On September 13, 2018, a House of Representatives committee ordered a report to the full chamber regarding H.R. 5334, also known as the Give Useful Information to Define Effective Compliance Act (GUIDE Compliance Act or Act). The bill was introduced to the house on April 17, 2018, by Rep. Sean Duffy (R-WI) and Rep. Ed Perlmutter (D-CO) and referred to the Committee on Financial Services.

The proposed Act would require the Director of the Bureau of Consumer Financial Protection (BCFP or Bureau) to “issue guidance” in order to facilitate compliance with federal consumer financial protection laws. The proposed Act would also provide safe harbor to those who follow the guidance from the Bureau in good faith.

The new bill has a 12% chance of being enacted according to govtrack.us.

insideARM Perspective

The new bill would require the Bureau to do what the ARM industry has been requesting for some time now: to provide guidance on how to comply with consumer protection laws in the modern age.

Since Congress enacted the FDCPA, the world has evolved in many ways. Technology opened up many modes of communication that could not have been anticipated at the time the FDCPA was written. Additionally, many plaintiffs’ attorneys have taken advantage of the vagueness of the FDCPA by filing high volumes of litigation on technicalities that the FDCPA does not address.

The Bureau took steps forward with rulemaking by issuing an outline of proposed debt collection rules, however the rulemaking efforts have hit several roadbumps since then. Of note, the outline was issued in July 2016, which is over two years ago. In its most recent rulemaking update, the Bureau pushed the debt collection rules to 2019.

What will occur first: the passing of the bill or the release of the debt collection rules? Considering the low chance of the bill passing, the rules will likely win. But it seems that Congress is starting to take note of what the industry has known all along: there is a need for clear guidance from the Bureau.


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