The Office of the Comptroller of the Currency, in conjunction with the Federal Financial Institutions Examination Council, on Thursday released revised procedures for how its examiners will examine financial institutions for their compliance with the Fair Debt Collection Practices Act, incorporating the changes from Regulation F into their review.
A copy of the revised procedures can be accessed by clicking here.
The procedures provide insight into the different sections and sub-sections of Regulation F, covering communications, prohibited practices, validating debts, and sending required disclosures. What makes the guidance helpful is that it provides examples and plain-English descriptions of what is covered in each section of the rule, while also including the language in Regulation F.
In issuing the new interagency guidance, the OCC — which regulates national banks — announced it was rescinding the “Fair Debt Collection Practices Act” section of the “Other Consumer Protection Laws and Regulations” booklet of the Comptroller’s Handbook. Examiners for the OCC will rely on this new interagency guidance going forward, the OCC announced. The FFIEC is composed of five different banking regulators — the OCC, the Federal Deposit Insurance Corp., the National Credit Union Administration, the Consumer Financial Protection Bureau, and the Federal Reserve Board of Governors.
Given that the guidance is being used when examining national banks — which are not always covered under the FDCPA — the OCC lays out a number of examples intended to illustrate the definition of debt collector, including:
- An institution’s principal business purpose is the collection of debts. The institution is a debt collector, assuming it uses any instrumentality of interstate commerce or mail.
- An institution regularly collects debts owed or due to another. The institution is a debt collector.
- An institution services loans owned by others. The loans placed for servicing regularly include loans that are in default when placed with the institution. The institution is a debt collector as to any debts that were in default at placement.
- An institution’s principal business purpose is the collection of debts it has purchased. The institution is a debt collector both when it contacts consumers itself and when it hires other collection agencies to do so, assuming it uses any instrumentality of interstate commerce or mail.
- An institution collects defaulted debts that the institution has purchased, but does not collect or attempt to collect, directly or indirectly, debts owed or due, or asserted to be owed or due, to another, and does not have a business the principal purpose of which is the collection of debts. The institution is not a debt collector.
- An institution originates loans. When any of its loans go into default, the institution attempts to collect them while using an assumed name. The name indicates that a third party is collecting the debt. The institution is a debt collector.
- An institution’s principal business purpose is the enforcement of security interests. The institution is a debt collector for purposes of 12 CFR 1006.22(e), assuming it uses any instrumentality of interstate commerce or mail. 12 CFR 1006.22(e) prohibits taking or threatening to take any nonjudicial action in certain circumstances, such as where there is no present right to possession through an enforceable security instrument.
