Earlier this month the Consumer Financial Protection Bureau (CFPB) very quietly revised its Debt Collection Examination Procedure. While much of the exam manual remained the same, the updated version incorporates Reg F.
Here is a non-exhaustive list of the new topics covered in the exam procedure:
- Communicating via emails/text messages (Page 11- Module 2, question 2)
- Communicating through social media (Page 11- Module 2, question 3)
- The limited content message (Page 12- Module 2, question 9)
- Inconvenience as defined in Reg F (Page 13- Module 2, question 12a)
- Call frequency (Page 15 - Module 2, question 15)
- Representations to consumers regarding credit scores (Page 17- Module 2, question 21)
- Debt parking (Page 23- Module 3, question 10)
- The model validation notice (Page 27- Module 4- question 1-8)
- Opt-outs (Page 31, Module 4, question 12, 13)
Worth noting- Affiliates and third-party section
The affiliates and third-party relationships section of the exam manual can be found on page 6. This section does not limit the type of affiliates or third-party agents debt collectors can use. Instead, the updated exam procedure remains largely the same as the previous procedure. During the course of an exam, the CFPB will look at whether the debt collector:
- Reviews the provider's policies and procedures
- Provides clear expectations that the service provider follows applicable law
- Establishes internal controls
- Takes prompt action to address problems
Reg F went into effect on November 30, 2021. Releasing the updated exam procedure is a good indication from the CFPB that they expect debt collectors to have concluded all of their Reg F implementations. We've been trying to stress the importance of a risk and gap analysis; this release makes it clear the time is now. ARM entities should review the exam procedure to make sure they have covered everything the CFPB expects them to have covered.
It's also worth noting that despite the ongoing Hunstein saga, the CFPB did not limit its questions regarding service providers to only those specifically mentioned in the FDCPA. Instead, the exam procedure seems to solidify what everyone pre-Hunstein already knew- using vendors isn't a violation of the FDCPA.
Want to find the gaps in your CMS before the regulators (or consumer attorneys) do? Find out how to get started on a thorough risk and gap assessment AND get the details on the CFPB's exam procedure revisions this Wednesday, March 16th at 2pm with, A Complete Guide to Risk and Gap Assessments, a free webinar from Research Assistant and insideARM.