[Federal Register Volume 86, Number 76 (Thursday, April 22, 2021)]
[Rules and Regulations]
[Pages 21163-21181]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-08303]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 86, No. 76 / Thursday, April 22, 2021 / Rules
and Regulations
[[Page 21163]]
BUREAU OF CONSUMER FINANCIAL PROTECTION
12 CFR Part 1006
[Docket No. CFPB-2021-0008]
RIN 3170-AA41
Debt Collection Practices in Connection With the Global COVID-19
Pandemic (Regulation F)
AGENCY: Bureau of Consumer Financial Protection.
ACTION: Interim final rule; request for public comment.
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SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is
issuing this interim final rule to amend Regulation F, which implements
the Fair Debt Collection Practices Act (FDCPA) and currently contains
the procedures for State application for exemption from the provisions
of the FDCPA. The interim final rule addresses certain debt collector
conduct associated with an eviction moratorium issued by the Centers
for Disease Control and Prevention (CDC) in response to the global
COVID-19 pandemic. The interim final rule requires that debt collectors
provide written notice to certain consumers of their protections under
the CDC eviction moratorium and prohibit misrepresentations about
consumers' ineligibility for protection under such moratorium.
DATES: This interim final rule is effective on May 3, 2021. Comments
must be received on or before May 7, 2021.
ADDRESSES: You may submit comments, identified by Docket No. CFPB-2021-
0008, by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Email: [email protected]. Include Docket
No. CFPB-2021-0008 in the subject line of the message.
Hand Delivery/Mail/Courier: Comment Intake, Bureau of
Consumer Financial Protection, 1700 G Street NW, Washington, DC 20552.
Please note that due to circumstances associated with the COVID-19
pandemic, the Bureau discourages the submission of comments by hand
delivery, mail, or courier.
Instructions: The Bureau encourages the early submission of
comments. All submissions should include the agency name and docket
number for this rulemaking. Because paper mail in the Washington, DC
area and at the Bureau is subject to delay, and in light of
difficulties associated with mail and hand deliveries during the COVID-
19 pandemic, commenters are encouraged to submit comments
electronically. In general, all comments received will be posted
without change to https://www.regulations.gov. In addition, once the
Bureau's headquarters reopens, comments will be available for public
inspection and copying at 1700 G Street NW, Washington, DC 20552, on
official business days between the hours of 10 a.m. and 5 p.m. Eastern
Time. At that time, you can make an appointment to inspect the
documents by telephoning 202-435-7275.
All comments, including attachments and other supporting materials,
will become part of the public record and subject to public disclosure.
Proprietary information or sensitive personal information, such as
account numbers, Social Security numbers, or names of other
individuals, should not be included. Comments will not be edited to
remove any identifying or contact information.
FOR FURTHER INFORMATION CONTACT: Seth Caffrey, Courtney Jean, Adam
Mayle, Kristin McPartland, or Michael Silver, Senior Counsels, Office
of Regulations, at 202-435-7700 or https://reginquiries.consumerfinance.gov/. If you require this document in an
alternative electronic format, please contact
[email protected].
SUPPLEMENTARY INFORMATION:
I. Summary of the Interim Final Rule
The Bureau issues this interim final rule to address certain debt
collector conduct associated with an eviction moratorium issued by the
CDC. This interim final rule applies to debt collectors, as that term
is defined in the FDCPA. The FDCPA establishes broad consumer
protections and prohibits debt collectors from engaging in harassment
or abuse, making false or misleading representations, or engaging in
unfair practices in debt collection.
On March 29, 2021, the CDC extended an existing agency order that
imposes an eviction moratorium that generally limits the circumstances
in which certain persons may be evicted from residential property. The
Bureau is concerned that consumers are not aware of their protections
under the CDC Order's eviction moratorium and that FDCPA-covered debt
collectors may be engaging in eviction-related conduct that violates
the FDCPA.
This interim final rule amends Regulation F, which implements the
FDCPA, to require debt collectors to provide written notice to certain
consumers of their protections under the CDC Order's eviction
moratorium and to clarify that certain misrepresentations are
prohibited. More specifically, Sec. 1006.9 prohibits certain acts by
debt collectors that undermine the purpose and effectiveness of the CDC
Order's eviction moratorium to prevent the further spread of COVID-19.
Section 1006.9(a) and (b) sets forth the purpose and coverage of
subpart B and defines certain terms used in the subpart, and Sec.
1006.9(c) identifies the prohibited acts. The Bureau is adopting Sec.
1006.9 pursuant to its authority under FDCPA section 814(d) to write
rules with respect to the collection of debts by debt collectors and,
with respect to Sec. 1006.9(c), pursuant to its authority to interpret
FDCPA sections 807 and 808.
II. Background
A. The FDCPA
In 1977, Congress passed the FDCPA \1\ to eliminate abusive debt
collection practices by debt collectors, to ensure that those debt
collectors who refrain from using abusive debt collection practices are
not competitively disadvantaged, and to promote consistent State action
to protect consumers against debt collection abuses.\2\ The statute was
a response to ``abundant evidence of the use of abusive, deceptive, and
unfair debt collection practices by many debt
[[Page 21164]]
collectors.'' \3\ According to Congress, these practices ``contribute
to the number of personal bankruptcies, to marital instability, to the
loss of jobs, and to invasions of individual privacy.'' \4\ Among other
things, the FDCPA establishes broad consumer protections and prohibits
debt collectors from engaging in harassment or abuse,\5\ making false
or misleading representations,\6\ and engaging in unfair practices in
debt collection.\7\
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\1\ 15 U.S.C. 1692 et seq.
\2\ 15 U.S.C. 1692e.
\3\ 15 U.S.C. 1692a.
\4\ Id.
\5\ 15 U.S.C. 1692d.
\6\ 15 U.S.C. 1692e.
\7\ 15 U.S.C. 1692f.
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The FDCPA, in general, applies to debt collectors as that term is
defined under the statute.\8\ The Bureau has authority under the FDCPA
to prescribe substantive rules with respect to the collection of debts
by debt collectors.\9\ This interim final rule amends existing
Regulation F, 12 CFR part 1006.\10\
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\8\ The FDCPA generally provides that 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, or who regularly collects or attempts to
collect, directly or indirectly, debts owed or due or asserted to be
owed or due another.'' 15 U.S.C. 1692a(6). FDCPA section 803(6) also
sets forth several exclusions from the general definition. Id.
\9\ 15 U.S.C. 1692l(d).
\10\ Independent of this interim final rule, the Bureau has
published two final rules that revise Regulation F, 12 CFR part
1006, which implements the FDCPA. See 85 FR 76734 (Nov. 30, 2020);
86 FR 5766 (Jan. 19, 2021). The original effective date for these
final rules was November 30, 2021. Id. The Bureau has proposed
extending the effective dates for these final rules to January 29,
2022. See Bureau of Consumer Fin. Prot., CFPB Proposes Delay of
Effective Date for Recent Debt Collection Rules (Apr. 7, 2021),
https://www.consumerfinance.gov/about-us/newsroom/cfpb-proposes-delay-of-effective-date-for-recent-debt-collection-rules/.
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B. COVID-19 Pandemic and CDC Order
On January 31, 2020, the Department of Health and Human Services
declared a public health emergency for the entire United States to aid
the nation's healthcare community in responding to the 2019 novel
coronavirus (COVID-19) pandemic.\11\ By the end of August 2020, there
were over 5,500,000 COVID-19 cases identified in the United States and
over 174,000 deaths related to the disease.\12\
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\11\ Press Release, U.S. Dep't of Health & Human Servs.,
Secretary Azar Declares Public Health Emergency for United States
for 2019 Novel Coronavirus (Jan. 31, 2020), https://www.hhs.gov/about/news/2020/01/31/secretary-azar-declares-public-health-emergency-us-2019-novel-coronavirus.html.
\12\ 85 FR 55292, 55292 (Sept. 4, 2020).
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On September 4, 2020, the CDC published an agency order (CDC Order
or Order) entitled ``Temporary Halt in Residential Evictions To Prevent
the Further Spread of COVID-19.'' \13\ Citing the historic threat to
public health posed by the COVID-19 pandemic, the CDC, pursuant to
section 361 of the Public Health Service Act, issued an eviction
moratorium that generally limits the circumstances in which certain
persons may be evicted from residential property.\14\ According to the
CDC, eviction moratoria help protect public health in several ways.
First, eviction moratoria encourage self-isolation by people who become
ill or who are at risk for severe illness from COVID-19 due to an
underlying medical condition.\15\ Second, eviction moratoria allow
State and local authorities to more easily implement stay-at-home and
social distancing directives to mitigate the community spread of COVID-
19.\16\ Third, eviction moratoria limit the likelihood of individuals
moving into close quarters in congregate or shared living settings,
such as homeless shelters, which then puts individuals at higher risk
of contracting COVID-19.\17\
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\13\ Id.
\14\ See id.; see also 42 U.S.C. 264 and its implementing
regulation 42 CFR 70.2.
\15\ 86 FR 16731, 16733 (Mar. 31, 2021).
\16\ Id.
\17\ Id. at 16734.
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The CDC Order initially was set to expire on December 31, 2020.\18\
The CDC Order has been extended three times and currently is set to
expire on June 30, 2021.\19\ In the most recent extension on March 29,
2021, the CDC emphasized the continued threat to public health posed by
COVID-19. The CDC stated that, as of March 25, 2021, over 29,700,000
cases had been identified in the United States and there were over
540,000 deaths due to the disease.\20\ Further, the CDC stated that,
although transmission of COVID-19 has decreased since a peak in January
2021, the number of cases per day has remained almost twice as high as
the initial peak in April 2020 and transmission rates are similar to
the second peak in July 2020.\21\ The CDC stated in its most recent
extension of the Order that despite higher rates of vaccine coverage,
the relaxing of community mitigation efforts may continue to expose
vulnerable populations to higher-than-average infection rates.\22\ The
Order also described the global emergence of new variants of the virus
that studies have shown are more easily transmitted and may increase
mortality.\23\
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\18\ 85 FR 55292, 55297 (Sept. 4, 2020).
\19\ Section 502 of title V, Division N of the Consolidated
Appropriations Act, 2021, Public Law 116-260, 134 Stat. 1182, 2078
(2020), extended the original Order until January 31, 2021. On
January 29, 2021, following an assessment of the ongoing pandemic,
the CDC Director renewed the CDC Order until March 31, 2021. 86 FR
8020 (Feb. 3, 2021). On March 29, 2021, the CDC Director extended
the CDC Order until June 30, 2021. 86 FR 16731 (Mar. 31, 2021).
\20\ Id. at 16732.
\21\ See id.
\22\ See id. at 16732-33.
\23\ See id.
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The CDC Order generally prohibits a landlord, owner of a
residential property, or other person with a legal right to pursue
eviction or possessory action from evicting for non-payment of rent any
person protected by the CDC Order \24\ from any residential property in
any jurisdiction in which the CDC Order applies.\25\ This prohibition
applies, without limitation, to an agent or attorney acting on behalf
of a landlord or owner of the residential property.\26\ To be a
``covered person'' under the CDC Order's eviction moratorium, a person
must submit a written declaration under penalty of perjury attesting to
certain eligibility criteria generally establishing that, because of
the person's financial situation, the person is unable to make full
rental payments and, if evicted, likely would become homeless or would
be required to move into a congregate or shared living setting.\27\
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\24\ The CDC Order defines those individuals who are covered by
the CDC Order as ``covered persons,'' but this interim final rule
generally refers to such persons as ``persons protected by the CDC
Order'' for simplicity.
