The CFPB has issued an interim final rule that requires “debt collectors” as defined under the FDCPA who seek to evict tenants for non-payment of rent to provide written notice to tenants of their rights under the Centers for Disease Control and Prevention (CDC) Order that establishes an eviction moratorium. The interim rule also prohibits FDCPA debt collectors from misrepresenting tenants’ eligibility for protection from eviction under the moratorium. The rule becomes effective on May 3, 2021 and comments on the rule must be submitted by May 7, 2021.
In its discussion of the rule, the CFPB states that the rule is based on its interpretation of FDCPA sections 807 and 808. Those sections, respectively, prohibit a debt collector from using false, deceptive, or misleading representations or means to collect a debt and from using unfair or unconscionable means to collect a debt.
Disclosure requirement. The CDC Order generally prohibits a landlord, owner of a residential property, or other person with a legal right to pursue eviction (including an agent or attorney acting on behalf of a landlord or owner) from evicting tenants for non-payment of rent in any jurisdiction in which the Order applies during the effective period of the Order. The CDC Order has been extended three times, most recently through June 30, 2021. To be eligible for the moratorium, a tenant must submit a written declaration attesting to certain eligibility criteria generally establishing that, because of the tenant’s financial situation, the tenant is unable to afford full rental payments and would likely become homeless or have to move into a shared living setting if evicted.
The rule prohibits a FDCPA debt collector from filing an eviction action for non-payment of rent against a consumer to whom the CDC Order may reasonably apply without disclosing that the consumer may be eligible for temporary protection from eviction under the CDC Order. The disclosure must be clear and conspicuous and in writing and must be provided on the date the FDCPA debt collector provides the consumer with an eviction notice or, if no eviction notice is required by law, on the date the eviction notice is filed. A FDCPA debt collector can provide the notice even if the consumer might not be covered by the CDC Order. The commentary to the rule includes sample disclosure language that a FDCPA debt collector can use to comply with the rule’s requirement. A violation of the disclosure requirement is deemed a violation of FDCPA Section 808.
The CFPB notes in its discussion of the rule that a large number of states and localities have adopted their own eviction moratoria. It states that in light of this, the Bureau has not made a finding in the interim rule that it is unfair or deceptive under the FDCPA for a debt collector in a jurisdiction in which such a moratorium applies to file an eviction action against a consumer without disclosing that moratorium to the consumer. However, the Bureau also states that nevertheless, a FDCPA debt collector’s failure to disclose such information to a consumer could violate the FDCPA’s prohibition on deception or unfairness (or both), particularly if the state or local law offers greater protection than the CDC Order. The CFPB indicates that providing a disclosure using the alternate sample language in the rule “likely cures any deception or unfairness under FDCPA sections 807 or 808 that would arise from the failure to disclose a more protective [state or local law].” It also indicates that nothing in the rule’s disclosure requirement affects a debt collector’s obligation to provide any moratorium-related disclosure required by state r local law.
A landlord would generally not be directly subject to the rule because a landlord is typically not a “debt collector” covered by the FDCPA. However, it is possible the rule could influence how a state regulator or court might apply a state debt collection law that applies more broadly to creditors and incorporates FDCPA prohibitions.
False representations. The rule prohibits a debt collector covered by the FDCPA from falsely representing or implying that a consumer is ineligible for protection from eviction under the CDC Order. A violation of this prohibition is deemed a violation of FDCPA Section 807.