With every rule, there is always an exception and the Consumer Financial Protection Bureau’s debt collection rule, known officially as Regulation F, is no different. When it comes to everything that John Bedard of Bedard Law Group has been talking about recently in episodes of “You Wanted a Rule, You Got a Rule” with respect to the information that will have to be included in validation notices that are sent out to consumers once the rule goes into effect on November 30, there is an exception. Collectors who are collecting on certain types of residential mortgage loans do not have to provide some of the validation information that is required and instead can use other disclosures that are made during the course of servicing that mortgage. Here is John to explain more:
Essentially, what this provision of the rule is saying is that instead of having to try to determine the itemization date for a residential mortgage loan, which can be complex, collectors can substitute a disclosure that is required to be made under the Truth in Lending Act as long as that information is included in the same communication as the rest of the validation information that is required to be made.
“The Bureau says ‘Look, debt collector, we’re going to allow you to substitute the amount of the debt and the itemization date since the itemization date. You don’t have to provide that to consumers. If what you provide instead, is the last periodic statement that the consumer receives because that actually provides a lot more information to a consumer than this Regulation F requires in validation notices,’ Bedard says in the episode. “And so, if a debt collector is going to do that, the Bureau says, they must include a reference to that additional information, where the itemization information would otherwise appear on the letter.”
Check out all the episodes in the series here: You Wanted a Rule, You Got a Rule. You will also find links on that page to subscribe to the audio version of the series through Apple Podcasts, Google Podcasts, and Spotify. Like what you see? Be sure to reach out to John