\25\ Id. at 16732 n.3.
\26\ Id.
\27\ Id. at 16734.
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The CDC Order defines ``evict'' and ``eviction'' as any action by a
landlord or owner of a residential property--which also includes an
agent or attorney acting on behalf of the landlord or the owner of the
residential property--or any other person with a legal right to pursue
eviction or a possessory action, to remove or cause the removal of a
person protected by the CDC Order from a residential property.\28\ The
CDC Order does not cover foreclosure on a home mortgage.\29\ The CDC
Order does not apply in any State, local, territorial, or tribal area
with a moratorium on residential evictions that provides the same or
greater level of public-health protection than the requirements listed
in the CDC Order.\30\ Moreover, the CDC Order does not preclude
evictions unrelated to the non-payment of rent.\31\
[[Page 21165]]
The CDC Order does not bar a landlord, residential property owner, or
their representative, including an attorney, from filing an eviction
action in court, but it does prohibit the physical removal of a person
from the property if the person meets the criteria and submits the
declaration.\32\ Since the person must file a declaration to obtain
this protection, however, a person must first be aware that the CDC
Order exists and may apply to them.
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\28\ Id. at 16732.
\29\ Id.
\30\ Id. at 16736.
\31\ Specifically, the CDC Order does not preclude evictions
based on a tenant, lessee, or resident: (1) Engaging in criminal
activity while on the premises; (2) threatening the health or safety
of other residents; (3) damaging or posing an immediate and
significant risk of damage to property; (4) violating any applicable
building code, health ordinance, or similar regulation relating to
health and safety; or (5) violating any other contractual
obligation, other than the timely payment of rent or similar
housing-related payment (including non-payment or late payment of
fees, penalties, or interest). Id. at 16733.
\32\ Centers for Disease Control & Prevention, FREQUENTLY ASKED
QUESTIONS (Apr. 13, 2021), https://www.cdc.gov/coronavirus/2019-ncov/downloads/Eviction-Moratoria-Order-FAQs-02012021-508.pdf (CDC
Order FAQs).
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To respond to the public health threat posed by the COVID-19
pandemic, Federal, State, and local governments have taken a variety of
actions, including restrictions on travel, stay-at-home orders, and
mask requirements.\33\ In addition to the CDC Order's eviction
moratorium, governments have established other eviction moratoria to
alleviate the economic and public health consequences of the COVID-19
pandemic. For instance, section 4024 of the Coronavirus Aid, Relief,
and Economic Security Act (CARES Act) \34\ provided a temporary
moratorium on eviction filings as well as other protections for tenants
in certain rental properties with Federal assistance or federally
related financing. State and local governments have also implemented
temporary eviction moratoria, rent freezes, and rental assistance
programs.\35\
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\33\ 86 FR 16731, 16733 (Mar. 31, 2021).
\34\ CARES Act section 4024, Public Law 116-136, 134 Stat. 281,
492 (2020).
\35\ See, e.g., Eviction Lab, COVID-19 HOUSING POLICY SCORECARD,
https://evictionlab.org/covid-policy-scorecard/ (last visited Apr.
1, 2021); U.S. Dep't of the Treasury, Emergency Rental Assistance
Program, https://home.treasury.gov/policy-issues/cares/emergency-rental-assistance-program (last visited Apr. 1, 2021); Perkins Coie
LLP, COVID-19 Related Eviction and Foreclosure Orders/Guidance 50-
State Tracker (Mar. 29, 2021), https://www.perkinscoie.com/en/news-insights/covid-19-related-eviction-and-foreclosure-ordersguidance-50-state-tracker.html.
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In the wake of the COVID-19 pandemic, the Bureau has taken numerous
steps to protect and assist consumers facing possible eviction and
housing insecurity.\36\ On March 29, 2021, the Bureau's Acting Director
and the Federal Trade Commission's Acting Chairwoman issued a joint
statement regarding their agencies' work to help stop illegal evictions
and protect American consumers facing economic hardship due to COVID-
19.\37\ This interim final rule aims to complement this and other
efforts the Bureau has initiated since the onset of the COVID-19
pandemic to assist consumers and to protect those most vulnerable to
harms arising from violations of Federal consumer financial protection
law.
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\36\ See generally Bureau of Consumer Fin. Prot., Help for
homeowners and renters during the coronavirus national emergency,
https://www.consumerfinance.gov/coronavirus/mortgage-and-housing-assistance/ (updated Mar. 25, 2021); and Protections for renters
during COVID-19, https://www.consumerfinance.gov/coronavirus/mortgage-and-housing-assistance/rent-protections-covid-19 (last
visited Apr. 10, 2021). On April 5, 2021, the Bureau issued a notice
of proposed rulemaking to amend Regulation X to establish a
temporary COVID-19 emergency pre-foreclosure review period until
December 31, 2021, for principal residences to help ensure that
borrowers affected by the COVID-19 pandemic have an opportunity to
be evaluated for loss mitigation before the initiation of
foreclosure. 86 FR 18840 (Apr. 9, 2021).
\37\ Press Release, Bureau of Consumer Fin. Prot., CFPB Acting
Director Uejio & FTC Acting Chairwoman Slaughter Issue Joint
Statement on Preventing Illegal Evictions (Mar. 29, 2021), https://www.consumerfinance.gov/about-us/newsroom/cfpb-acting-director-uejio-and-ftc-acting-chairwoman-slaughter-issue-joint-statement-on-preventing-illegal-evictions/.
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C. Rental Evictions and Debt Collectors
When a consumer becomes delinquent on rental payments, landlords,
residential property owners, or their agents (which may include
attorneys acting on their behalf) typically seek to bring the
consumer's account current. Landlords, residential property owners, or
their agents may engage in oral or written communication with tenants
and may arrange payment schedules or reduced payments.\38\ The Bureau
understands that a significant number of landlords and residential
property owners hire debt collectors for pre-eviction collections.
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\38\ This interim final rule generally uses the terms ``tenant''
and ``renter'' interchangeably.
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If efforts to resolve the unpaid rent are not successful, a
landlord, residential property owner, or their agent may seek to evict
the tenant from the property. In order to remove a tenant from the
property through legal process, the landlord, residential property
owner, or their agent typically must first provide notice to the tenant
of their intent to evict and, if the tenant does not bring the account
current or leave the premises, then file an eviction action in court,
often with a claim of back rent. These eviction processes are governed
primarily by State or local law. While some landlords or residential
property owners may represent themselves in court, the Bureau
understands that a large segment of landlords or residential property
owners hire an attorney to conduct eviction proceedings on their
behalf.\39\
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\39\ Eric. S. Peterson & Cathy McKitrick et al., Landlords evict
hundreds of Utah renters each month despite a ban during the
pandemic, The Salt Lake Tribune (Dec. 12, 2020), https://www.sltrib.com/news/2020/12/12/landlords-evict-hundreds/ (finding
that in August 2020, nearly two-thirds of eviction filings in Utah
appear to have been filed by one law firm) (Peterson & McKitrick);
Bob Ivry, Down and Out in Eviction Court, The American Prospect
(Mar. 18, 2021), https://prospect.org/infrastructure/housing/down-and-out-in-eviction-court/ (``Philadelphia landlords were
represented by legal counsel in 82 percent of eviction cases from
2015 to 2020, according to a study by Community Legal Services . . .
. In Kansas City, 1.3 percent of tenants were represented from 2006
to 2016, while 84 percent of landlords had lawyers, according to the
KC Eviction Project.'') (Ivry).
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FDCPA section 803(5) defines ``debt'' as any obligation or alleged
obligation of a consumer to pay money arising out of a transaction in
which the money, property, insurance or services which are the subject
of the transaction are primarily for personal, family, or household
purposes, whether or not such obligation has been reduced to judgment.
A consumer's unpaid residential rent would typically fall within the
FDCPA's definition of debt because it is an obligation of a consumer to
pay money arising out of a transaction for personal, family, or
household purposes. FDCPA section 803(6) generally defines ``debt
collector'' as 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, or who regularly collects or attempts to
collect, directly or indirectly, debts owed or due or asserted to be
owed or due another.\40\ Attorneys who regularly engage in debt
collection activity, even when that activity consists of litigation,
are debt collectors as defined in the FDCPA.\41\ Therefore, attorneys
who engage in eviction proceedings on behalf of landlords or
residential property owners to collect unpaid residential rent may be
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``debt collectors'' as defined by the FDCPA.\42\
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\40\ FDCPA section 803(6)'s definition of ``debt collector''
also includes any creditor who, in the process of collecting its own
debts, uses any name other than the creditor's own which would
indicate that a third person is collecting or attempting to collect
such debts.
\41\ See Heintz v. Jenkins, 514 U.S. 291, 299 (1995) (holding
that ``attorneys who `regularly' engage in consumer-debt-collection
activity'' are subject to the FDCPA, ``even when that activity
consists of litigation''). In reaching this conclusion, the Supreme
Court discussed the history of the FDCPA, which contained an express
exemption for lawyers until Congress repealed the exemption in its
entirety in 1986 ``without creating a narrower, litigation-related
exemption to fill the void.'' Id. at 294-95.
\42\ According to the National Creditors Bar Association, 52
percent of their members practice in the area of landlord and tenant
law, https://www.creditorsbar.org/about-ncba (last visited Apr. 3,
2021) (NCBA).
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D. COVID-19 Pandemic Impacts on Renters, Evictions, and Debt Collectors
The COVID-19 pandemic has had extraordinarily widespread and
adverse effects on the economy. Since the start of the COVID-19
pandemic, employment has fallen dramatically in response to public
health measures and diminishing consumer demand.\43\ Renters have been
particularly impacted by these economic trends. Renters are more likely
than homeowners to have become unemployed or experienced decreasing
income during the COVID-19 pandemic.\44\ In addition, renters tend to
have less savings than homeowners and are therefore more vulnerable to
economic shocks.\45\ By the end of 2020, 8.8 million rental households
were behind in their rental obligations.\46\ The average delinquent
rental household owed more than $5,000.\47\ Even as the economy and the
labor market have begun to improve in 2021, substantial rental debt
remains.\48\
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\43\ Lauren Bauer & Kristen Broady et al., Ten facts about
COVID-19 and the U.S. economy, Brookings Inst. (Sept. 17, 2020),
https://www.brookings.edu/research/ten-facts-about-covid-19-and-the-u-s-economy/.
\44\ JPMorgan Chase Inst., Renters v. Homeowners: Income and
Liquid Asset Trends during COVID-19, (Mar. 2021), https://www.jpmorganchase.com/institute/research/household-debt/renters-homeowners-income-and-liquid-asset-trends-during-covid-19.
\45\ Id.
\46\ Bureau of Consumer Fin. Prot., Housing insecurity and the
COVID-19 pandemic, at 17 (Mar. 2021), https://files.consumerfinance.gov/f/documents/cfpb_Housing_insecurity_and_the_COVID-19_pandemic.pdf (CFPB Housing
Insecurity Report).
\47\ Id. at 17.
