CFPB provides, the better it is for the industry.