Comment period extension. Yesterday, the CFPB announced a second 60-day extension of the comment period for its supplemental proposal that would require debt collectors to make specified disclosures when collecting time-barred debts. The CFPB previously extended the initial May 4 comment deadline until June 5. The new comment deadline is August 4, 2020. The CFPB indicated that the latest extension is intended to provide all interested parties with additional time to comment on the rulemaking as a result of the impact of the COVID-19 pandemic.
In her opening message that was part of the CFPB’s annual FDCPA report issued in March 2020, Director Kraninger indicated that the Bureau intended to finalize its May 2019 debt collection proposal in 2020. It is unclear, however, whether the Bureau plans to finalize the May 2019 proposal separately from finalizing its supplemental proposal. The comment period on the May 2019 proposal closed in August 2019. If the Bureau is planning to finalize the two proposals at the same time and issue one final rule, the latest extension of the comment period for the supplemental proposal is likely to further delay finalization of the May 2019 proposal.
State emergency SOL actions. Over the past eight weeks, in response to the COVID-19 pandemic, approximately 30 states have taken emergency actions tolling, suspending, extending, or otherwise affecting statutes of limitations, including those that apply to debt collection. These actions come from a variety of sources—including state courts, governors, and legislatures, making them difficult to identify and track—and they vary widely in scope, timing, and effect. We have surveyed the available resources on these developments, and do not believe that a complete compilation of these actions is currently available.
State laws and the CFPB’s supplemental proposal that impose restrictions, disclosure requirements, and other obligations based on whether collection of the debt is barred by a statute of limitations have increased the importance of correctly determining whether or not a debt is time-barred. Ballard Spahr’s Consumer Financial Services Group is considering creating a nationwide survey of these emergency actions so that consumer lenders, debt collectors, and other stakeholders can have timely, accurate, and thorough knowledge to inform their evaluation of risks and options. We anticipate offering this survey at a fixed fee and providing a subsequent update as part of the same fee. For more information, please contact Mindy Harris at email@example.com.