\48\ The Federal Reserve Bank of Philadelphia estimated that
renters owed $11 billion in rent in March 2021. See Federal Reserve
Bank of Philadelphia, Household Rental Debt During COVID-19: UPDATE
FOR 2021, at 8 (Mar. 2021), https://www.philadelphiafed.org/community-development/housing-and-neighborhoods/household-rental-debt-during-covid-19-update-for-2021 (Household Rental Debt During
COVID-19); see also Urban Inst., Many People are Behind on Rent. How
Much Do They Owe? (Feb. 24, 2021), https://www.urban.org/urban-wire/many-people-are-behind-rent-how-much-do-they-owe (analyzing three
estimates of back rent owed by U.S. households in January 2021 that
ranged from $8.4 billion to $52.6 billion).
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The COVID-19 pandemic, furthermore, has disproportionately impacted
the housing security of minority and low-income households. Black and
Hispanic households have been significantly more likely than other
types of households to accrue rental debt.\49\ As of December 2020,
households with incomes below $75,000 were more than twice as likely to
be behind on rental obligations than households with incomes above
$75,000.\50\
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\49\ As of December 2020, Black and Hispanic households were
more than twice as likely to report being behind on their rental
payments as White households. See U.S. Census Bureau, Census
Household Pulse Survey, Week 21 (December 9-December 21) (Jan. 6,
2021), https://www.census.gov/data/tables/2020/demo/hhp/hhp21.html
(Census Household Pulse Survey). As of March 2021, 7.8 percent of
Hispanic/Latino households and 5.8 percent of Black households had
rental debt, compared to 4.4 percent of White households. See
Household Rental Debt During COVID-19, supra note 48, at 8.
\50\ Census Household Pulse Survey, supra note 49.
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Individuals and families who are at risk of losing their housing
because of delinquent rent face dire personal and financial
consequences. As the Bureau explained in the CFPB Housing Insecurity
Report, families that do not have access to safe, affordable, and
stable housing (also referred to as housing insecurity) face the
prospects of homelessness as well as a host of other negative outcomes,
such as higher rates of depression, higher rates of suspension and
expulsion from school, and increased risks of chronic health
conditions. In the midst of a global pandemic, housing insecurity can
make it difficult for renters to comply with public health measures
such as quarantining or restricting the number of close contacts.\51\
Federal, State, and local eviction moratoria have slowed the pace of
evictions, but thousands of renters are still evicted weekly.\52\
According to the CFPB Housing Insecurity Report, as of December 2020, 9
percent of renters reported that it was likely they would be evicted in
the next two months.\53\ Approximately 16 percent of Black renters and
11 percent of Hispanic renters who were surveyed expressed this
belief.\54\ Data on eviction rates also suggests that minority renters
are particularly vulnerable to eviction.\55\
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\51\ CFPB Housing Insecurity Report, supra note 46, at 3.
\52\ Id. at 14.
\53\ Id. at 15. This finding is consistent with other research
on consumers' views about housing precarity. According to a study by
the Mortgage Bankers Association, 2.3 million tenants said they feel
at risk of eviction or would be forced to move in the next 30 days.
Mortg. Bankers Ass'n, MBA RIHA Study Reveals Progress, but 5 Million
Renters and Homeowners Missed December Payments (Feb. 8, 2021),
https://www.mba.org/2021-press-releases/february/mba-riha-study-reveals-progress-but-5-million-renters-and-homeowners-missed-december-payments.
\54\ CFPB Housing Insecurity Report, supra note 46, at 15.
\55\ Reinvestment Fund, Evictions in Philadelphia: Race (and
Place) Matters, at 2 (Feb. 2021), https://www.reinvestment.com/wp-content/uploads/2021/02/ReinvestmentFund_PHL-Evictions-Race-and-Place-Matters.pdf (between 2018 and 2019, Black and Hispanic
Philadelphians experienced an annual eviction filing rate of 8.8
percent and 5.2 percent, respectively, compared to 3.1 percent of
White Philadelphians); Jane Place Neighborhood Sustainability
Initiative, Unequal Burden, Unequal Risk: Households Headed by Black
Women Experience Highest Rates of Eviction, at 6, http://www.jpnsi.org/evictions (last visited Apr. 1, 2021) (from September
2019 to March 2020, 82.2 percent of tenants facing evictions in New
Orleans were Black).
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In addition to formal evictions, informal evictions can occur
outside the judicial eviction process. Evidence suggests that informal
evictions may be common.\56\ Tenants may preemptively move out of
rental housing to avoid an eviction filing, which may have negative
consequences for the tenant whether or not the filing ultimately leads
to physical removal.\57\ Tenants may take this preemptive step, for
example, to prevent the mere possibility of having an eviction judgment
on their records because subsequent landlords may refuse to rent to
tenants with an eviction history. This practice is sometimes referred
to as ``self-eviction.'' \58\ Such
[[Page 21167]]
losses of rental housing may be comparable to evictions from the
perspective of consumers, even if they are not evident in eviction
filing statistics. Moreover, preliminary findings from one university
research study indicate that informal evictions have increased during
the COVID-19 pandemic, including situations where renters received
texts, emails, or verbal communication from landlords telling them to
leave; arrived home to find their doors locked or possessions removed;
or moved even though they recognized their legal right to challenge the
landlord's action, out of fear that the landlord would make their
living situation difficult if they refused to leave.\59\
---------------------------------------------------------------------------
\56\ See Matthew Desmond & Tracey Shollenberger, Forced
Displacement From Rental Housing: Prevalence and Neighborhood
Consequences, Demography, vol. 52, no. 5, at 1751-72 (Aug. 2015),
www.jstor.org/stable/43697545 (survey in Milwaukee between 2011 and
2013 found that informal evictions were twice as frequent as formal
evictions) (Desmond & Shollenberger); Sophie Collyer & Lily Bushman-
Copp, Forced Moves and Eviction in New York City, Robin Hood (May
2019), https://www.robinhood.org/uploads/2019/08/HOUSING-REPORT_8.5.pdf (study found that half of evictions in New York City
resulted from forced moves, which include informal evictions).
\57\ Desmond & Shollenberger, supra note 56, at 1751-72; Hous.
Action Ill. & Lawyers' Comm. for Better Hous., Prejudged: The Stigma
of Eviction Records (Mar. 2018), https://lcbh.org/sites/default/files/resources/Prejudged-Eviction-Report-2018.pdf; Reinvestment
Fund, Resolving Landlord-Tenant Disputes: An Analysis of Judgments
by Agreement in Philadelphia's Eviction Process (May 2020), https://www.reinvestment.com/wp-content/uploads/2020/05/ReinvestmentFund_Report-2020_PHL-Evictions-Judgments-by-Agreement-Landlord-Court.pdf.
\58\ As an Eviction Lab report notes, ``[m]any tenants may move
out before the eviction case concludes, even if they would qualify
for protection under the eviction moratorium. Data from before the
pandemic show that many tenants leave without the case going to
court, perhaps aware that the vast majority of cases end with
decisions in the landlord's favor. At the same time, just the
presence of a filing on a tenant's record can prevent that tenant
from accessing safe and healthy rental housing in the future.''
https://evictionlab.org/moratorium-extended-evictions-continue/
(last visited Apr. 7, 2021). Furthermore, according to a legal
services organization, ``[t]he consequences of eviction records go
far beyond temporary displacement and loss of shelter. Eviction
records mean loss of housing subsidy vouchers, ineligibility for
other public housing programs, and being screened out of private
housing, leading to dangerous cycles of poverty and instability.''
Cmty. Legal Servs. of Phila., Breaking the Record: Dismantling the
Barriers Eviction Records Place on Housing Opportunities, at 1 (Nov.
2020), http://www.phillytenant.org/breaking-the-record-dismantling-the-barriers-eviction-records-place-on-housing-opportunities/. See
also Eric S. Peterson & Ria Agarwal et al., Renters can be haunted
by past evictions or debt claims even if they never made it to
court, The Salt Lake Tribune (Feb. 22, 2021), https://www.sltrib.com/news/2021/02/22/renters-can-be-haunted-by/.
\59\ Univ. of Washington Graduate Sch., Informal evictions are
on the rise during the pandemic, with people of color most at risk
for housing insecurity (Mar. 11, 2021), https://www.grad.washington.edu/student-alumni-profiles/informal-evictions-are-on-the-rise-during-the-pandemic-with-people-of-color-most-at-risk-for-housing-insecurity/ (`` `If a landlord wants to evict a
tenant and they're really intent on doing it, they are probably
going to accomplish it without serving a formal eviction notice,'
said Matt Fowle, one of the researchers of the study . . . .
`Tenants perceive that they have less power now compared to
landlords than they did before the pandemic.' '').
---------------------------------------------------------------------------
That consumers may be unaware of their eligibility for temporary
protection under the CDC Order and potentially other moratoria may
explain the continuing rates of formal and informal evictions during
the COVID-19 pandemic. Stakeholders, including consumer advocates and
legal aid organizations, have expressed concerns to the Bureau that
many consumers at risk of eviction either do not know about the CDC
Order or, if they are aware of it, they may be under the mistaken
impression that the Order's protections automatically apply or they
otherwise may be uncertain about what steps they must take to avail
themselves of the CDC Order's eviction protections.\60\
---------------------------------------------------------------------------
\60\ Letter to President Biden, Director Walensky, Secretary
Fudge, and Secretary Vilsack from thousands of National and
Multistate Organizations (Mar. 15, 2021), https://nlihc.org/sites/default/files/Eviction-Moratorium-Letter_March.15.2021.pdf
(asserting that corporate and other landlords continue to evict
tenants before tenants know about the moratorium protections or by
finding reasons for eviction other than nonpayment of rent and
urging, among other policy suggestions, that the Federal government
at minimum require landlords to provide notice to renters of their
rights under the CDC moratorium); Natalie Campisi, Government
Extends Eviction Moratorium For 3 Months. Here's What Renters Should
Do, Forbes (Mar. 29, 2021), https://www.forbes.com/advisor/personal-finance/what-renters-should-do-when-eviction-moratorium-ends/ (``
`One of the problems with the CDC moratorium is that tenants need to
know it exists and they need to apply for it--many renters don't
realize this is an option,' says Marcus Roth, development director
at the Coalition on Homelessness and Housing in Ohio. Unlike the
eviction moratorium in the CARES Act, the CDC order is not
automatic, which might have contributed to the lack of awareness for
many tenants.'').
---------------------------------------------------------------------------
A Government Accountability Office (GAO) report analyzing the
effectiveness of COVID-19 eviction moratoria found that some renters
may not fully understand that they have to take action to become
protected under the CDC Order's eviction moratorium, and others may not
understand all of the required steps, including how to submit the
required declaration.\61\ The GAO report included a comparison of
jurisdictions subject to both the CDC Order and State or local
moratoria with jurisdictions where only the CDC Order applied and found
that the jurisdictions without separate State or local moratoria
experienced larger increases in eviction filings. The GAO noted that,
although comprehensive information does not exist on renter awareness
of the CDC Order's protections, the increasing rate of eviction filings
and the apparent need for State and local measures targeted at
increasing awareness of the CDC Order's protections suggest that some
renters and property owners may be unaware of the CDC Order or its
requirements.\62\ The GAO noted that ``clear, accurate, and timely
information'' is ``essential to keep the public informed during the
COVID-19 pandemic.'' \63\ The GAO concluded that, as the COVID-19
pandemic persists, potentially millions of renters and property owners
will continue to experience financial challenges, and that while the
CDC Order provides some measure of relief to struggling renters, some
renters facing eviction may be unaware of and unable to exercise the
moratorium, and therefore unnecessarily evicted.\64\
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\61\ See Gov't Accountability Office, Covid-19 Housing
Protections: Moratoriums Have Helped Limit Evictions, but Further
Outreach Is Needed, at 1 (Mar. 15, 2021), https://www.gao.gov/products/gao-21-370 (GAO Report).
