On November 30, 2021, the Consumer Financial Protection Bureau (CFPB) will implement changes to Regulation F of the Fair Debt Collections Practices Act (FDCPA) for the first time since 1977.  Regulation F dictates just about every aspect of how collection agencies and law firms interact with consumers, so modernization was certainly needed after nearly 45 years, and for the most part these changes will not have any particularly negative consequences for debt servicers or their clients.

Early versions of the new rules would have made things quite difficult for collectors and originators, but industry advocates (including Partners from several of the law firms within our Legal Network) worked closely with regulators to ensure the final changes were fair to all.  New limitation on contacting consumers may create some minor delays or difficulties (agencies now can’t make more than seven calls in seven days, and must wait seven days to call again if the consumer doesn’t give them permission to follow up sooner), but other parts, like new rules governing electronic communications, could be quite positive in bringing the collections industry into the 21^st century (again, these rules haven’t been updated since they were originally written in 1977).  The new regulations also provide a new “Safe Harbor” Demand Letter that collectors should use to best protect their communications from potential liability (more on that below).

Our Performance Managers have been working with all of the agencies and law firms within our network to ensure their procedures and systems are ready for the rule changes, and we’ll continue to monitor their communication efforts closely thereafter to ensure full compliance.  We’ll also be working on rolling out new campaigns utilizing email and text messages, since those forms of communication will soon be specifically allowed under the FDCPA.  For the most part, we don’t expect to see these changes affect our clients in significant ways, but there are a few proactive steps clients can take that should help us avoid potential issues in the future.

The most important thing that should be emphasized to your on-site community teams is the importance of providing a copy of the actual Move Out Statement (aka Final Accounting Statement or Final Move Out) that was sent to the past resident once their final balance was assessed.  The new “Safe Harbor” Letter requires us to provide some additional information about how the balance might have changed since they moved out and received their statement, and the inclusion of the ACTUAL document will help us better ensure the information we’re sending to the consumer is accurate.   If your company’s policy does not already require your communities to retain a copy of the actual Move Out Statement that is mailed to the past resident, we would highly recommend implementing such a policy by the end of November.