On April 16, 2021, the Consumer Financial Protection Bureau (CFP) issued a new pandemic-related Interim Rule applicable to those who act as “debt collectors.” The Interim Rule goes into effect on May 3, 2021. The CFP Interim Rule amends Regulation F, which implements the Fair Debt Collection Practices Act (FDCPA), by requiring a new form of notice from the debt collector in connection with the eviction moratorium for non-payment of rent issued by the Center for Disease Control and Prevention (CDC) in response to the COVID-19 pandemic. The CDC Order is currently in effect until June 30, 2021 and the Interim Rule is effective while the CDC Order is in effect, including any extension thereof.
Generally, the CFP Interim Rule requires debt collectors to provide written notice to tenants/residents of their protections under the CDC Order/eviction moratorium for nonpayment of rent and clarifies that certain misrepresentations are prohibited.
Under the FDCPA, a debt collector is any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, which would include residential rents, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another. Based on the definition of a debt collector under the FDCPA, any management company, attorney or others engaged on behalf of owners/landlords to collect unpaid residential rent would be considered a debt collector. The Interim Rule notes that the failure of debt collectors to disclose the protections of the CDC Order can violate the FDCPA. Further, the Interim Rules calls out acts by debt collectors that, by interfering with consumers’ ability to protect themselves from eviction pursuant to the CDC Order, undermine the purpose of the CDC Order to prevent the spread of COVID-19.
Specifically, the CFP Interim Rules requires that if a resident/tenant does NOT provide an executed Declaration pursuant to the CDC Order and there is a possible eviction for nonpayment of rent, the management company, attorney or other acting on behalf of the owner/landlord must:
- In the earliest of any “eviction notice,” being the earliest of any written notice that the laws of any State or locality requires to be provided to a resident/tenant before an eviction action against the resident/tenant may be filed and if no “eviction notice” is required by a State or locality, on the date that the eviction action is filed, provide the following disclosure: “Because of the global COVID-19 pandemic, you may be eligible for temporary protections from eviction under the laws of your State, territory, locality, or tribal area, or under Federal law. Learn the steps you should take now: visit cfpb.gov/eviction or call a housing counselor at 800-569-4287.”
- The Disclosure must:
- Be in writing (Disclosure CANNOT be provided electronically) and provided at least once;
- Be clearly and conspicuously stated so as to be readily noticeable and legible to residents/tenants (although no minimum type size is mandated);
- Be delivered to the address that is the subject of the eviction proceedings (although a party is not required to ensure the resident/tenant actually receives the Disclosure); and
- While not required, it is recommended the Disclosure be provided even in States and localities where residential evictions provide for the same or greater level of public-health protections than the CDC Order.
- The Disclosure must:
Please note, while the written disclosure is not required for a resident/tenant that is not reasonably eligible to be covered by the CDC Order, it is recommended that the written disclosure be provided to all residents/tenants who have not provided the CDC Declaration and in the earliest “eviction notice” before an eviction action is filed.
Finally, the CFP Interim Final rule expressly prohibits a debt collector (any management company, attorney or other acting on behalf of an owner or landlord) from falsely representing or implying to a resident/tenant that the resident/tenant is ineligible for temporary protection from eviction under the CDC Order.
All property management companies, eviction attorneys or others acting on behalf of property owners/landlords, must ensure the CFP Interim Rule Disclosure is being provided in writing to tenants/residents prior to eviction for nonpayment of rent in accordance with the CFP Interim Rule and at the earliest possible “eviction notice” to the resident/tenant. This added disclosure must be provided until the CDC Order is no longer in effect.