\62\ Id. at 17.
\63\ Id. at 1.
\64\ Id. at 30.
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The Bureau also is aware of reports that even when renters are
aware of the CDC Order and attempt to exercise their rights under the
Order to halt evictions, they may be falsely informed that they are
ineligible for temporary protection from eviction under the CDC Order
or otherwise may be discouraged from submitting a declaration that
could trigger a ``covered person'' designation under the CDC Order.\65\
Numerous public reports and Bureau outreach with consumer advocates,
legal aid organizations, and other stakeholders also suggest that
parties to the eviction process may be engaged in other conduct in
violation of Federal, State, or local eviction moratoria.\66\
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\65\ According to a study by the National Housing Law Project,
91 percent of tenants surveyed reported illegal evictions in their
area during the pandemic, which included allegedly false statements
that properties were not covered by eviction moratoria. See Nat'l
Hous. Law Project, Stopping COVID-19 Eviction Survey Results (July
2020), https://www.nhlp.org/wp-content/uploads/Evictions-Survey-Results-2020.pdf. See also Peterson & McKitrick, supra note 39.
\66\ See, e.g., Press Release, Washington State Office of the
Attorney General, AG FERGUSON FILES LAWSUIT AGAINST NATIONAL
SORORITY FOR CHARGING AND THREATENING UW STUDENTS IN VIOLATION OF
EVICTION MORATORIUM (Jan. 25, 2021), https://www.atg.wa.gov/news/news-releases/ag-ferguson-files-lawsuit-against-national-sorority-charging-and-threatening-uw; Annie Nova, The CDC banned evictions.
Tens of thousands have still occurred, CNBC (Jan. 14, 2021), https://www.cnbc.com/2020/12/05/why-home-evictions-are-still-happening-despite-cdc-ban.html; Ashley Balcerzak, NJ renters still being
locked out by landlords despite COVID eviction freeze (Mar. 11,
2021), https://www.northjersey.com/story/news/2021/03/11/nj-rental-assistance-covid-eviction-freeze-ignored-some-landlords/6892203002/;
Sophie Nieto-Munoz, N.J. announces new measures to protect tenants
from illegal lockouts during eviction moratorium (Apr. 5, 2021),
https://www.nj.com/coronavirus/2021/04/nj-announces-new-measures-to-protect-tenants-from-illegal-lockouts-during-eviction-moratorium.html (noting that a spokesman for the New Jersey Attorney
General said that the office ``has received 17 written complaints
regarding landlords illegally evicting tenants since April 2020 . .
. but stressed there are likely many, many more'' and that ``the
Volunteer Justice Lawyers say there have been hundreds across the
state, with illegal evictions ramping up since the fall''). The
Bureau has not independently verified the allegations described in
public news reports and stakeholder outreach.
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Consumer advocacy groups, legal aid organizations, housing
organizations, faith groups, and other stakeholders have expressed
concerns to the Bureau that debt collectors under the FDCPA are not
abiding by the CDC Order.\67\ This feedback includes, among other
things, allegations that debt collectors have engaged in eviction-
related conduct that in their view violates the
[[Page 21168]]
FDCPA.\68\ The Bureau has engaged in informal outreach with such groups
and with industry participants.\69\
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\67\ For example, a variety of consumer advocate, legal aid
organization, civil rights organization, faith group, and other
stakeholders urged the Bureau and FTC to explore use of FDCPA and
Federal Trade Commission Act authorities, among other authorities,
to take ``immediate'' action to ``prevent or limit imminent rental
evictions,'' noting that, ``[w]hile the CDC eviction moratorium has
been helpful, it still leaves many families unprotected, it has been
inconsistently implemented, and some landlords have used
questionable and sometimes abusive tactics to evade it.'' Letter
from Nat'l Consumer Law Ctr. et al., to Acting Bureau Director David
Uejio & Fed. Trade Comm'n Acting Chair Rebecca K. Slaughter (Mar. 3,
2021), https://www.nclc.org/images/pdf/special_projects/covid-19/CFPB_FTC_Moratorium_Ltr.pdf.
\68\ Consumer advocates and legal aid organizations have
reported, among other conduct, instances (which the Bureau has not
independently verified) of landlords' attorneys refusing to accept a
signed tenant declaration when presented with one or advising
landlords to have their property managers tell tenants who present a
signed declaration that they are not eligible under the CDC Order as
means of avoiding compliance with the CDC Order.
\69\ Apart from this rulemaking, the Bureau will continue to
monitor debt collector conduct with respect to the eviction process
for any potential consumer harm or compliance concerns and consider
taking additional action at a later time if needed.
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The Bureau has concluded that consumer harms associated with
evictions during the COVID-19 pandemic necessitate immediate action,
specifically pertaining to the activity of debt collectors who are
involved in the evictions process during the pendency of the CDC Order.
For these reasons and the reasons discussed below, the Bureau is
amending Regulation F in this interim final rulemaking to require
certain debt collectors to provide written notice to certain consumers
of their protections under the CDC Order's eviction moratorium and
prohibit certain misrepresentations.
The Bureau believes that this rulemaking is appropriate during the
COVID-19 pandemic, which presents extraordinary circumstances.\70\ The
Bureau will evaluate comments received on the interim final rule to
determine whether it is appropriate to revise the amendments. The
Bureau also will continue to monitor the market to assess consumers'
experiences under the interim final rule.
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\70\ See also part IV.
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As part of this rulemaking, the Bureau consulted with, or offered
to consult with, the appropriate prudential regulators and other
Federal agencies.
III. Legal Authority
The Bureau is issuing this interim final rule pursuant to its
authority under FDCPA section 814(d), which provides that the Bureau
``may prescribe rules with respect to the collection of debts by debt
collectors,'' as defined in the FDCPA.\71\ In particular, as discussed
in part V, the provisions of this interim final rule are based on an
interpretation of FDCPA sections 807 and 808. A debt collection rule
published by the Bureau in November 2020 (the November 2020 Final Rule)
provides an overview of how the Bureau interprets FDCPA sections 807
and 808.\72\
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\71\ 15 U.S.C. 1692l(d).
\72\ See 85 FR 76734, 76739-41 (Nov. 30, 2020).
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FDCPA section 807 generally prohibits a debt collector from
``us[ing] any false, deceptive, or misleading representation or means
in connection with the collection of any debt.'' \73\ Then, ``[w]ithout
limiting the general application of the foregoing,'' section 807 lists
16 examples of conduct that violate that section.\74\ Similarly, FDCPA
section 808 prohibits a debt collector from ``us[ing] unfair or
unconscionable means to collect or attempt to collect any debt.'' \75\
Then, ``[w]ithout limiting the general application of the foregoing,''
FDCPA section 808 lists eight examples of conduct that violate that
section.\76\ Consistent with the approach in the November 2020 Final
Rule,\77\ the Bureau interprets FDCPA sections 807 and 808 in light of:
(1) The FDCPA's language and purpose; (2) the general types of conduct
prohibited by those sections and, where relevant, the specific examples
enumerated in those sections; and (3) judicial decisions.
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\73\ 15 U.S.C. 1692e.
\74\ 15 U.S.C. 1692e(1)-(16).
\75\ 15 U.S.C. 1692f.
\76\ 15 U.S.C. 1692f(1)-(8).
\77\ See 85 FR 76734, 76738-41 (Nov. 30, 2020).
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By their plain terms, FDCPA sections 807 and 808 make clear that
their examples of prohibited conduct do not ``limit[ ] the general
application'' of those sections' general prohibitions. The FDCPA's
legislative history is consistent with this understanding,\78\ as are
opinions by courts that have addressed this issue.\79\ Accordingly, the
Bureau may interpret the general provisions of FDCPA sections 807 and
808 to prohibit conduct that the specific examples in FDCPA sections
807 and 808 do not address if the conduct violates the general
prohibitions. In addition, the Bureau uses the specific examples to
inform its understanding of the general prohibitions. The Bureau also
interprets FDCPA sections 807 and 808 in light of the significant body
of existing court decisions interpreting those sections, which provide
instructive examples of collection practices that are not addressed by
the specific prohibitions in those sections but that nonetheless run
afoul of the FDCPA's general prohibitions in sections 807 and 808.\80\
Consistent with the majority of courts, the Bureau interprets FDCPA
sections 807 and 808 to incorporate an objective, ``unsophisticated''
or ``least sophisticated'' consumer standard.\81\ Finally, courts have
found that a debt collector collecting back rent is subject to the
FDCPA, including the statute's prohibitions on deception and
unfairness.\82\
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\78\ See, e.g., S. Rep. No. 382, 95th Cong., 1st Sess. 4 (1977),
reprinted in 1977 U.S.C.C.A.N. 1695, 1698 (``[T]his bill prohibits
in general terms any harassing, unfair, or deceptive collection
practice. This will enable the courts, where appropriate, to
proscribe other improper conduct which is not specifically
addressed.''). Courts have also cited legislative history in noting
that, ``in passing the FDCPA, Congress identified abusive collection
attempts as primary motivations for the Act's passage.'' Hart v. FCI
Lender Servs., Inc., 797 F.3d 219, 226 (2d Cir. 2015).
\79\ See, e.g., Stratton v. Portfolio Recovery Assocs., LLC, 770
F.3d 443, 450 (6th Cir. 2014) (``[T]he listed examples of illegal
acts are just that--examples.'').
\80\ 85 FR 76734, 76740 (Nov. 30, 2020).
\81\ Id.; 84 FR 23274, 23282-83 (May 21, 2019).
\82\ See, e.g., Romea v. Heiberger & Assocs., 163 F.3d 111, 115-
16 (2d Cir. 1998) (``[U]nder the FDCPA, back rent is debt.'');
Lipscomb v. The Raddatz Law Firm, P.L.L.C., 109 F. Supp. 3d 251,
258-59 (D.D.C. 2015) (concluding that ``the FDCPA applies where
eviction proceedings include an attempt to recover back rent'').
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IV. Administrative Procedure Act
Under the Administrative Procedure Act (APA),\83\ notice and
opportunity for public comment are not required if the Bureau for good
cause finds that notice and public comment are impracticable,
unnecessary, or contrary to the public interest.\84\ Similarly,
publication of this interim final rule at least 30 days before its
effective date is not required where the Bureau has identified good
cause for a different effective date.\85\
---------------------------------------------------------------------------
\83\ 5 U.S.C. 551 et seq., 701 et seq.
\84\ 5 U.S.C. 553(b)(B).
\85\ 5 U.S.C. 553(d)(3).
