Compliance Update with Amy K
by Amy Kleinschmit
Chief Compliance Officer

Next Week - NCUA Hot Topics with Steve Worden

Don’t forget to join Steve Worden, Supervisory Examiner for NCUA – Western Region, on Tuesday, November 17 at 10:00 a.m. (CT) time for the latest NCUA hot topics. A few items that Mr. Worden will cover that you don’t want to miss include: ALLL management; IRR – Lower rates compressing margins; Collections; BSA – CDD & Beneficial Ownership and BSA audits; and Planning – General discussion. You can register for this free event here.

CFPB – Fair Debt Collection Practices Act Final Rule

The Consumer Financial Protection Bureau (CFPB) has issued its final rule to implement the Fair Debt Collections Practices Act (FDCPA). This final rule can be found here and is effective one year after publication in the federal register.

The final rule is based primarily on the CFPB’s authority to issue rules to implement the FDCPA and, consequently, covers debt collectors, as that term is defined in the FDCPA. Under the final rule a debt collector is defined as “any person who uses any instrumentality of interstate commerce or mail in any business the principal purpose of which is the collection of debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due, or asserted to be owed or due, to another.” Furthermore, the term debt collector includes any creditor that, in the process of collecting its own debts, uses any name other than its own that would indicate that a third person is collecting or attempting to collect such debts. The rule excludes from this term, among other things, any officer or employee of a creditor while the officer or employee is collecting debts for the creditor in the creditor’s name.

The CFPB also issued an executive summary of this rule which can be found here.

To address concerns about debt collection communications and to clarify the application of the FDCPA to newer communication technologies that have developed since the FDCPA’s passage in 1977, the final rule, in general:

• Clarifies restrictions on the times and places at which a debt collector may communicate with a consumer, including by clarifying that a consumer need not use specific words to assert that a time or place is inconvenient for debt collection communications.

• Clarifies that a consumer may restrict the media through which a debt collector communicates by designating a particular medium, such as email, as one that cannot be used for debt collection communications.

• Clarifies that a debt collector is presumed to violate the FDCPA’s prohibition on repeated or continuous telephone calls if the debt collector places a telephone call to a person more than seven times within a seven-day period or within seven days after engaging in a telephone conversation with the person. It also clarifies that a debt collector is presumed to comply with that prohibition if the debt collector places a telephone call not in excess of either of those telephone call frequencies. The final rule also provides non-exhaustive lists of factors that may be used to rebut the presumption of compliance or of a violation.

• Clarifies that newer communication technologies, such as emails and text messages, may be used in debt collection, with certain limitations to protect consumer privacy and to protect consumers from harassment or abuse, false or misleading representations, or unfair practices. For example, the final rule requires that each of a debt collector’s emails and text messages must include instructions for a reasonable and simple method by which a consumer can opt-out of receiving further emails or text messages. The final rule also provides that a debt collector may obtain a safe harbor from civil liability for an unintentional third-party disclosure if the debt collector follows the procedures identified in the rule when communicating with a consumer by email or text message.

• Defines a new term related to debt collection communications: limited-content message. This definition identifies what information a debt collector must and may include in a voicemail message for consumers (with the inclusion of no other information permitted) for the message to be deemed not to be a communication under the FDCPA. This definition permits a debt collector to leave a voicemail message for a consumer that is not a communication under the FDCPA or the final rule and therefore is not subject to certain requirements or restrictions.

More rulemaking on this topic will be coming. The CFPB intends to publish a disclosure-focused final rule in December 2020 to clarify the information that a debt collector must provide to a consumer at the outset of debt collection and to provide a model notice containing the information required by FDCPA section 809(a). The CFPB also plans to address in the disclosure-focused final rule consumer protection concerns related to requirements prior to furnishing consumer reporting information and the collection of debt that is beyond the statute of limitations (i.e., time-barred debt).

Free Webinar – Financial Readiness Resources with NCUA and CFPB

On Wednesday, November 18, the National Credit Union Administration (NCUA) and the Consumer Financial Protection Bureau (CFPB) are co-hosting a webinar on financial literacy and consumer financial protections for servicemembers, veterans, and their families. Registration is open here.

The NCUA’s Office of Consumer Financial Protection will share financial literacy resources for servicemembers and their families on, and provide a brief overview of servicemember consumer financial protection laws and regulations. The CFPB’s Office of Servicemember Affairs will highlight their interactive learning tools and resources for servicemembers and their families.

As always, DakCU members may contact Amy Kleinschmit with any compliance related questions.



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