FDCPA Gets New Industry-Approved Amendments

Changes in the FDCPA have been approved by the U.S. Congress and sent to the President to sign into law. The amendments were part of the Financial Services Regulatory Relief bill which was passed this weekend.

Some of the key changes include clarification around “mini-Miranda” disclosures and legal codification that allows agencies to collect during the 30-day validation period.

The mini-Miranda clarification comes in updating protocol for legal pleadings and other communications, such as 1099-C forms. One of the new amendments states, “A communication in the form of a formal pleading in a civil action shall not be treated as an initial communication.” Also, communications that do not seek the payment of a debt, like 1099-C forms or Gramm-Leach-Bliley Act privacy notices, will no longer be considered an initial communication and will not require mini-Mirandas.

The FDCPA was also specifically amended to allow for the collection of a debt during the 30-day validation period, unless the consumer has an active written dispute regarding the debt.

The FDCPA amendments were part of a larger Financial Services Regulatory Relief bill which the House passed last week and the Senate approved Saturday. The bill aims at correcting many outdated or redundant regulations in the financial services and banking industries.

The new amendments also include a provision that certain bad check enforcement firms, such as companies that run pretrial diversion programs for bad check offenders, will not be legally defined as debt collectors for purposes of the FDCPA.

ACA International, the association for credit and collection professionals, has made FDCPA clarification one of its main targets over the past 18 months.