---------------------------------------------------------------------------
The Bureau finds that prior notice and public comment are
impracticable and contrary to the public interest in consideration of
the public health emergency caused by the COVID-19 pandemic and its
effects on consumers. In particular, renters may be vulnerable to the
negative economic impacts of the pandemic, which include an elevated
risk of eviction, and the immediate health and safety consequences that
are likely to ensue.\86\ Citing the continuing health and safety risks
posed by the COVID-19 pandemic, the CDC Order, as extended on March 29,
2021, maintains the eviction moratorium until June 30, 2021. As the CDC
Order extension noted, although COVID-19 transmission has decreased
since a peak in January 2021, the current number of cases per day
remains almost twice as high as the initial peak in April 2020 and
transmission rates are similar to the second peak in July 2020.\87\
Since the CDC Order's eviction moratorium went into effect in September
2020, some
[[Page 21169]]
debt collectors have engaged in evicting consumers from residential
properties.
---------------------------------------------------------------------------
\86\ See also 86 FR 16731, 16737 (Mar. 31, 2021) (in describing
how it would be impracticable to provide notice and comment, the CDC
wrote in the extension of the CDC Order that, ``The rapidly changing
nature of the pandemic requires not only that CDC act swiftly, but
also deftly to ensure that its actions are commensurate with the
threat.'').
\87\ See id. at 16732.
---------------------------------------------------------------------------
As discussed more fully in parts II and V, the Bureau has become
aware in the months following the initial institution of the CDC
Order's eviction moratorium that consumers who interact with these debt
collectors may not be aware of their protections under the CDC Order
and the steps they must take to avail themselves of such
protections.\88\ As explained below, the failure of debt collectors to
disclose these protections can violate the FDCPA with immediate
consequences to health and safety. At the same time, debt collectors
who otherwise might disclose these protections may lack clear direction
about how to do so to comply with the FDCPA. The Bureau also
understands that some debt collectors may be engaging in
misrepresentations regarding consumers' ineligibility for the CDC
Order's protections. These challenges have emerged only after the CDC
Order initially took effect, and the eviction moratorium effectuated by
the CDC Order has recently been extended for a limited period. To
provide necessary protection for consumers, particularly in light of
the health and safety consequences of eviction, as well as clarity for
debt collectors, it is critical that the interim final rule take effect
as soon as practicable.
---------------------------------------------------------------------------
\88\ See, e.g., GAO Report, supra note 61, at 1.
---------------------------------------------------------------------------
For similar reasons, the Bureau also finds that delaying this
rulemaking to allow for prior public comment would be contrary to the
public interest, because the interim final rule is necessary to avoid
the harm to consumers and to address the lack of clarity for debt
collectors that would result if the interim final rule did not take
effect a short time after issuance. By identifying a practice that
violates the FDCPA and identifying the means by which a debt collector
may comply with the FDCPA while engaging in certain actions related to
residential evictions, the interim final rule will benefit consumers
while minimizing the burden on debt collectors.
For these reasons, the Bureau also finds that there is good cause
for this interim final rule to be effective less than 30 days after
publication, to ensure that this interim final rule is effective on May
3, 2021 and for the duration of the CDC Order's effective period and
any extension thereof.
V. Section-by-Section Analysis
Subpart B--Rules for Debt Collectors Subject to the Fair Debt
Collection Practices Act
Section 1006.9 Debt Collection Practices in Connection With the Global
COVID-19 Pandemic
Section 1006.9 prohibits certain debt collection practices by debt
collectors related to the global COVID-19 pandemic. More specifically,
Sec. 1006.9 prohibits certain 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's
eviction moratorium to prevent the further spread of COVID-19. Section
1006.9(a) and (b) sets forth the purpose and coverage of subpart B and
defines certain terms used in the subpart, and Sec. 1006.9(c)
identifies the prohibited acts. The Bureau is adopting Sec. 1006.9
pursuant to its authority under FDCPA section 814(d) to write rules
with respect to the collection of debts by debt collectors and, with
respect to Sec. 1006.9(c), pursuant to its authority to interpret
FDCPA sections 807 and 808.
9(a) Purpose and Coverage
Section 1006.9(a) identifies the purpose of subpart B of part 1006
and is consistent with FDCPA section 802, which sets forth the purpose
of the FDCPA.\89\ Pursuant to section 802, the purpose of the FDCPA is
to eliminate abusive debt collection practices by debt collectors, to
ensure that debt collectors who refrain from using abusive debt
collection practices are not competitively disadvantaged, and to
promote consistent State action to protect consumers against debt
collection abuses. Section 1006.9(a) thus provides that the purpose of
subpart B is to eliminate certain abusive debt collection practices by
debt collectors related to the global COVID-19 pandemic, to ensure that
debt collectors who refrain from using such abusive debt collection
practices are not competitively disadvantaged, and to promote
consistent State action to protect consumers against such debt
collection abuses.
---------------------------------------------------------------------------
\89\ 15 U.S.C. 1692(e).
---------------------------------------------------------------------------
Section 1006.9(a) also identifies the coverage of subpart B.
Section 1006.9(a) provides that subpart B applies to debt collectors,
as defined in FDCPA section 803(6),\90\ other than a person excluded
from coverage by section 1029(a) of the Dodd-Frank Wall Street Reform
and Consumer Protection Act (Dodd-Frank Act).\91\ Section 1006.9(a)
reflects the Bureau's FDCPA rulemaking authority as set forth in FDCPA
section 814(d).\92\
---------------------------------------------------------------------------
\90\ 15 U.S.C. 1692a(6).
\91\ Public Law 113-203, 124 Stat. 1376, 2004 (2010) (12 U.S.C.
5519(a)).
\92\ FDCPA section 814(d) provides, in part, that the Bureau may
not prescribe rules under the FDCPA with respect to motor vehicle
dealers as described in section 1029(a) of the Dodd-Frank Act. 15
U.S.C. 1692l(d). Any motor vehicle dealers who are FDCPA-covered
debt collectors still need to comply with the FDCPA.
---------------------------------------------------------------------------
9(b) Definitions
9(b)(1)
Section 1006.9(b)(1) provides that the terms ``consumer,''
``debt,'' and ``debt collector'' have the meaning given to them in
FDCPA section 803.\93\ FDCPA section 803(3) defines ``consumer'' as any
natural person obligated or allegedly obligated to pay any debt.\94\
FDCPA section 803(5) defines ``debt'' as any obligation or alleged
obligation of a consumer to pay money arising out of a transaction in
which the money, property, insurance or services which are the subject
of the transaction are primarily for personal, family, or household
purposes, whether or not such obligation has been reduced to
judgment.\95\ A consumer's unpaid residential rent would typically fall
within the FDCPA's definition of debt because it is an obligation of a
consumer to pay money arising out of a transaction for personal,
family, or household purposes.\96\ FDCPA section 803(6) generally
defines ``debt collector'' as 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, or who regularly
collects or attempts to collect, directly or indirectly, debts owed or
due or asserted to be owed or due another. FDCPA section 803(6)'s
definition of ``debt collector'' also includes any creditor who, in the
process of collecting its own debts, uses any name other than the
creditor's own which would indicate that a third person is collecting
or attempting to collect such debts.
---------------------------------------------------------------------------
\93\ 15 U.S.C. 1692a.
\94\ 15 U.S.C. 1692a(3).
\95\ 15 U.S.C. 1692a(5).
\96\ See, e.g., Romea, 163 F.3d at 115-16 (``[U]nder the FDCPA,
back rent is debt.''); Lipscomb, 109 F. Supp. 3d at 258-59
(concluding that ``the FDCPA applies where eviction proceedings
include an attempt to recover back rent'').
---------------------------------------------------------------------------
9(b)(2)
Section 1006.9(b)(2) provides that the term ``CDC Order'' means the
order issued by the CDC titled Temporary Halt in Residential Evictions
to Prevent the Further Spread of COVID-19, as
[[Page 21170]]
extended by the CDC.\97\ As explained in part II, the CDC Order
generally prohibits a landlord, owner of a residential property, or
other person with a legal right to pursue eviction or possessory action
from evicting for non-payment of rent any covered person from any
residential property in any jurisdiction in which the Order applies
during the effective period of the Order.\98\ The CDC Order will remain
in effect until June 30, 2021, unless extended, modified, or rescinded.
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\97\ 86 FR 16731 (Mar. 31, 2021). In the event the CDC further
extends the CDC Order, the Bureau expects that the requirements and
prohibitions in this interim final rule will continue to apply until
the expiration of any such extension.
\98\ This prohibition applies, without limitation, to an agent
or attorney acting on behalf of a landlord or owner of the
residential property. Id. at 16732 n.3.
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9(b)(3)
Section 1006.9(b)(3) provides that the term ``eviction notice''
means the earliest of any written notice that the laws of any State,
locality, territory, or tribal area require to be provided to a
consumer before an eviction action against the consumer may be filed.
Not all jurisdictions require such a notice, and some jurisdictions may
require more than one. The definition clarifies that, for purposes of
this interim final rule, the term eviction notice refers to the
earliest of any such notice that must be provided. Jurisdictions that
do require such a notice may refer to the notice using different
names.\99\ The definition of eviction notice is meant to encompass all
such required notices, regardless of the names by which those notices
are known. Thus, comment 9(b)(3)-1 clarifies that the term eviction
notice includes, for example, notices to quit, notices to pay rent or
quit, and notices to terminate tenancy. As explained in the section-by-
section analysis of Sec. 1006.9(c)(1), a debt collector who provides a
consumer with an eviction notice while the CDC Order is in effect may
be required at that time to disclose to the consumer certain
information about the CDC Order.
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\99\ See, e.g., Ala. Code 35-9A-421 (``Noncompliance with rental
agreement; failure to pay rent.''); Ariz. Rev. Stat. Ann. 33-1368
(``Noncompliance with rental agreement by tenant; failure to pay
rent; utility discontinuation; liability for guests; definition.'');
DC Code Ann. 42-3505.01(a) (providing that ``[a]ll notices to vacate
shall contain a statement detailing the reasons for the eviction'');
Fla. Stat. Ann. 83.56(3) (``Termination of rental agreement.''); 735
Ill. Comp. Stat. 5/9-209 (``Demand for rent--eviction action.'');
Kan. Stat. Ann. 58-2564(b) (``Material noncompliance by tenant;
notice; termination of rental agreement; limitations; nonpayment of
rent; remedies.''); N.C. Gen. Stat. 42-3 (``Term forfeited for
nonpayment of rent.''); Tex. Prop. Code Ann. 24.005 (``Notice to
Vacate Prior to Filing Eviction Suit.''); Vt. Stat. Ann. tit. 9,
4467 (``Termination of tenancy; notice.''); Wis. Stat. Ann. 704.17
(``Notice terminating tenancies for failure to pay rent or other
breach by tenant.'').
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9(c) Prohibitions
Section 1006.9(c) prohibits certain deceptive and unfair acts by
debt collectors. As discussed further below, Sec. 1006.9(c)(1)
generally prohibits debt collectors from filing an eviction action
against a consumer to whom the CDC Order reasonably might apply without
disclosing that the consumer may be eligible for temporary protection
from eviction under the CDC Order. Section 1006.9(c)(2) prohibits debt
collectors from falsely representing or implying to a consumer that the
consumer is not eligible for temporary protection from eviction under
the CDC Order.
