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Financial Services Law Insights and Observations

CFPB extends comment period for proposed rulemaking on time-barred debt disclosures; CFPB and FTC release 2019 FDCPA report

Federal Issues CFPB FTC Debt Collection FDCPA Covid-19

Federal Issues

On March 20, the CFPB announced it was extending the comment period on its Supplemental Notice of Proposed Rulemaking related to time-barred debt disclosures (covered by a Buckley Special Alert) for an additional 30 days. Given the challenges created by Covid-19, the comment period will now end June 5.

The same day, the CFPB and FTC released their annual report to Congress on the administration of the FDCPA, which highlights the 2019 efforts of the agencies. Under a memorandum of understanding, the agencies are provided joint FDCPA enforcement responsibility and may share supervisory and consumer complaint information, as well as collaborate on education efforts. Among other things, the report provides general demographic and economic data about consumer debt and the debt collection industry, and highlights enforcement actions, education efforts, and supervisory findings. The report also notes that the CFPB handled roughly 75,000 complaints filed by consumers about first- and third-party debt collectors in 2019, down from the 81,500 it received in 2018, and engaged in five public enforcement actions arising from alleged FDCPA violations. Judgments resulting from these actions yielded nearly $50 million in consumer redress and $11.2 million in civil money penalties.

With respect to the FTC, the report states that in 2019 the agency obtained approximately $25 million in judgments and permanently banned 23 companies and individuals that engaged in serious and repeated violations of law from working in the debt collection industry. The report also highlights the FTC’s comment letter on the Bureau’s May 2019 Notice of Proposed Rulemaking to implement the FDCPA and to address other debt collection issues, in which the agency stated that it “has long advocated for amendments and clarifications to existing laws to account for changes in the debt collection marketplace and consumer technology” (covered by InfoBytes here).

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