John Zasada, Compliance Consulting Director, Financial Institutions Group

On Dec.18, 2020, the Consumer Financial Protection Bureau (CFPB) issued a final rule on disclosures required by the Fair Debt Collection Practices Act (FDCPA). The 354-page final rule clarifies the information a debt collector must provide to a consumer at the outset of debt collection communications and a model validation notice containing such information.

It also addresses consumer protection concerns related to passive collections (i.e., the practice of furnishing information about a debt to a consumer reporting agency before communicating with the consumer about the debt) and the collection of debt beyond the statute of limitations (i.e., time-barred debt). The rule goes into effective Nov. 30, 2021.

This is the second final rule issued by the CFPB on the FDCPA. Back on Oct. 30, 2020, the CFPB issued a 653-page FDCPA final rule, which prescribed rules governing the activities of debt collectors.

For more information on how this new rule may impact your credit union, please contact Doeren Mayhew’s regulatory specialists.