Another Extension for the CFPB Debt Collection Rulemaking Process

The CFPB announced last week that it has, once again, extended the “pre-rule” phase of the debt collection rulemaking process — this time through June 2016.

In November 2013, the Bureau issued an Advance Notice of Proposed Rulemaking seeking comment, data, and information from the public about debt collection practices, and in January 2014, the CFPB extended the comment period to February 28, 2014. Since then, there have been multiple extensions:

• In November 2014 a notice was issued pushing out the end of pre-rule activities from December 2014 to to April 2015
• In May 2015 a notice was issued pushing out the end of pre-rule activities from April 2015 to December 2015
• In November 2015 a notice was issued pushing out the end of pre-rule activities from December 2015 to February 2016

The CFPB says it is in the process of analyzing responses to a survey seeking information from consumers about their experiences with debt collectors and is engaged in qualitative testing to determine what information would be useful for consumers to have about debt collection and how that information should be provided to them.

insideARM Perspective

The next formal step in debt collection Rulemaking is expected to be the convening of a Review Panel under the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA). We are aware that the Bureau has begun to gather names of potential panel participants, but to our knowledge this process has not yet officially begun. Once it does, that will be the industry’s first opportunity to get a look at specific rules the CFPB is proposing.

insideARM wrote about the SBREFA process almost exactly a year ago.

We expect the number of representatives will generally be around 15-20. They will provide feedback on the options we’re considering and on alternatives to minimize negative impacts. Within 60 days of convening, the panel will complete a report on the issues, including input they receive, their findings on the economic impacts of the proposal, and any alternatives that achieve the proposal’s objectives while minimizing unnecessary burdens. The Bureau will then consider the panel’s input in preparing the proposed rule.

Prior extensions of the pre-rulemaking phase have been longer, so one might wonder whether we are actually closer to the next step this time.

Get ready. While the current phase has lasted several years, the statute provides a very brief period during which to analyze and comment on the details released with the SBREFA process.