The prohibitions in Sec. 1006.9(c) apply only if certain initial
conditions are satisfied. First, because this interim final rule is
designed to address deceptive and unfair debt collection practices with
respect to the CDC Order, the prohibitions apply only during the
effective period of the CDC Order, and only in jurisdictions in which
the CDC Order is effective. As already noted, the CDC Order is set to
expire on June 30, 2021, unless extended, modified, or rescinded. The
CDC Order does not apply in any State, local, territorial, or tribal
area with a moratorium on residential evictions that provides the same
or greater level of public-health protection than the requirements
listed in the CDC Order.\100\
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\100\ 86 FR 16731, 16736 (Mar. 31, 2021). See also CDC Order
FAQs, supra note 32. State, local, territorial, and tribal moratoria
are discussed further in the section-by-section analysis of Sec.
1006.9(c)(1).
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Second, the prohibitions in Sec. 1006.9(c) apply only to a debt
collector's conduct in connection with the collection of a debt. That
is because the Bureau is adopting Sec. 1006.9(c) pursuant to its
authority to interpret FDCPA sections 807 and 808, which prohibit
certain conduct by debt collectors in connection with the collection of
a debt.\101\
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\101\ As discussed elsewhere in this interim final rule, FDCPA
section 807 generally prohibits debt collectors from using any
false, deceptive, or misleading representation or means in
connection with the collection of any debt, and FDCPA section 808
generally prohibits debt collectors from using unfair or
unconscionable means to collect or attempt to collect any debt.
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9(c)(1)
According to the CDC, an eviction moratorium--like quarantine,
isolation, and social distancing--can be an effective public-health
measure to prevent the spread of COVID-19.\102\ Evicted renters must
move, which can increase the risk of COVID-19 spread, particularly
given that, according to the CDC, a large number of evicted renters may
move into close quarters in shared housing or become homeless.\103\ In
addition, according to the CDC, the risk of eviction for non-payment of
rent is related to factors such as suffering a job loss, having limited
financial resources, low income, or high out-of-pocket medical
expenses.\104\ As noted in part II, to qualify for the CDC Order's
eviction moratorium, a person must submit a written declaration under
penalty of perjury attesting to certain eligibility criteria generally
establishing that, because of the person's financial situation, the
person is unable to make full rental payments and, if evicted, likely
would become homeless or would be required to move into a congregate or
shared living setting.\105\
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\102\ 86 FR 16731, 16733 (Mar. 31, 2021).
\103\ Id. at 16734-35.
\104\ Id. at 16731 n.2.
\105\ Id. at 16731-32.
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Based on informal outreach to consumer advocates and other
stakeholders discussed in part II, and the GAO report discussed in part
II,\106\ the Bureau understands that many consumers are unaware that
they may be temporarily protected from eviction for nonpayment of rent
under the CDC Order, or, if they are aware of the Order, they may
believe its protections apply automatically or may not otherwise
understand the steps needed to avail themselves of such protections.
Consumers who are unaware of the CDC Order cannot evaluate whether they
qualify for protection under the eligibility criteria set forth in the
Order. Consumers who assume the protections apply automatically or do
not understand the steps needed to exercise their protections may fail
to take such necessary steps, including submitting a declaration. As a
result, some consumers who otherwise might be permitted to remain in
their homes during the pendency of the CDC Order may be evicted because
they fail to claim such protection or may choose to leave before being
evicted (i.e., either before any eviction action is filed, or after an
eviction action is filed but before any physical eviction takes place).
And, as discussed in the CDC Order, evictions can undermine public
health by contributing to the spread of COVID-19. Requiring debt
collectors to disclose the existence of the CDC Order to certain
consumers in certain circumstances will help to address these harms by
increasing the likelihood that
[[Page 21171]]
consumers will become aware of the Order, and that consumers eligible
for protection under the Order will take the steps necessary to obtain
and invoke that protection.
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\106\ See GAO Report, supra note 61, at 1 (describing how
``clear, accurate, and timely information'' is ``essential to keep
the public informed'' during the COVID-19 pandemic).
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For these reasons, Sec. 1006.9(c)(1) provides that, during the
effective period of the CDC Order, a debt collector collecting a debt
in any jurisdiction in which the Order applies must not, in connection
with the collection of that debt, file an eviction action for non-
payment of rent against a consumer to whom the CDC Order reasonably
might apply without disclosing to that consumer clearly and
conspicuously in writing, on the date that the debt collector provides
the consumer with an eviction notice or, if no eviction notice is
required by applicable law, on the date that the eviction action is
filed, that the consumer may be eligible for temporary protection from
eviction under the CDC Order.
Section 1006.9(c)(1) specifies that a debt collector must provide
the disclosure only if the debt collector files an eviction action for
non-payment of rent by the consumer. A debt collector who files an
eviction action unrelated to the payment of rent would typically not be
acting ``in connection with the collection of a debt,'' which is
required for the FDCPA to apply. The disclosure requirement is
consistent in this respect with the CDC Order, which specifies that the
Order does not preclude evictions based on certain conduct by a tenant,
lessee, or resident unrelated to the non-payment of rent. Specifically,
the CDC Order does not preclude evictions based on a tenant, lessee, or
resident: (1) Engaging in criminal activity while on the premises; (2)
threatening the health or safety of other residents; (3) damaging or
posing an immediate and significant risk of damage to property; (4)
violating any applicable building code, health ordinance, or similar
regulation relating to health and safety; (5) or violating any other
contractual obligation, other than the timely payment of rent or
similar housing-related payment (including non-payment or late payment
of fees, penalties, or interest).\107\
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\107\ 86 FR 16731, 16736 (Mar. 31, 2021).
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Comment 9(c)(1)-1 clarifies that a debt collector does not file an
action to evict a consumer for non-payment of rent if the debt
collector files the action based solely on the consumer engaging in one
or more of the actions specified in the CDC Order as unrelated to the
payment of rent. If a debt collector files an eviction action for non-
payment of rent and other reasons unrelated to non-payment, the
disclosure requirement applies. For ease of reference, this interim
final rule refers to an eviction action that meets all of the
conditions of Sec. 1006.9(c)(1) (i.e., filed by a debt collector
during the effective period of the CDC Order, in a jurisdiction in
which the Order applies, and for nonpayment of rent against a consumer
to whom the Order reasonably might apply) as an ``eviction action.''
Section 1006.9(c)(1) requires debt collectors to provide the
disclosure only to consumers to whom the CDC Order reasonably might
apply. Comment 9(c)(1)-2 clarifies that a consumer to whom the CDC
Order reasonably might apply is a consumer who reasonably might be
eligible to be a covered person as defined in the CDC Order.\108\
Comment 9(c)(1)-2 also clarifies that a consumer is not reasonably
eligible to be a covered person if the debt collector has knowledge
that the consumer is not eligible for protection under the CDC Order.
If a particular consumer would not actually qualify for temporary
eviction protection under the CDC Order, then there is likely no
deception or unfairness to cure, no consumer benefit from receiving a
disclosure about the Order, and no reason to cause debt collectors to
incur the expense of providing such a disclosure.
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\108\ See supra note 24.
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The Bureau recognizes that, given the multiple factual assertions
to which a consumer must attest in the declaration before the
protections of the CDC Order attach, in many circumstances it will be
difficult for a debt collector to identify the consumers to whom the
CDC Order reasonably might apply. Accordingly, Sec. 1006.9(c)(1) does
not require a debt collector to make an individualized determination as
to a consumer's eligibility for protection under the CDC Order in
connection with providing the disclosure. Comment 9(c)(1)-2 clarifies
that nothing in Sec. 1006.9(c)(1) prohibits a debt collector from
providing the disclosure to a consumer even if the consumer might not
reasonably be eligible to be a covered person. In addition, comment
9(c)(1)-2 clarifies that a debt collector may comply with the Sec.
1006.9(c)(1) disclosure requirement by, for example, providing the
disclosure to each consumer against whom the debt collector files an
eviction action for non-payment of rent.\109\ Comment 9(c)(1)-2 also
clarifies that a debt collector does not violate FDCPA sections 807 or
808 merely because the debt collector provides the disclosure to
consumers as described in comment 9(c)(1)-2 even if the consumer is not
reasonably eligible to be a covered person.
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\109\ For example, under the interim final rule, if a debt
collector concludes that the CDC Order would not reasonably apply to
a particular consumer, the debt collector need not provide the
disclosure to that consumer. However, the debt collector also would
not violate the interim final rule if the debt collector provided
the disclosure to that consumer out of an abundance of caution. More
generally, a debt collector would not violate the interim final rule
if the debt collector provided the disclosure to a consumer against
whom the debt collector files a covered eviction action without
making an individualized determination whether the CDC Order is
reasonably likely to apply to that consumer.
---------------------------------------------------------------------------
Given that eligibility under the CDC Order depends on the
consumer's personal circumstances and actions, the Bureau expects that,
in most situations involving non-payment of rent, a debt collector will
not know whether a consumer reasonably might be eligible for protection
under the Order. The Bureau therefore expects that most debt collectors
will provide the disclosure to most or all consumers to whom they
provide an eviction notice for non-payment of rent or against whom they
file an eviction action for non-payment of rent. The Bureau notes that
Sec. 1006.9(c)(1) requires debt collectors to disclose to consumers
that the consumers ``may'' be eligible for temporary protection from
eviction under the CDC Order. The Bureau believes that, in this
context, the disclosure does not convey, impliedly or expressly, that
the debt collector has determined that the consumer is eligible for
protection under the CDC Order. Accordingly, nothing in the disclosure
constitutes legal advice, and a debt collector does not violate the
FDCPA by providing the disclosure to a consumer to whom the protection
is not reasonably likely to apply or to whom the protection does not
ultimately apply.
Section 1006.9(c)(1) requires a debt collector to provide the
disclosure on the date that the debt collector provides the consumer
with an eviction notice or, if no eviction notice is required by
applicable law, on the date that the eviction action is filed.\110\
Formal notices and court filings are likely to command a consumer's
attention and crystallize the threat of eviction. Thus, requiring debt
collectors to provide the disclosure on the same date as they provide
these documents helps ensure that consumers receive information about
the CDC Order when that information may be especially salient to
[[Page 21172]]
them and they may be most likely to act on that information.
Information about the CDC Order may be especially salient and important
to a consumer when the consumer receives an eviction notice. Consumers
who believe they qualify for protection under the CDC Order and receive
the disclosure at that time may be less likely to leave the property of
their own accord in the mistaken belief that the debt collector can
physically evict them.\111\ For consumers who do not receive an
eviction notice, information about the CDC Order may be especially
salient and important when an eviction action is filed. As noted above,
the CDC Order does not prohibit the filing of eviction actions; the
Order prohibits only the actual, physical removal of persons covered by
the Order from their homes.\112\ Thus, a consumer who receives the
disclosure at the time an eviction action is filed will still be able
to take action to obtain the CDC Order's protection before the harm the
Order addresses (i.e., physical removal) takes place.\113\
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\110\ If, as of the date this interim final rule takes effect, a
debt collector has provided the consumer an eviction notice but not
yet filed an eviction action, the debt collector would comply by
providing the disclosure on the date that the eviction action is
filed.
\111\ See part II.D for discussion of informal evictions.
\112\ See CDC Order FAQs, supra note 32.
\113\ If the landlord or the property manager rather than the
debt collector provides the eviction notice, Sec. 1006.9(c)(1)
requires the debt collector to provide the disclosure on the date
that the debt collector files the eviction action--even if the
landlord or the property manager separately disclosed the existence
of the CDC Order.
