By: Ireland O’Connell, Legal Intern, Volunteer Lawyers Program
The Consumer Financial Protection Bureau (CFPB) issued an interim final rule on April 19, 2021. The CFPB has authority under the Fair Debt Collection Practices Act (FDCPA) to “prescribe rules with respect to the collection of debts by debt collectors.” Attorneys who engage in eviction proceedings on behalf of landlords or residential property owners to collect unpaid residential rent may be “debt collectors” as defined by the FDCPA.
What: The rule requires debt collectors to provide clear and conspicuous written notice to tenants of their rights under the CDC eviction moratorium (moratorium extended through June 30, 2021) and prohibits debt collectors from misrepresenting tenants’ eligibility for protection from eviction under the CDC moratorium. Some states and localities have adopted their own eviction moratoria; debt collectors may also be required to provide notice of these. The CFPB’s rule does not preempt more protective state law. The notice must be provided on the same date as the eviction notice, or, if no eviction notice is required by law, on the date that the eviction action is filed. Debt collectors must provide the notice in writing, NOT through phone calls or electronic notice such as text messages or emails. The CFPB is providing debt collectors with sample language to satisfy the rule’s disclosure requirements, which can be found in the resources section below.
When: The Interim Final Rule will take effect on May 3, 2021. Debt collectors may begin complying with the rule before the compliance date.
Consequences of Failing to Follow this Rule: Debt collectors who evict tenants who may have rights under the CDC mortarium without providing notice of the moratorium or who misrepresent tenants’ rights under the moratorium can be prosecuted by federal agencies and state attorneys general for violations of the FDCPA and are also subject to private lawsuits by tenants. The FDCPA provides a private right of action against debt collectors, and violators can be held liable for actual damages, statutory damages, and attorney’s fees. Class actions may be brought under the FDCPA.
Information obtained from the Consumer Financial Protection Bureau: https://www.consumerfinance.gov/
Resources:
- CHPB Interim Final Rule: https://files.consumerfinance.gov/f/documents/cfpb_debt_collection-practices-global-covid-19-pandemic_interim-final-rule_2021-04.pdf
- Sample Language for Debt Collectors: https://files.consumerfinance.gov/f/documents/cfpb_debt-collection_sample_covid-19_tenant_eviction_protection_disclosure_language.pdf
- Coronavirus housing resources: https://www.consumerfinance.gov/coronavirus/mortgage-and-housing-assistance/renter-protections/?utm_source=youtube&utm_medium=video&utm_campaign=vanity_renters
- COVID Emergency Rental Assistance Program: https://home.treasury.gov/policy-issues/coronavirus/assistance-for-state-local-and-tribal-governments/emergency-rental-assistance-program
- Fast Facts: 2021 Debt Collection COVID-19 Interim Final Rule: https://files.consumerfinance.gov/f/documents/cfpb_fast-facts_debt_collection-eviction-ifr_2021-04.pdf
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