The Consumer Financial Protection Bureau is making plans to enter the technology age with its proposal to change the rules for debt collectors. While it’s great that they’re getting more specific about what is and isn’t allowed, you’re almost certainly not going to love all the changes.
A debt collector can call you seven times each week per unpaid debt; if you actually pick up the phone and speak to them, they can’t call you for another week. Right now, if they want, they can call you every day. Every day!
The rule would require that collectors provide an itemized bill along with a plain-language guide to explain your rights and how you can dispute the bill.
The rule change would prohibit debt collectors from reporting your debt to a credit reporting agency before informing you of your delinquent debt.
The CFPB also plans to prevent debt collectors from suing you to collect time-barred debt: an unpaid bill that has gone over the number of years it can be collected (anywhere between three and 10 years, typically). However, although the right to sue will go away, collectors will still be able to pursue these “zombie” debts.
The new rule would make it clear that debt collectors can contact you via email and text message.
The original Fair Debt Collections Practices Act was developed in 1977, a halcyon time before email and text messages and cell phones and the internet. It does not restrict debt collectors from using text messaging or email to pester you about your delinquent bills because there is no language about those then-mostly imaginary methods of communication.
“The FDCPA explicitly addressed the use of postcards, collect calls, and telegrams,” bureau head Kathleen Kraninger said at a town hall event on the changes today. According to Kraninger, it’s in the interest of convenience to allow people to be contacted by text and email rather than rely on phone calls from debt collectors.
But it’s up to you to opt out of methods of communication you don’t want to receive. The new rule plans to set limits to prevent harassment and to make it easy for you to set your communication preferences, but don’t expect to get a form in the mail to choose how you want to stay in touch with debt collectors. They’re likely to start texting and emailing and wait for you to use the “unsubscribe” option that Kraninger says will be present on all email and text message correspondence.
“Real reform could call for consumers to opt in, not out,” Melissa Stegman, senior policy counsel at the Center for Responsible Lending, said in a press release. The National Consumer Law Center is also concerned. “And the proposed rule allows critical notices to be sent by email to consumers who may not have regular internet access,” Margot Saunders, an attorney at the organization, said in a statement. “The cell phones used by many low-income consumers do not provide the ready email access or ample data that wealthier people enjoy.”
The CFPB has been on this slippery slope of not actually helping consumers since President Trump took control of everything we once loved. The CFPB killed plans for the fiduciary rule. It rolled back the ability to repay requirement for lending. It didn’t make sure there would be enough donuts for the whole class.
I’m not even sad anymore; I’m just disappointed.
The debt collection proposal is open for public comment, and once finalized, it’ll take a year for the rules to become enforced.
But can we talk about the process for submitting a comment, while we’re here? It’s sort of bunk.
The CFPB provides this notice with its list of issues for which the comment period is open.
But when you click on your issue of choice, there are no easy instructions for how to actually submit a comment. There is only one open opportunity to comment that directs you offsite to a formal comment form. Otherwise, you’re left to your own devices if you have strong feelings you want to share with the CFPB. (I have chosen the endless echoing void of the internet.)
For now, the existing rules for debt collectors still stand:
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