FDCPA update – REG F compliance

GUEST EDITORIAL

On November 30, 2021, the CFPB‘s FDCPA Regulation F Final Rules went into full effect. The FDCPA’s rules now provide specific requirements for phone calls, emails, text messages and social media contacts between debt collectors and consumer debtors.

In addition, the CFPB has provided new Validation Notice requirements which may create added compliance burdens for creditors and debt collectors. While the Federal rules are specifically applicable to third-party debt collectors only, often State law (such as California’s Rosenthal Act) will incorporate most of the Federal FDCPA rules and regulations.

Credit Unions will often outsource defaulted debt collection to third-party debt collectors. Doing so may create a need for Credit Unions to review their third-party debt collectors’ updated policies and procedures to ensure compliance with the CFPB’s new Reg. F rules.

In addition, for Credit Unions that outsource consumer debt collection to third parties in California, the California Debt Collection Licensing Act (“DCLA”) will require any non-exempt debt collectors to at least apply for a debt collection license by December 31, 2021. This application process is handled by the California Department of Financial Protection and Innovation and NMLS.

Please contact me if you have questions on these new FDCPA/Rosenthal/DCLA requirements. Our office can review your policies and procedures and provide guidance regarding compliance with the new laws.