CFPB rules would let debt collectors send unlimited texts, with a caveat

Consumer Confidential
Kathy Kraninger became director of the CFPB in December.
(Ron Sachs / CNP/Zuma Press/TNS)

A U.S. regulator unveiled proposed rules for debt collectors on Tuesday that would restrict how often they can call borrowers, while making clear that firms can send unlimited text messages and emails as long as consumers don’t opt out of such communications.

The Consumer Financial Protection Bureau regulations — the result of a process started under former Director Richard Cordray — would mark some of the first major rule changes for the industry in four decades if they are adopted.

The proposal is likely to trigger fresh claims from Democratic lawmakers that the CFPB is being gutted under President Trump, because the rules would fall far short of what consumer advocates have called for. Trying to rein in debt collectors was a signature effort for Cordray, an appointee of former President Obama who left the CFPB in 2017. The proposal is one of the first significant actions taken by Director Kathy Kraninger since she took over the regulator in December.

A CFPB spokesperson disputed that the agency’s proposal would let debt collectors issue unlimited texts, because every message sent would have to include an option that permits consumers to unsubscribe from future communications. The proposal also makes clear that collectors could face liability if the number of texts and emails they send is deemed to be harassment, oppression or abuse, the spokesperson said.


Key details

Under the proposal, debt collectors would be restricted to seven attempts to call a debtor by telephone in a week, and one actual conversation between a collector and debtor per week; there is also a new process through which debt collectors can leave voicemails.

Collectors would be explicitly permitted to contact debtors through email and text message.

Collectors would be prohibited from contacting debtors through social media or through a work email.

Rules would almost exclusively cover third-party debt collectors and generally wouldn’t apply to in-house creditors, according to a senior bureau official. The proposed rules also clarify what debt collectors have to disclose to consumers in official notices.


“The bureau is taking the next step in the rulemaking process to ensure we have clear rules of the road where consumers know their rights and debt collectors know their limitations,” Kraninger said in a statement. “As the CFPB moves to modernize the legal regime for debt collection, we are keenly interested in hearing all views so that we can develop a final rule that takes into account the feedback received.”

Debt collection is one of the areas in which the CFPB receives the most complaints, with about 81,500 consumer grievances filed last year, according to a bureau report to Congress.

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