WASHINGTON–New debt collection rules from the Consumer Financial Protection Bureau have now gone into effect, with the agency reminding there are five key issues credit unions and other institutions need to be giving attention.
According to a blog post by the CFBP, the new rules are designed to clarify how debt collectors can communicate with borrowers, including what information they’re required to provide at the outset of collection about the debt. The agency said the rules also outline rights of borrowers in debt collection and how they can exercise those rights.
The five key points the CFPB stressed in its announcement include:
- The parts of a debt collection validation notice;
- How often a debt collector can call a borrower;
- When a debt collector may report a debt to a credit reporting agency;
- Whether a debt collector can contact a borrower on social media about a debt; and
- What a “limited-content” message is.
The Two Rules
Earlier this week, the two rules that went into effect include:
- A rule adopted in October 2020 that focuses on debt collection communications and clarifies the Fair Debt Collection Practices Act’s (FDCPA) prohibitions on harassment and abuse, false or misleading representations, and unfair practices by debt collectors when collecting consumer debt.
- A rule adopted in December 2020 that the Bureau said aims to clarify disclosures debt collectors must provide to consumers at the beginning of collection communications. It also prohibits debt collectors from suing or threatening to sue consumers on time-barred debt. The second rule also requires debt collectors to take specific steps to disclose the existence of a debt to consumers before reporting information about the debt to a consumer reporting agency, CFPB stated.