Quietly, on the eve of the long holiday weekend, the Consumer Financial Protection Bureau (CFPB) published its Spring Rulemaking Agenda update. The update includes a second extension of the end of Prerule Activities for Debt Collection, to December of this year. In November 2014, the Bureau extended the period for Prerule Activities from December 2014 to April 2015.
This new scheduled end to Prerule Activities is more than two years following the issuance of the 114 page Advance Notice of Proposed Rulemaking (ANPR) which posed 162 questions to stakeholders. Following a single two-week extension to the 90-day Comment Period, the CFPB received 23,000 responses (a good portion of which were evidently form letters, but nonetheless, a significant review task).
Much analysis of those comments has since been offered, including:
- The CFPB’s Proposed Rulemaking Takeaways from the First 1000 Comments
- Anticipating a New Regulatory Regime for Debt Collection
- At-a-Glance Responses to the CFPB Debt Collection Rulemaking Proposal
- State AGs Miss the Mark on Business Records in FDCPA Rulemaking Comments
In an address to executives at insideARM’s Larger Market Participant Summit in January 2014, Tom Pahl, Managing Counsel in the CFPB’s Office of Regulations noted that rulemaking for debt collection was discretionary for the CFPB under Dodd-Frank, unlike mortgage rulemaking — for example — which was mandated by the legislation. But Pahl said that the Bureau decided to pursue new debt collection rules because consumers have no choice in their dealings with the ARM industry and complaint volumes support additional rules. He also noted that technology gaps between the current environment and the FDCPA, passed in 1977, lends itself to additional clarification.
While Pahl himself was familiar with the industry from his prior work at the Federal Trade Commission, many others at the CFPB were not experienced in the complex nuances of debt purchasing and debt collection. Over the past year and a half, industry participants have spent a great deal of energy and time helping Bureau staff, as well as consumer groups, to understand how the industry works, with the hope that any rules resulting from the process will be thoughtful and minimize unintended consequences.
Indeed, it seems the task became more complicated than expected; hence the second extension of the Prerule Period.
What’s happening now/next?
The Bureau is currently conducting a survey of thousands of consumers to gather first-hand feedback about their experiences with debt collectors. Among other things, they’d like to hear from consumers how they prefer to be contacted by debt collectors. Prior to issuing this survey, the CFPB requested comments.
The next formal step in Rulemaking is expected to be the convening of a Review Panel under the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), however to our knowledge this process has not yet officially begun. The CFPB recently convened a SBREFA panel in the Payday//Title/Installment Loan rulemaking process. For some guidance on the schedule, we can look to the timeframe in that case.