An Intro to the FDCPA Amendment: Understanding CFPB Proposed Rules
As the regulatory agency overseeing all consumer financial products and services, the Consumer Financial Protection Bureau (CFPB) has major influence over how data furnishers issue credit and service debt.
That’s why we are sharing some thoughts on the latest proposed CFPB rules and, specifically, how they may impact you and your dispute policies.
Fair Debt Collection Practices Act
On May 7, the CFPB issued a Notice of Proposed Rulemaking (NPRM) to amend the Fair Debt Collection Practices Act (FDCPA), originally issued in 1977. The bureau will accept comments until September 18, and then submit the final rules in the following 60 days. The industry will have approximately one year to prepare before the rules go into effect.
The CFPB attempted to balance the mandate to protect consumers and modernize debt collection and reporting, including the dispute process. As it relates to Sonnet, the CFPB has proposed rules that require data furnishers to 1) Provide new methods for consumers to dispute a debt, and 2) Modify procedures for investigating and responding back to the consumer.
How It Impacts You
While the FDCPA specifically applies to debt collectors, the CFPB proposed debt collection rules will impact both first- and third-party data furnishers and how they are accountable to each other.
This specifically relates to CFPB’s proposed Validation Notice, which we’ll cover in the next blog post, along with how Sonnet can help you adapt to the workflow changes.
Meet CFPB Compliance with Sonnet
Sonnet, Palinode’s automated credit dispute resolution system, supports compliance with the current FCRA regulations and CFPB’s proposed rules by helping data furnishers streamline credit dispute investigations. It integrates with both direct and indirect dispute workflows, allowing you to manage higher dispute volumes by consolidating data from e-OSCAR, your system of record, and other required sources for more nuanced logic, workflow, and documentation.
Want to know more? Request a demo and our team will walk you through all the system features.