On July 30, the Consumer Financial Protection Bureau (CFPB) announced that the final rules interpreting the Fair Debt Collections Practices Act (FDCPA) will go into effect on Nov. 30, as originally planned. The CFPB issued a proposal in April that, if finalized, would have extended the effective dates to Jan. 29, 2022. However, after considering the comments submitted, the CFPB has declined to extend the implementation date and their proposal has been officially withdrawn.
Now that the uncertainly of the official implementation date has been resolved, here is a countdown of the steps organizations, who are subject to the final rule, should consider as the Nov. 30 deadline quickly approaches:
1. Talk with Your Highest Governing Body of Your Organization
Schedule and hold a meeting with your highest governing body along with any professional advisors to make key determinations with regard to rule requirements. Retain minutes of your discussions and the results;
2. Speak with Your Technology Vendors
Engage in a detailed conversation with all your collections system and technology vendors to ensure that (a) your systems will support and capture consumers’ communication preferences, (b) your application programming interfaces (APIs) are able to link to any self-service portal or web-based resources, and (c) any “apps” you offer to consumers are enabled in order to express or change communication preferences;
3. Update Consumer Information
Reach out to existing consumers to update contact information as well as any new, changed, or revoked permissions or preferences;
4. Decisions about the Model Validation Notice
Determine whether your company will migrate to the Reg F model validation notice. To ensure the notice will be compliant on or before the implementation date, you need to talk with your clients to determine that all necessary data elements can be transmitted timely and there is a determination as to which of the five mandated “itemization dates” will be used. If your company decides to continue to use a proprietary validation notice, review Reg F, specifically Section 1006.34 to assure your collection notice templates meet all mandated requirements;
5. Will you Use the “Limited Content Message?”
If your company decides to adopt the “limited content message”, you will need to test your collection agency’s name to assure that any message left, using that name, will be compliant and not reveal that the call is from a collection agency;
6. Review Credit Reporting Policies
Review your policies related to the furnishing of data to the consumer reporting agencies. If you do furnish data check that your system logic assures that after November 30, 2021, you will not be furnishing data on any accounts that have not received your initial collection notice;
7. Staff Training and Assessments
Review and update your talking points, training programs, voice analytics, and other ways in which you train collectors who engage and interact with customers to assure that they are familiar with how to handle and capture expressions of a consumer’s communication preferences, how to offer consumers optional communications strategies, how to listen for changes or revocations of communication preferences, and how to field questions about your Reg F compliant collection notice;
8. Review Document Retention Program
Tune up your document retention programs to assure that any and all artifacts and resources you have that can prove your compliance (or non-compliance) can be retained consistent with Reg F’s retention expectations. This includes including call recordings;
9. Are you Compliant with Call Frequency Requirements and Alternative Methods of Communication?
Ensure that you have the capability to monitor 7 call attempts within a 7-day period and then one call within a week after having a telephone conversation with a consumer. If you are using or intend to use electronic methods of communication like email or text, make sure that opt-outs and unsubscribes are working in real time and that there are no delays in complying with a consumer’s desire not to be contacted by one or both of those methods; and
10. Meet with your Clients
Schedule time to meet with your clients to assure they are aware of the high points of Reg F and how it may change the exchange of information about debts and consumers’ demographics and communications preferences – consider a debrief presentation to demonstrate how your company is adapting and planning for these Reg F changes.
Clark Hill’s Consumer Financial Services and Regulatory Compliance team has developed a unique “Reg F Ready” tool that can assess your policies and procedures to ensure you are meeting all the requirements under Reg F. For more information, please contact Joann Needleman, firstname.lastname@example.org, or Leslie Bender, email@example.com.
This communication is not intended to be legal advice and may not be used as legal advice. Legal advice must be tailored to the specific circumstance of each matter. Every effort has been made to ensure the information provided herein is up-to-date and accurate. It is not intended to be a full and exhaustive explanation of the law and it should not be used to replace the advice of your own legal counsel.