On January 15, 2021, the Consumer Finance Protection Bureau (CFPB) issued a small entity compliance guide summarizing the October 2020 debt collection rule. The small entity compliance guide is available here. Earlier, the October 2020 debt collection rule amended Regulation F to implement most of the Fair Debt Collection Practices Act’s (FDCPA), including, among other things, communications in connection with debt collection, prohibitions on harassment or abuse, false or misleading representations, and unfair practices in debt collection. The October 2020 Final Rule is effective November 30, 2021.
The small entity compliance guide includes a detailed summary of the October 2020 debt collection rule’s substantive prohibitions and requirements, including those that generally restate the FDCPA’s prohibitions and requirements. The guide also has examples to illustrate some portions of the October 2020 debt collection rule. According to a February 2020 CFPB policy statement, such compliance guides are not “rules” under the Administrative Procedure Act, will not be used by the CPFB to make decisions that bind regulated entities, but are meant to present “requirements of existing rules and statutes in a manner that is useful for compliance professionals, other industry stakeholders, and the public.” The compliance guides may also include “practical suggestions for how entities might choose to go about complying with those rules and statutes,” but may not address all situations, and an entity may still be required to make business decisions where there are multiple methods of compliance.
The small entity small entity compliance guide currently does not address the CFPB’s December 2020 debt collection rule, but the CFPB indicated it plans to update the compliance guide to include the December 2020 debt collection rule.
The small entity small entity compliance guide, together with the October 2020 and December 2020 debt collection rule, provide covered persons a wealth of new guidance and materials to consider and evaluate. We will continue to review and provide periodic updates. For questions please Scott Hyman.