In a speech at the Bipartisan Policy Center (full remarks in that link), Director Kathleen Kraninger provided an outline of her vision for the Consumer Financial Protection Bureau (CFPB and Bureau). The speech provides a glimpse into what the Bureau's forthcoming debt collection rules will look like.
The Bureau will propose clarifying rules to better enable the use of modern communications technology in collections activity. The proposed rules also would protect consumers with clear, bright-line limits on the number of calls they may receive from debt collectors on a weekly basis. We will propose to provide clarity on how collectors may communicate via newer technology such as email or text messages. We will propose that collectors provide consumers with more and better information at the outset of collection to help them identify debts and understand their options, including their rights in disputing debts or paying them. As the CFPB moves to modernize the legal regime for debt collection, we are keenly interested in the views of stakeholders and look forward to engagement with you.
The speech indicates that the Bureau listened to and will implement a solution for the industry's challenges in adopting modern communication technology. Kraninger states, "As many of you know, the Act was passed in 1977. This was the same year that Steve Jobs introduced the world to the idea of a personal computer with the design of the Apple II. Phone booths were on almost every corner and cell phones were not even imaginable. And though there have been many advances in communications technologies since 1977, the FDCPA has not been updated to reflect our use of such technologies." Given the pace of technological advancements, Kraninger gives credit to Congress for having the foresight to require the Bureau to re-evaluate its rules for effectiveness every five years.
The speech also gives a glimpse into the possible release timeline of the rules, which will be "in the coming weeks."
Many stakeholders have had robust discussions with the Bureau regarding these rules, highlighting the challenges faced by both consumers and the industry. All sides have been eagerly awaiting the Notice of Proposed Rulemaking to see what the future of debt collection regulations holds. Specifically for industry, the debt collection rules are an opportunity to get clear rules of the road where there is currently little to no guidance and each minor change leads to an onslaught of lawsuits by the cottage industry of plaintiffs' attorneys.
While the news about call caps is not ideal for the industry, the allowances for bringing collections communications into the modern era is potentially a big win, depending on how the rules are drafted. Debt collector's use of email has been a challenge. The complexity piled on when the Bureau issued an amicus brief implying that E-SIGN applies to validation notices. The Bureau's Outline of Proposed Rulemaking also included the ability to email, but it contained New York-like consent requirements, which are very prohibitive. It will be interesting to see the Bureau's solution to email. It will also be interesting to see how the Bureau addresses text messages, especially since text messages trigger the Telephone Consumer Protection Act, which is under the realm of the Federal Communciations Commission.