Consumer Financial Protection Bureau: Debt Collection Practices in the Global COVID-19 Pandemic (Regulation F)

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B-333208

May 4, 2021

The Honorable Sherrod Brown
President
The Honorable Patrick J. Toomey
Ranking Member
Banking, Housing and Urban Affairs Commission
United States Senate

The Honorable Maxine Waters
President
The Honorable Patrick McHenry
Ranking Member
Financial Services Committee
House of Representatives

Topic: Consumer Financial Protection Bureau: Debt Collection Practices in the Global COVID-19 Pandemic (Regulation F)

Pursuant to Section 801(a)(2)(A) of Title 5 of the United States Code, here is our report on a major rule promulgated by the Bureau of Consumer Financial Protection (Bureau) titled “Collections Practices claims in relation to the world market. COVID-19 pandemic (Regulation F)” (RIN: 3170-AA41). We received the rule on April 19, 2021. It was published in the Federal Register as a provisional final rule; request for public comment April 22, 2021. 86 Fed. Reg. 21163. The effective date is May 3, 2021.

According to the Bureau, it issued this interim final rule to address certain debt collection conduct associated with a moratorium on evictions issued by the Centers for Disease Control (CDC). See in general 86 Fed. Reg. 8020 (February 3, 2021). The Bureau said this interim final rule applies to debt collectors, as that term is defined in the Fair Debt Collection Practices Act (FDCPA). See in general 15 USC §§ 1692–1692p. The Bureau also said the FDCPA establishes broad consumer protections and prohibits debt collectors from engaging in harassment or abuse, making false or misleading statements, or engaging in unfair practices in debt collection. of receivables.

The Bureau notes that this interim final rule amends Regulation F, which implements the FDCPA, to require debt collectors to provide written notice to certain consumers of their protections under the CDC order’s eviction moratorium. and to clarify that certain misrepresentations are prohibited. See in general 12 CFR dot. 1006 (Regulation F). According to the Bureau, 12 CFR § 1006.9 prohibits certain acts of debt collectors that undermine the purpose and effectiveness of the CDC’s order eviction moratorium to prevent the spread of coronavirus disease 2019 (COVID-19). . The Bureau stated that sections 1006.9(a) and (b) set out the object and scope of Subpart B and define certain terms used in the subpart, and that section 1006.9(c) identifies prohibited acts. The Bureau also stated that it was enacting Section 1006.9 pursuant to its authority under Section 814(d) of the FDCPA to make rules regarding debt collection by debt collectors and, in with respect to Section 1006.9(c), pursuant to its authority to interpret FDCPA Sections 807 and 808.

The Congressional Review Act (CRA) requires 60 days for the effective date of a major rule from the date of publication in the Federal Register or receipt of the rule by Congress, whichever is later. 5 USC § 801(a)(3)(A). However, the 60-day delay from the effective date may be waived if the agency concludes for cause that such delay is impractical, unnecessary, or contrary to the public interest, and the agency incorporates a statement of findings and reasons in the rule. Published. 5 USC §§ 553(b)(3)(B), 808(2). Here, while the Bureau did not specifically mention the 60-day timeframe of the CRA effective date requirement, it found valid reason to waive the notice and comment procedures. and incorporated a brief statement of reasons. Specifically, the Bureau said it had concluded that advance notice and public comment were impractical and contrary to the public interest given the public health emergency caused by the COVID-19 pandemic and the its effects on consumers. According to the Bureau, the interim final rule is necessary to avoid harm to consumers and to address the lack of clarity for debt collectors that would result if the interim final rule does not come into effect soon after its publication. The Bureau said that by identifying a practice that violates the FDCPA and by identifying means by which a debt collector can comply with the FDCPA while engaging in certain actions related to residential evictions, the interim final rule will benefit consumers while minimizing the burden on debt collectors.

Attached is our assessment of the Bureau’s compliance with the procedural steps required by Section 801(a)(1)(B)(i) through (iv) of Title 5 with respect to the rule. If you have any questions about this report or would like to contact GAO officials responsible for valuation work relating to the subject matter of the rule, please contact Shari Brewster, Assistant General Counsel, at (202) 512-6398.

Shirley A.Jones
Associate Legal Director

Pregnant

cc: Edward J. Lovett, Jr.
Main liaison with Congress
Consumer Financial Protection Bureau

PREGNANT

REPORT UNDER 5 USC § 801(a)(2)(A) ON A MAJOR RULE
ISSUED BY THE
CONSUMER FINANCIAL PROTECTION BUREAU
ENTITLED
« COLLECTION PRACTICES IN RELATION TO
WITH THE GLOBAL PANDEMIC OF COVID-19”
(RIN: 3170-AA41)

(i) Cost-benefit analysis

The Consumer Financial Protection Bureau (Bureau) has conducted an analysis of the benefits, costs and potential impacts of this Interim Final Rule (IFR). This analysis included a description of the data and evidence used and the establishment of a baseline against which the changes imposed by this IFR could be measured for (1) consumer benefits; (2) benefits and costs for owners; (3) benefits and costs for covered persons; (4) the potential impact on deposit-taking institutions and credit unions with total assets of $10 billion or less; and (5) the potential impact on consumers in rural areas and on consumer access to consumer financial products or services.

(ii) Agency Actions Regarding the Regulatory Flexibility Act (RFA), 5 USC §§ 603–605, 607, and 609

The Bureau stated that the RFA’s requirements for an initial and final analysis of regulatory flexibility do not apply to this IFR because the RFA does not apply to regulation where a general notice of proposed regulation is not is not required.

(iii) Agency Actions Regarding Sections 202-205 of the Unfunded Warrants Reform Act of 1995, 2 USC §§ 1532-1535

As an independent regulator, the Bureau is not subject to the Act. See 2 USC
§§ 658(1), 1502(1); 44 USC § 3502.

(iv) Other relevant information or requirements under laws and decrees

Administrative Procedure Act, 5 USC §§ 551 and following.

According to the Bureau, prior notice and public comment on the settlement would be impractical and contrary to the public interest given the public health emergency caused by the coronavirus disease 2019 (COVID-19) pandemic and its effects on consumers. The Bureau says this RFI is necessary to avoid harm to consumers and to address the lack of clarity for debt collectors that would arise if the RFI does not come into effect soon after its publication. The Bureau said that by identifying a practice that violates the Fair Debt Collection Practices Act (FDCPA) and by identifying means by which a debt collector can comply with the FDCPA while engaging in certain actions related to residential evictions, IFR will benefit consumers while minimizing the burden on debt collectors. See in general 15 USC §§ 1692–1692p (FDCPA).

Red Tape Reduction Act (PRA), 44 USC §§ 3501–3520

The Bureau has determined that this IFR imposes a new disclosure requirement under the FDCPA. The Office has submitted this requirement to the Office of Management and Budget (OMB) for review and has requested a new control number for this requirement. This requirement is titled “Debt Collection Practices in Relation to the Global COVID-19 Pandemic (Regulation F)” (OMB control number 3170-00xx). The Bureau estimated that the total number of hours worked annually for this collection was 3,000.

Legal authorization of the rule

The Bureau has promulgated this IFR pursuant to Section 5512 of Title 12, and Sections 1692I(d) and 1692o of Title 15, United States Code.

Executive Order No. 12866 (Planning and Regulatory Review)

As an independent regulator, the Bureau is not subject to the Order.

Executive Order No. 13132 (Federalism)

As an independent regulator, the Bureau is not subject to the Order.


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