As both feared and expected, the Consumer Financial Protection Bureau has issued a Notice of Proposed Rulemaking to implement the revised Fair Debt Collection Practices Act (FDCPA). 

Controversial among the provisions is the plan’s allowance of unlimited collection efforts by text and e-mail.

The proposal would provide consumers “with clear protections against harassment by debt collectors and straightforward options to address or dispute debts.”

Among other things, the NPRM would “set clear, bright-line limits” on the number of calls debt collectors may place to reach consumers on a weekly basis and clarify how collectors may communicate lawfully using newer technologies, such as voicemails, e-mails, and text messages, that have developed since the FDCPA’s passage in 1977.

“The Bureau is taking the next step in the rulemaking process to ensure we have clear rules of the road where consumers know their rights and debt collectors know their limitations,” said CFPB Director Kathleen Kraninger. “As the CFPB moves to modernize the legal regime for debt collection, we are keenly interested in hearing all views so that we can develop a final rule that takes into account the feedback received.”

The proposed rule can be read online.

Prior to the Dodd-Frank Act, Congress had not delegated to any agency the authority to issue substantive rules to interpret the FDCPA. Dodd-Frank delegated that authority to the Bureau.

The proposal announced May 7 would:

  • limit debt collectors to no more than seven attempts by telephone per week to reach a consumer about a specific debt;
  • require debt collectors to send consumers a disclosure with certain information about the debt and related consumer protections, including an itemization of the debt and plain-language information about how a consumer may respond to a collection attempt, including by disputing the debt;
  • require the disclosure to include a “tear-off” that consumers could send back to the debt collector to respond to the collection attempt; and
  • clarify how debt collectors may lawfully use newer communication technologies, such as voicemails, e-mails, and text messages, to communicate with consumers and would protect consumers who do not wish to receive such communications by, among other things, allowing them to unsubscribe to future communications through these methods.

The proposed rulemaking would also clarify how collectors may provide required disclosures electronically. In addition, if consumers want to limit ways debt collectors contact them, for example at a specific telephone number while they are at work or during certain hours, the rule clarifies how consumers may easily do so.

The proposed changes also “prohibit suits and threats of suit on time-barred debts and require communication before credit reporting.” The rule would prohibit a debt collector from suing or threatening to sue a consumer to collect a debt if the debt collector knows or should know that the statute of limitations has expired.

The proposal would also prohibit a debt collector from furnishing information about a debt to a consumer reporting agency unless the debt collector has communicated about the debt to the consumer, such as by sending the consumer a letter.

The public is invited to submit written comments on the proposed rule.