The Consumer Financial Protection Bureau (CFPB) has published the final rules that modify the Fair Debt Collection Practices Act. These rules amend Regulation F, 12 CFR part 1006, which implements the FDCPA.

If you really want to take a deep dive into the changes, read CFPB Updates Fair Debt Collection Practices Act – What You Need to Know.

I did find some interesting commentary about debt settlement in the final rules.

“FDCPA section 805(b) specifies exceptions to the general prohibition against a debt collector communicating with third parties, including that a debt collector may engage in an otherwise prohibited communication with the prior consent of the consumer given directly to the debt collector. The Bureau proposed § 1006.6(d)(2) to implement the exceptions in FDCPA section 805(b) and generally restate the statute, with minor wording and organizational changes for clarity.253 In relevant part, proposed § 1006.6(d)(2)(ii) would have implemented the statutory exception permitting third-party communications with a person when the debt collector has received prior consent directly from the consumer for such communications.

One industry commenter suggested that the Bureau clarify that prior consent under proposed § 1006.6(d)(2)(ii) includes consent the consumer gives to a third party to discuss debts with a debt collector. This commenter explained that, in some cases, a debt collector may receive from a debt settlement company an authorization signed by a consumer permitting the debt collector to communicate about a debt with the debt settlement company.

The Bureau declines to clarify the prior consent exception as requested because the scenario posed by the commenter will depend upon the specific facts and circumstances as to whether the consent provided satisfies § 1006.6(d)(2)(ii) [“(ii) With the prior consent of the consumer given directly to the debt collector“]. The Bureau therefore is finalizing § 1006.6(d)(2) as proposed to provide that the prohibition in § 1006.6(d)(1) does not apply when a debt collector communicates, in connection with the collection of any debt, with a person: (i) For the purpose of acquiring location information, as provided in § 1006.10; (ii) with the prior consent of the consumer given directly to the debt collector; (iii) with the express permission of a court of competent jurisdiction; or (iv) as reasonably necessary to effectuate a post-judgment judicial remedy.

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The Bureau proposed comment 6(d)(2)–1 to refer to the commentary to proposed § 1006.6(b)(4)(i) for guidance concerning a consumer giving prior consent directly to a debt collector. The Bureau received no comments on comment 6(d)(2)–1 and is finalizing it as proposed.”

Credit Counselors Exempt

The final rule also specifically labels consumer credit counseling as exempt from the definition of debt collector. “Any nonprofit organization that, at the request of consumers, performs bona fide consumer credit counseling and assists consumers in liquidating their debts by receiving payment from such consumers and distributing such amounts to creditors.”

Interestingly, it would appear that other forms of debt relief like settlement, validation, or some crazy approach could be defined as a debt collector in the final rule since the practices are not specifically exempt.

You could make the argument that helping someone repay the debt by acting as an intermediary is assisting in the collection of the debt.

The final rules state:

“Debt collector means any person who uses any instrumentality of interstate commerce or mail in any business the principal purpose of which is the collection of debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due, or asserted to be owed or due, to another. Notwithstanding paragraph (i)(2)(vi) of this section, the term debt collector includes any creditor that, in the process of collecting its own debts, uses any name other than its own that would indicate that a third person is collecting or attempting to collect such debts. For purposes of § 1006.22(e), the term also includes any person who uses any instrumentality of interstate commerce or mail in any business the principal purpose of which is the enforcement of security interests.”

You can read the full published document below.