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Section 1006.9(c)(1) requires a debt collector to disclose to the
consumer on the same date that--but not necessarily at the same time
as--the debt collector provides the consumer with an eviction notice or
files an eviction action. Accordingly, comment 9(c)(1)-3 clarifies that
a debt collector may satisfy this requirement by, for example,
delivering the disclosure to the address that is the subject of
eviction proceedings; the debt collector is not required to ensure that
the consumer actually receives the disclosure. Delivering the
disclosure to the address that is the subject of the eviction
proceedings, particularly if provided with the notice of eviction or
eviction filing, makes it highly likely that the consumer will receive
the disclosure. In light of this, requiring debt collectors to ensure
that consumers actually receive the disclosure would be unduly
burdensome for debt collectors. The Bureau also notes that the FDCPA's
disclosure requirements generally do not require debt collectors to
ensure actual receipt.\114\
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\114\ See 15 U.S.C. 1692g.
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Additionally, the Bureau recognizes that, to minimize costs, a debt
collector may wish to provide the disclosure at the same time that the
debt collector provides the consumer with an eviction notice or serves
the consumer with an eviction action. The Bureau does not believe that
this would reduce the effectiveness of the disclosure for consumers.
Therefore, comment 9(c)(1)-3 clarifies that a debt collector may
provide the disclosure at the same time that the debt collector
provides the consumer with any eviction notice or serves the consumer
with any eviction action. For example, a debt collector may, but is not
required to, include the disclosure in an envelope either on or with
the eviction notice or in the same mailing in which the debt collector
serves the consumer with an eviction action.\115\
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\115\ In the case of eviction actions, service of process often
happens shortly after filing, so providing the disclosure at the
time of service still ensures that consumers receive the disclosure
when information about the CDC Order is likely to be relevant to
them.
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Comment 9(c)(1)-4 clarifies that Sec. 1006.9(c)(1) does not
require a debt collector to provide the disclosure more than once.
Nevertheless, the Bureau also believes that a consumer who has been
provided the disclosure once would not be harmed by receiving the
disclosure again. Accordingly, comment 9(c)(1)-4 also clarifies that
nothing in Sec. 1006.9(c)(1) prohibits a debt collector from providing
the disclosure more than once, such as in each subsequent communication
with the consumer. Comment 9(c)(1)-4 further clarifies that, in
addition, a debt collector does not violate FDCPA sections 807 or 808
merely because the debt collector provides the disclosure more than
once.
As noted, Sec. 1006.9(c)(1) requires the debt collector to
disclose that the consumer may be eligible for temporary protection
from eviction under the CDC Order. Comment 9(c)(1)-5 provides sample
language that a debt collector may use to comply with this disclosure
requirement. The sample language alerts consumers to the possibility of
protection from eviction, prompts them to take follow-up steps, and
directs them to further resources available on the Bureau's website and
by telephone through the Department of Housing and Urban Development's
Housing Counseling Program. Specifically, comment 9(c)(1)-5.i provides
sample language that a debt collector may use to comply with this
disclosure requirement if the debt collector is disclosing that the
consumer may be eligible for temporary protection from eviction solely
under the CDC Order. The sample language in comment 9(c)(1)-5.i states:
``Because of the global COVID-19 pandemic, you may be eligible for
temporary protection from eviction under Federal law. Learn the steps
you should take now: visit www.cfpb.gov/eviction or call a housing
counselor at 800-569-4287.'' \116\ Comment 9(c)(1)-5.i also clarifies
that a debt collector does not violate FDCPA sections 807 or 808 merely
because the debt collector provides the sample language in comment
9(c)(1)-5.i to a consumer in a jurisdiction in which the CDC Order does
not apply.
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\116\ Section 1006.9(c)(1) requires a debt collector to disclose
that the consumer may be eligible for temporary protection from
eviction under the CDC Order. The Bureau believes that consumers may
be more familiar with the term ``Federal law'' than the term ``CDC
Order,'' particularly given the Bureau's concern that consumers may
be unaware of the CDC Order's existence. To aid consumer
comprehension, the sample language in comment 9(c)(1)-5 therefore
uses the term ``Federal law.''
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The Bureau recognizes that the CDC Order does not apply in any
State, local, territorial, or tribal area with a moratorium on
residential evictions that provides the same or greater level of
public-health protection than the CDC Order.\117\ Section 1006.9(c)(1)
does not require debt collectors collecting debts in such jurisdictions
to disclose such protections, but debt collectors may nevertheless wish
to do so.\118\ The Bureau also recognizes that a debt collector may be
uncertain about whether the CDC Order or a State, local, territorial,
or tribal moratorium applies in a particular jurisdiction because it
may be unclear whether the CDC Order is more protective than any such
moratorium. As a result, a debt collector may wish to disclose that the
consumer may be eligible for temporary protection from eviction under
the CDC Order or under State, local, territorial, or tribal law.
Comment 9(c)(1)-5.ii provides alternative sample language that a debt
collector may use to make such a disclosure while satisfying Sec.
1006.9(c)(1). The sample language in
[[Page 21173]]
comment 9(c)(1)-5.ii states: ``Because of the global COVID-19 pandemic,
you may be eligible for temporary protection 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 www.cfpb.gov/eviction or call a housing counselor at 800-569-4287.'' Comment
9(c)(1)-5.ii also clarifies that a debt collector does not violate
FDCPA sections 807 or 808 merely because the debt collector provides
the sample language in comment 9(c)(1)-5.ii to a consumer in a
jurisdiction in which only the CDC Order applies or in which the CDC
Order does not apply.
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\117\ 86 FR 16731, 16736 (Mar. 31, 2021).
\118\ In light of the large number of potential State, local,
territorial, and tribal moratoria, the Bureau has not made a finding
in this interim final 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. Nevertheless, a
debt collector's failure to disclose such information to a consumer
may violate the FDCPA's prohibitions on deception or unfairness (or
both) for the same reasons discussed in this interim final rule with
respect to the failure to disclose the CDC Order, particularly if
State, local, territorial, or tribal law offers greater protection
than the CDC Order. Providing the disclosure in comment 9(c)(1)-5.ii
likely cures any deception or unfairness under FDCPA sections 807 or
808 that would arise from the failure to disclose a more protective
State, local, territorial, or tribal law. Nothing in Sec.
1006.9(c)(1) affects a debt collector's obligation to provide any
moratorium-related disclosure required by State, local, territorial,
or tribal law.
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Section 1006.9(c)(1) requires the debt collector to make the
disclosure clearly and conspicuously in writing. Requiring debt
collectors to provide the disclosure to consumers clearly and
conspicuously and in writing rather than electronically (such as by
email) increases the likelihood in the context of eviction during the
global COVID-19 pandemic that consumers will actually receive and
understand the disclosure, since the Bureau expects that most debt
collectors will provide the disclosure to the address that is the
subject of eviction proceedings. Requiring debt collectors to provide
the disclosure to consumers clearly and conspicuously and in writing
rather than orally (such as during a telephone call) increases the
likelihood that consumers will retain the disclosure, refer back to it
if necessary, and act upon it if appropriate. Comment 9(c)(1)-6
clarifies that clear and conspicuous means readily understandable. In
addition, the comment clarifies that the location and type size also
must be readily noticeable and legible to consumers, although no
minimum type size is mandated.
The Bureau is finalizing Sec. 1006.9(c)(1) as an interpretation of
FDCPA sections 807 and 808, pursuant to its authority under FDCPA
section 814(d) to prescribe rules with respect to the collection of
debts by debt collectors. FDCPA section 807 generally prohibits debt
collectors from using any false, deceptive, or misleading
representation or means in connection with the collection of any debt.
In addition, FDCPA section 807(2)(A) specifically prohibits falsely
representing the character, amount, or legal status of any debt; FDCPA
section 807(4) specifically prohibits representing or implying that
non-payment of a debt will result in, among other things, the seizure
or sale of any property unless such action is lawful and the debt
collector or creditor intends to take such action; and FDCPA section
807(5) specifically prohibits threatening to take any action that
cannot legally be taken or that is not intended to be taken.
Because of the continuing health and safety risks posed by the
COVID-19 pandemic, the CDC Order provides temporary protection to
certain consumers against whom a covered eviction action is filed. A
debt collector who nevertheless files a covered eviction action against
a consumer may explicitly or implicitly represent to the consumer that
the consumer is not eligible, and could not become eligible, for
protection under the CDC Order.\119\ This representation is false or
misleading when made to consumers who are eligible, or could become
eligible, for protection under the CDC Order (such as if they submitted
a declaration). Further, such a misrepresentation is similar to a false
representation of the character and legal status of a debt, which FDCPA
section 807(2)(A) specifically prohibits. It is also similar to a false
representation that non-payment will result in the seizure or sale of
property. And it is similar to a threat to take an action that cannot
legally be taken, which FDCPA section 807(5) specifically prohibits.
The disclosure required by Sec. 1006.9(c)(1) corrects this false
representation by informing consumers that temporary protection from
eviction may be available under the CDC Order.
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\119\ Similarly, as the Bureau and many courts have recognized,
the filing of a legal action to collect a time-barred debt
explicitly or implicitly misrepresents to the consumer that the debt
is legally enforceable. See 86 FR 5766, 5778 (Jan. 19, 2021).
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FDCPA section 808 generally prohibits a debt collector from using
unfair or unconscionable means to collect or attempt to collect any
debt. In addition, FDCPA section 808(6)(C) specifically prohibits a
debt collector from taking or threatening to take any nonjudicial
action to effect dispossession or disablement of property if the
property is exempt by law from such dispossession or disablement. As
explained above, the Bureau believes that many consumers are unaware
that they may be temporarily protected under the CDC Order from
eviction for non-payment of rent. As also explained above, the Bureau
believes that lack of awareness about the CDC Order, including that the
protections are not automatic and the requirement that the consumer
provide a declaration, causes some consumers who would be eligible for
such temporary protection to forgo it. For such consumers--and for
public health more broadly--this harm is significant. Furthermore,
evicting a consumer who would have been protected under the CDC Order,
had the consumer known about the CDC Order, is similar to taking an
action to effect dispossession of property that is exempt from such
dispossession. For these reasons, the Bureau concludes that a debt
collector violates FDCPA section 808's prohibition on unfairness by
filing a covered eviction action against a consumer without disclosing
to the consumer clearly and conspicuously in writing, on the date that
the debt collector provides the consumer with an eviction notice or, if
no eviction notice is required by applicable law, on the date that the
eviction action is filed that the consumer may be eligible for
temporary protection from eviction under the CDC Order.
9(c)(2)
The Bureau understands, based on informal outreach to consumer
advocates and other stakeholders, that some debt collectors may have
falsely represented or implied to consumers that those consumers are
ineligible for protection under the CDC Order.\120\ False statements
about a consumer's ineligibility for protection under the CDC Order may
cause an eligible consumer to forgo that protection, possibly leading
to the consumer's departure or eviction from residential property in
which the consumer otherwise would have been entitled to remain for the
duration of the CDC Order's eviction moratorium. Such departures or
evictions can contribute to the spread of COVID-19 by forcing consumers
to move, often into close quarters in shared or congregate housing
settings.\121\
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\120\ For example, as described in part II, consumer advocates
and legal aid organizations have reported, among other conduct,
instances (which the Bureau has not independently verified) of
landlord attorneys refusing to accept a signed tenant declaration
when presented with one or advising landlords to have their property
managers tell tenants who present a signed declaration that they are
not eligible under the CDC Order.
