Five Suggestions from the CFPB for NPRM Comments

The Consumer Financial Protection Bureau (CFPB) officially published the Notice of Proposed Rulemaking (NPRM) for debt collection in the Federal Register on Tuesday, May 21, triggering the countdown to the comment due date. Mark your calendars, because the comments are due on August 19, 2019.

As the industry reviews the rules and decides how to comment, the CFPB’s Senior Counsel Kristin McPartland graciously provided some guidance for comments at ACA International’s Washington Insights Fly-In Conference held last week. Below are the five takeaways from Ms. McPartland.

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1. Pay Attention to the Preamble

While it may be tempting to skip over the first 446 pages and go straight to the actual proposed rules, reviewing the preamble is a crucial step. Working through the preamble will help companies and industry groups identify important topics and structure their comments accordingly.

The CFPB intentionally raised questions it wants to be answered in the comments and these are both located and fleshed out in the preamble. While comments are not limited to solely the preamble questions, it is important to address them since these are the issues that the CFPB deems important.

2. Alternatives to Safe Harbors

The NPRM contains many safe harbor provisions.  These are the CFPB’s attempt to clarify what practices and procedures suffice for a debt collector to comply with the FDCPA and specific sections of the proposed rules. For an industry that experiences significant numbers of lawsuits over allegations of technical wording issues, such clarity is welcome. For example, the NPRM contains safe harbor provisions for a model validation notice form, electronic delivery of validation notices, and meaningful attorney involvement in debt collection litigation.

If a proposed safe harbor provision is insufficient or if a section of the proposed rules should contain a safe harbor provision not already listed, it is important to note this in comments. However, it is just as mportant to provide solutions to any gaps or insufficiencies in the form of alternatives or proposed new safe harbors. For example, if the safe harbor validation notice form is not workable for a specific type of debt—like healthcare—commenters should submit a sample of changes that would fix the deficiency.

3. Different Type of Debt, Different Impact

The CFPB is aware that a one-size-fits-all approach may be difficult to implement for different types of debts. The details of collecting student loan debt and healthcare debt, for example, are vastly different. The CFPB recommends providing factual information about these differences in comments.

4. Implementation and Enforcement Timelines

Debt collectors might be able to implement some of the proposed rules quickly; others might take more time. The comments should include notes about the time required to implement the proposal as a whole as well as the individual sections or issues. If it would take longer to implement certain sections than others, should there be different enforcement deadlines for certain issues? That is a question worth answering in the comments. Ms. McParland emphasized that the NPRM reflects the Bureau’s thoughts on a host of issues, but cautioned that until the rules are published in final form, they do not have the force of law.

5. Consumer Privacy

Consumer privacy is the next frontier in many industries, including financial services and debt collection. Certain states, such as California and Washington, have either already enacted or are preparing to enact new consumer privacy laws. With this trend, it is no surprise that the CFPB is interested in how its rules impact these new laws. To the extent appropriate, comments should include how the proposed rules would impact the issue of privacy.

insideARM Perspective

There is a lot of work ahead to prepare thorough comments to the NPRM. Hopefully, these guidelines make the process a little more focused and digestible. As the saying goes, how do you eat an elephant? One bite at a time. Also worthy of noting is that the CFPB has since published a table of contents for the NPRM.