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For debt collectors, the CFPB’s notice of proposed rule (NPR) is becoming the embodiment of the phrase “hurry up and wait.”
The Bureau’s proposed rule released in early May. Once it became public, the reaction from many experts was appreciation for the level of detail in the 500+ page document. Weeks after the release of the rules, though, the excitement is wearing off and the hard work has begun.
Agencies must now identify what to do–and what to avoid–to shape the best possible outcome for debt collectors and the consumers they serve.
What Debt Collectors Should Do
Read The Rule
It’s not necessary for everyone in your office to read the rule, but there should be a few people assigned to understand what the document contains. Designate a team to read the rule and outline how it will impact day-to-day operations.
Talk to Your Clients
Digital communication plays a big role in the NPR. Your office should start thinking about using text message or email if you aren’t already. To implement as soon as you can once the final rule is published, you should coordinate with your clients now. Ask them about their process of collecting mobile phone numbers and email addresses from consumers. To increase what you collect through digital communication channels like email and text, you’ll need accurate contact information from clients up front.
Think About The Implications for Consumers
The CFPB’s Town Hall highlighted many concerns consumer advocates have about the new rule. Fears about high call caps and use of email and text messaging are causing groups to worry–when they may not be looking at the full picture. Some of the best advocates a consumer may encounter are the collectors working to help resolve their debts. Use your unique industry perspective to think about how the new rule will impact communication efforts with consumers.
Make Informed Comments
The most important action collectors can take in the short-term is to make informed comments during the 90-day public comment period. Consult your team and industry attorneys or compliance experts to understand points of focus.
Connect the information in the new rule to how it will change the way you run your business. Then let the Bureau know what you find out. This is a unique chance collectors have to provide industry input. Let the CFPB know what the proposal will mean for you, your clients and consumers.
What Debt Collectors Should Not Do
As a panelist for an Accountsrecovery.net webinar the week the rule was released, John Bedard of the Bedard Law Group, P.C., told collectors “Don’t panic!” The NPR is the beginning of a new chapter for the collection industry, but there is no need for immediate worry about its contents. Study the document and consult industry experts to fully understand its implications.
Change Office Policies and Procedures
Collectors are excited to see the CFPB's willingness to acknowledge the need for clarity. But this is only the beginning of the rule making process.
Experts are confident components of the rule, like digital communication, will remain in the final draft. But there is no telling how much the rule will change between proposal and final draft. Putting anything from the NPR into a formal policy or procedure is premature and could even cause legal trouble for your agency as the new rule is not yet in effect.
Ignore News and Updates
Like any other aspect of running a business, managing the new rule is about balance. It is important not to worry at such an early stage and you certainly shouldn’t begin treating it as a final regulation.
However, it is something that will shape your industry for years to come. Do not ignore the news and updates put out by industry experts. These can give you knowledge of official interpretations and highlight important sections of the NPR on which you should comment.
For up-to-date industry news and information on upcoming webinars on the proposed rule, subscribe to the PDCflow blog.