The CFPB issued a proposal today that would extend by 60 days the effective date of Part I and Part II of its final debt collection rule issued in, respectively, October 2020 and December 2020.  Comments on the proposal will be due no later than 30 days after the date it is published in the Federal Register.

The debt collection rule (Parts I and II) is scheduled to take effect on November 30, 2021.  The CFPB’s proposal would extend the effective date to January 29, 2022.

In addition to requesting comment on whether to extend the final rule’s effective date and whether 60 days is the appropriate amount of time for an extension, the CFPB requests comment on whether it would facilitate implementation to retain the November 30 effective date for some or all of the final rule’s safe harbors.  In its discussion, the CFPB observes that to the extent the final rule establishes a safe harbor from liability for certain conduct, or a presumption that certain conduct complies with or violates the rule, those safe harbors and presumptions will not take effect until the effective date.  Accordingly, as an example of the information it seeks, the CFPB asks for comment on the costs and benefits of allowing debt collectors to obtain a safe harbor by using the CFPB’s model validation notice as of November 30 even if the final rule does not otherwise take effect until January 29, 2022.

To explain why it has issued the proposal, the CFPB points to the disruption caused by the COVID-19 pandemic.  It indicates that, due to this disruption, an extension to allow stakeholders additional time to review and implement the final rule may be warranted.

While the CFPB does not suggest in its discussion of the proposal that it may also consider substantive changes to the rule, that remains a possibility.  For example, we would not be surprised if consumer advocates argue that the CFPB should not only reconsider the final rule’s effective date in light of the pandemic but should also consider whether the pandemic’s effects warrant reconsideration of certain substantive provisions of the final rule.  A delay in the effective date may create more opportunity for the Bureau to propose substantive changes to the rule.