CFPB Seeks Input on Time-Barred Debt Collection Proposal – NMP Skip to main content

CFPB Seeks Input on Time-Barred Debt Collection Proposal

Feb 21, 2020
The Consumer Financial Protection Bureau has announced that it has taken measures to make it easier for consumers with urgent financial needs to obtain access to mortgage credit more quickly in the middle of the COVID-19 pandemic

The Consumer Financial Protection Bureau (Bureau) has issued a Supplemental Notice of Proposed Rulemaking (NPRM) related to time-barred debt collection.
 
The agency is proposing to prevent collectors from using non-litigation means – including telephone calls – to collect on time-barred debt unless collectors disclose to consumers during the initial contact and on any required validation notice that the debt is time-barred. Last May, the CFPB published a proposal to implement the Fair Debt Collection Practices Act as a means of providing consumers with clear protections against harassment by debt collectors and straightforward options to address or dispute debts. The proposal also presented defined limits on the number of calls debt collectors may place to reach consumers on a weekly basis and clarified how collectors may communicate lawfully in voicemail and digital messaging.
 
Furthermore, the NPRM also proposed to prohibit debt collectors from suing or threatening to sue on debts they know or should know are time barred. However, the CFPB also included “know or should know” standard in its proposal recognizing the concern that some debt collectors could be genuinely unaware if the statute of limitations expired even after undertaking a reasonable investigation. 
 
The Supplemental NPRM proposes model language and forms that debt collectors could use to comply with the proposed disclosure requirements, the CFPB added. The public is invited to submit written comments on the proposed rule, including on the proposed knowledge standard, in the 60 days following its publication in the Federal Register.

 
 

 
About the author
Published
Feb 21, 2020
CFPB Tells Lenders Immigration Status Can Factor Into ATR Analysis

CFPB frames immigration status as a potential ability-to-repay factor when future U.S.-based income is at risk

UAD 3.6 Deadline Nears; First American Earns Verification

First American's ACI Sky Workbench gains verification ahead of the Nov. 2 implementation date for the GSEs' updated appraisal reporting requirements

MISMO Introduces New Loan Boarding Standard

Wrapper Files support standardized data transfers between origination and servicing systems, with potential savings of $60 to $160 per loan

The GLBA Compliance Gap Your AI Deployment Just Opened

Old statutes, new models, and the vendor contract you signed before machine learning became operational

FHA Keeps Tri-Merge Credit Reports While Expanding Approved Scoring Models

HUD says FHA lenders will continue using three-bureau credit reports even as the agency adopts newer scoring models aimed at increasing competition and modernizing mortgage underwriting

House Passes Amended 21st Century Road To Housing Act

The House version softens a controversial provision aimed at large institutional investors