In this edition of The Digest, we’re zooming in on a topic making headlines in the world of collections: the new CFPB debt collection rule. We sat down with TrueAccord’s Chief Compliance Officer Tim Collins to get his initial thoughts on what the new rule will mean for the collections industry, and how it may open new doors for better relationships between collectors and consumers.
Tim, thank you for sharing your thoughts on the long-awaited new CFPB debt collection rule. It’s the first big change to the FDCPA since 1977, and it provides new “rules of the road” for collections. What are some of the top takeaways for the collections industry?
As you said, this is the first major change to the FDCPA in over forty years. The new rule is meant to help the collections industry adapt to all the exponential changes in technology, communication, and consumer behavior that have happened since then.
To some degree, there is still a focus on regulating the more traditional world of call-and-collect agencies. There are new guidelines around call caps. They also put in a clearer definition of limited content messages, which was a topic that the industry was looking for guidance on. In general, there are now clearer instructions on the means by which a collector can reach a consumer.
Beyond the world of call-and-collect agencies, the new rule opens doors for better digital communications with consumers—email, SMS, etc. There’s a huge focus on consumer preference. The new rule is clear: the consumer has the right to tell you when is a good time for them to be contacted, and they have the ability to tell you what communications channels work best for them. All of that is very much in line with what we already do—and have always done—at TrueAccord.
I know TrueAccord was influential in issuing comments that were ultimately incorporated into the rule. Can you tell us a bit about that?
We’re proud to have been involved in providing public comments to the rule around the use of email in collections. We were able to share our insights on how emails should be sent, why email is convenient for consumers, the advantages of email with opt-out, and other dimensions of a successful, compliant email program.
[Editor’s note: for more insights from TrueAccord on using email in collections, check out our new whitepaper co-authored with Experian: What to Know When Adding Email to Collections: The Ultimate Guide]
It’s important to note that the new rule won’t take effect until late 2021, and there’s a lot that could change between now and then in the United States. So, there’s still some degree of uncertainty about how the rule will be implemented.
That’s right. There’s a lot of things that could happen between now and when the rule becomes effective. Also, we’re still waiting for part two of the rule to come out. That will likely happen in December.
So yes, there’s a lot that we still don’t know, and a lot that could change. There’s even a chance the whole rule could be tossed out, though that is unlikely. But right now, the new rule gives us a vision and a direction about where the industry is headed— and that is towards better alignment with consumers, more protection for consumers. That’s part of the CFPB’s mission, and that’s part of our mission as well.
This interview has been edited and condensed for clarity.
TrueAccord’s compliance and digital collections experts are available to talk more about the CFPB’s new debt collection rule and what it will mean for the collections industry. Start a conversation with our team to learn more.