CFPB Issues CDC Moratorium Disclosure Rule
CFPB Rule Requires Disclosure of CDC Moratoriam by Debt Collectors
On April 18, 2021, the Consumer Financial Protection Bureau issued an interim final rule on “Debt Collection Practices in Connection with the Global COVID-19 Pandemic". The Bureau plans to proceed with enforcement of the rule starting May 3, 2021. Below is a short summary covering a few salient aspects of this new rule. Please note that the following information is strictly for informational purposes only and does not constitute legal advice. We strongly advise that you review the full rule and consult with your legal counsel on its application to your current and future business practices.
The intention of the final rule is to require disclosures of the CDC eviction moratorium in the context of residential rental debt collection. The CFPB’s new rule requires debt collectors — including an agent or attorney acting as a debt collector on behalf of a landlord or owner of the residential property — to provide written notice to tenants of their rights under the federal eviction moratorium, and prohibits debt collectors from misrepresenting a tenant’s eligibility for the protections established by the order. Specifically, the rule states:
“[A] debt collector collecting a debt in any jurisdiction in which the CDC Order applies must not file an eviction action for non-payment of rent against a consumer to whom the CDC Order reasonably might apply without making the disclosure described in § 1006.9(c)(1).”
In the background provided, the CFPB notes that “[a]ttorneys who regularly engage in debt collection activity, even when that activity consists of litigation, are debt collectors as defined in the [Fair Debt Collection Practices Act] FDCPA. Therefore, 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."
CFPB rule also provides sample language that can be used to comply with this new requirement. One example of the sample language provided is:
“Because of the global COVID-19 pandemic, you may be eligible for temporary protection from eviction under Federal law. Learn the steps you should take now: visit www.cfpb.gov/eviction or call a housing counselor at 800-569-4287.”
The CFPB rule and background provides detailed guidance on various aspects of this notice requirement, including in which eviction actions it applies and which it does not , the nature and frequency of the notice, and definitions for key terms. The CFPB will be taking public comment on this new rule for 15 days. To learn more, you can visit the CFPB's press release and information page on the new rule AVAILABLE HERE.
NAA plans on releasing an update to the Click and Lease that will include a form that would incorporate this new notice requirement. Users can expect that release prior to beginning of enforcement of this new rule on May 3.
Please review the rule and background in its entirety to have a full understanding of this new notice requirement.