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CFPB Issues New Proposed Rule on Time-Barred Debt

On Friday, February 21, 2020, the CFPB issued a Supplemental Notice of Proposed
Rulemaking, proposing a rule to amend Regulation F, which implements the Fair Debt
Collections Practices Act (FDCPA). The new, supplemental proposed rule seeks to
amend an earlier proposed rule issued by the CFPB last May. The May 2019 proposed
rule was aimed at third-party debt collectors and was intended to create regulatory
guidance on compliance with the FDCPA. The May 2019 Proposed Rule has yet to be
adopted as a final rule.

The supplemental proposed rule requires
debt collectors to make certain
disclosures when collecting on timebarred
debts. A time-barred debt is a debt
where the applicable statute of limitations
has expired. The required disclosures
would require that a collector inform the
consumer that the debt is time-barred and
that the debt collector will not sue to
collect it. Further, if state law allows for the revival of the debt, the debt collector must
inform the consumer that revival can occur and the circumstances under which it can
occur. The supplemental proposed rule includes model notices to provide consumers
regarding the collection of time-barred debts.
The comment period runs for sixty days from the date that the supplemental notice of
proposed rulemaking is published in the Federal Register. SVL will continue to monitor
the CFPB’s actions to regulate debt collection and will provide information to our clients
regarding the same. We also will address any new regulatory issues at our seminar, The
SVL SourcExpo, in July. Additional information on the SVL SourcExpo can be found
here: www.svllaw.com/sourcexpo-2020/.