A Historical Perspective
In 1977, President Jimmy Carter signed the Fair Debt Collection Practices Act. Forty-three years later, the Consumer Financial Protection Bureau released Regulation F, the first complementary rulemaking under the FDCPA.
While Regulation F provided clarity on confusing aspects of the FDCPA, the CFPB declined to take certain positions that might have offered additional guidance in specific areas.
What is Regulation F and How Does it Complement the FDCPA?
As an administrative agency, the CFPB lacked inherent rulemaking authority until Congress granted this power in 2010 through the Wall Street Reform and Consumer Protection Act. After years of research and consultation, the CFPB published Regulation F to clarify existing FDCPA provisions rather than change them.
The regulation uses a novel format that closely mirrors FDCPA language. The CFPB did not comprehensively restate the entire FDCPA, so the original statute remains essential for reference.
What Does Regulation F Clarify for Debt Collectors?
The rulemaking focuses on three primary areas:
Consumer Contact
This represents the most substantial portion of Regulation F. The guidance addresses previously ambiguous questions about calling frequency, establishing that collectors may make up to seven calls within seven days. After successful contact, collectors must wait seven days before contacting again.
The regulation clarifies that unconnected calls do not count toward frequency standards, nor do limited content voicemails containing specific information only. Text messaging and email are now acceptable contact methods when consumers consent and collectors perform required due diligence.
Records Retention
The requirements are straightforward, designed to level the playing field for collection agencies and regulators. By maintaining required records, agencies provide evidence for regulatory review. Compliant agencies should experience minimal impact, while non-compliant operations that fail to maintain records will themselves violate the FDCPA.
State Opt-outs
This provision allows states with consumer protections matching or exceeding FDCPA standards to petition for exemption, with Regulation F outlining the application process.
What is Not Clarified by Regulation F?
Regulation F explicitly applies to entities whose primary business involves recovering debt owed to third parties. The CFPB declined to apply rules to original creditors, citing the Henson v. Santander case.
However, the agency left uncertain whether creditors breaking these rules might face liability under section 1031 regarding unfair, deceptive, or abusive practices. This creates ambiguity about CFPB enforcement against first-party collectors.
Additionally, the CFPB did not grant debt collectors explicit safe harbor protection for attorney involvement in lawsuits, instead continuing application of its meaningful involvement standard from previous enforcement actions.
What’s Next for the CFPB and the Credit Industry?
The CFPB indicated intentions to supplement Regulation F with additional guidance, finalizing such supplementary rules in December 2020. The agency also left the door open for potential future rulemaking addressing first-party collection practices.
This article is not intended to be a thorough recitation of Regulation F, nor is it intended to be legal advice. NeuAnalytics remains committed to supporting compliance through its Integrated Support Platform.