\121\ 86 FR 16731, 16734-35 (Mar. 31, 2021).
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For these reasons, Sec. 1006.9(c)(2) provides that, during the
effective period of the CDC Order, a debt collector collecting a debt
in any jurisdiction in which the Order applies must not, in connection
with the collection of that debt, falsely represent or imply to a
consumer that the consumer is ineligible for temporary protection from
eviction under the CDC Order. The Bureau is finalizing Sec.
1006.9(c)(2) as an interpretation of FDCPA section 807, pursuant to its
authority under FDCPA section 814(d) to prescribe rules with respect to
the collection of debts by debt collectors. As noted above, FDCPA
section 807
[[Page 21174]]
generally prohibits debt collectors from using any false, deceptive, or
misleading representation or means in connection with the collection of
any debt. A debt collector who, in connection with the collection of a
debt, falsely represents or implies to a consumer that the consumer is
ineligible for protection under the CDC Order uses false, deceptive, or
misleading means to collect the debt. Such activity therefore violates
FDCPA section 807.
Supplement I to Part 1006--Official Interpretations
The interim final rule adds Supplement I to Regulation F to publish
official interpretations of the regulation (i.e., commentary). Comment
I-1 explains that the commentary is the Bureau's vehicle for
supplementing Regulation F and that the provisions of the commentary
are issued under the same authorities as the corresponding provisions
of Regulation F and in accordance with the notice-and-comment
procedures of the APA.
VI. Effective Date
This interim final rule is effective on May 3, 2021. Although this
interim final rule is being issued without notice and opportunity for
comment for the good cause reasons described in part IV above (i.e.,
the vulnerability of renters to the negative economic impacts of the
pandemic, the risk of eviction, and the health and safety consequences
that may ensue), the interim final rule will impose a new disclosure
requirement on debt collectors. Consequently, debt collectors may need
some time to become aware of the new disclosure requirement and
implement it into their processes and systems to the extent they are
engaged in the evictions process. The Bureau does not believe that a
lengthy compliance period is necessary, however, in view of the
disclosure's short length and simplicity, and because the disclosure
does not need to be customized to the specific consumer.\122\ The
Bureau also plans on engaging in robust regulatory implementation and
consumer education efforts to increase stakeholder awareness of the
interim final rule. The compliance period thus balances these
considerations.
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\122\ In addition, the Bureau notes that debt collectors may,
but are not required to, comply with the interim final rule's
disclosure requirement before the effective date.
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VII. Dodd-Frank Act Section 1022(b) Analysis
A. Overview
In developing this interim final rule, the Bureau has considered
the potential benefits, costs, and impacts as required by section
1022(b)(2)(A) of the Dodd-Frank Act.\123\ Specifically, section
1022(b)(2)(A) of the Dodd-Frank Act requires the Bureau to consider the
potential benefits and costs of a regulation to consumers and covered
persons, including the potential reduction of access by consumers to
consumer financial products or services, the impact on depository
institutions and credit unions with $10 billion or less in total assets
as described in section 1026 of the Dodd-Frank Act, and the impact on
consumers in rural areas. The Bureau consulted with appropriate
prudential regulators and other Federal agencies regarding the
consistency of this interim final rule with prudential, market, or
systemic objectives administered by such agencies, as required by
section 1022(b)(2)(B) of the Dodd-Frank Act.
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\123\ 12 U.S.C. 5512(b)(2)(A).
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This interim final rule amends Regulation F, which implements the
FDCPA. The interim final rule addresses certain debt collector conduct
associated with an eviction moratorium issued by the CDC in response to
the COVID-19 pandemic. The amendments would require that debt
collectors provide written notice to certain consumers of their
protections under the CDC Order and prohibit misrepresentations about
consumers' ineligibility for protection under such moratorium.
This interim final rule's purpose is to prevent debt collectors
from making false or misleading representations or engaging in unfair
practices associated with the eviction moratorium issued by the CDC. As
stated above, the CDC Order generally prohibits consumers protected by
the CDC Order from physical removal from residential property for non-
payment of rent. To be covered by the CDC Order, a person must submit a
written declaration under penalty of perjury attesting to certain
eligibility criteria generally establishing that, because of the
person's financial situation, the person is unable to make full rental
payments and, if evicted, would likely become homeless or would be
required to move into a congregate or shared living setting.
Despite the eviction moratorium, physical removals of consumers
from residential property have continued, potentially including
consumers who may have been eligible for protection under the CDC
Order. As discussed above, the GAO found that some renters may not
fully understand that they have to take action to become protected
under the CDC Order's eviction moratorium, and others may not
understand all of the required steps, including how to submit the
required declaration.\124\ The GAO concluded that, as the COVID-19
pandemic persists, potentially millions of renters and property owners
will continue to experience financial challenges, and that while the
CDC Order provides some measure of relief to struggling renters, some
renters facing eviction may be unaware of and unable to exercise the
moratorium, and therefore unnecessarily evicted.\125\ This interim
final rule prohibits debt collectors, in certain circumstances, from
filing an eviction action for non-payment of rent against a consumer to
whom the CDC Order reasonably might apply without disclosing to that
consumer in writing that the consumer may be eligible for temporary
protection from eviction under the CDC Order. The interim final rule
also clarifies that debt collectors, in certain circumstances, must not
falsely represent or imply to a consumer that the consumer is
ineligible for temporary protection from eviction under the CDC Order.
Therefore, this interim final rule may increase awareness of the CDC
Order for consumers who do not know about the CDC Order or who do not
understand the specific steps needed to avail themselves of the CDC
Order's temporary protections. This, in turn, may encourage consumers
to invoke the CDC Order's protections and subsequently reduce the
number of physical removals that the CDC Order is intended to prevent.
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\124\ See GAO Report, supra note 61, at 1.
\125\ Id. at 30.
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1. Data and Evidence
The discussion below relies on publicly available sources,
including reports published by the Bureau. These sources form the basis
for the Bureau's consideration of the likely impacts of the interim
final rule. To the extent possible, the Bureau provides estimates of
the potential benefits and costs to consumers, covered persons, and
landlords and residential property owners of this interim final rule
given available data. However, the data with which to quantify the
potential costs, benefits, and impacts of the interim final rule are
generally limited.
For the purpose of this analysis, the Bureau uses, among other
sources, publicly available data on eviction filings provided by the
Eviction Lab at Princeton University. The Bureau analyzed two datasets
from the Eviction Lab. The Eviction Lab Eviction Tracking System (ETS)
collects records of eviction case filings weekly for 27 cities
[[Page 21175]]
across the United States. The Bureau analyzed data from those 27 cities
through March 20, 2021. Second, the Bureau analyzed Eviction Lab data
from 2000 to 2016 that counts eviction filings nationally.
However, the Bureau does not have sufficient data that would allow
it to reliably estimate the national quantity of other relevant aspects
of the eviction process, such as eviction notices or the physical
removal of consumers from residential property. As explained below, a
more complete characterization of the benefits and costs of this
interim final rule requires a full catalog of eviction-related events
and the economic circumstances of the affected consumers. The Bureau is
not aware of the existence of such data.
In light of these data limitations, the analysis below generally
includes a qualitative discussion of the benefits, costs, and impacts
of the interim final rule, rather than a quantitative analysis. General
economic principles and the Bureau's expertise in consumer financial
markets, together with the limited data that are available, provide
insight into these benefits, costs, and impacts.
2. Description of the Baseline
The Bureau considers the benefits, costs, and impacts of the
interim final rule against a current law baseline that assumes the
Bureau takes no action. Under the baseline, the CDC Order continues to
be in effect until June 30, 2021.\126\ The assumed baseline assumes
that rental assistance remains available to eligible consumers through
the Department of Treasury's Emergency Rental Assistance Program along
with eviction moratoria, rent freezes, and rental assistance programs
implemented by State and local governments.\127\ These policies affect
the number of renters at risk of eviction under the baseline.
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\126\ At a date subsequent to the publication of this interim
final rule, the CDC may decide to extend the temporary protections
beyond its scheduled expiration on June 30, 2021. If extended, the
number of evictions delayed or prevented would likely increase, and
this would likely increase the benefits to consumers and the costs
to landlords, residential property owners, and covered persons.
\127\ See, e.g., Eviction Lab, COVID-19 HOUSING POLICY
SCORECARD, https://evictionlab.org/covid-policy-scorecard/ (last
visited Apr. 1, 2021); U.S. Dep't of the Treasury, Emergency Rental
Assistance Program, https://home.treasury.gov/policy-issues/cares/emergency-rental-assistance-program (last visited Apr. 1, 2021);
Perkins Coie LLP, COVID-19 Related Eviction and Foreclosure Orders/
Guidance 50-State Tracker (Mar. 29, 2021), https://www.perkinscoie.com/en/news-insights/covid-19-related-eviction-and-foreclosure-ordersguidance-50-state-tracker.html.
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The analysis of this interim final rule's benefits and costs
separately examines consumers and covered persons. Specifically, the
analysis of the costs and benefits associated with this interim final
rule examines the direct and indirect effects on consumers, their
landlords and other residential property owners, and debt collectors,
as defined by the FDCPA.
3. Benefits to Consumers
The interim final rule is intended to help ensure that consumers
who may face an eviction proceeding as a result of non-payment of rent
are aware of temporary eviction protections under the CDC Order and are
not misled about their ineligibility for such protections.
Under the baseline, consumers who are unaware of the CDC Order may
be removed from the property even though they would have been eligible
for the Order's protection had they taken certain steps.\128\ Some
consumers may be unaware of the eviction protections available under
the CDC Order and therefore may move out following receipt of an
eviction notice but before a formal eviction action is filed or
judgment issued.\129\ Some consumers may be falsely informed that they
are ineligible for the CDC Order's protections.
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\128\ Minority renters, renters with lower income, and renters
with lower educational attainment are more likely to be behind on
rent payments than other consumers and therefore face a greater risk
of eviction. Based on Census Household Pulse Survey data from March
2021, about 12 percent of White renters reported being behind on
their rent, compared to 20 to 22 percent of non-White renters. About
19 percent of renters with pre-tax income less than $35,000 reported
being behind on their rent, compared to about 12 percent for
consumers with income between $35,000 and $75,000. Of renters
without a high school degree, over 26 percent reported being behind
on rent, compared to 17 percent for renters with a high school
degree and 7 percent for renters with a college degree.
\129\ See supra note 55.
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This interim final rule prohibits debt collectors from filing an
eviction action in a jurisdiction in which the CDC Order applies
without disclosing to certain consumers in writing that they may be
eligible for protections from eviction. The interim final rule further
clarifies that debt collectors are prohibited from falsely representing
or implying to a consumer that the consumer is ineligible for temporary
protection from eviction under the CDC Order. Therefore, this interim
final rule may help to ensure that consumers learn about the CDC Order
and take advantage of its temporary protections when appropriate. In
turn, the interim final rule may reduce physical removals that the CDC
Order is intended to prevent. Accordingly, this interim final rule may
subsequently reduce the number of consumers who become homeless or are
required to move into a congregate or shared living setting, the
related spread of COVID-19, and other related negative economic as well
as health and safety consequences.\130\
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\130\ 86 FR 16731, 16734 (Mar. 31, 2021).
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Number of Consumers Directly Affected
The Bureau expects that the consumers who will be most directly
affected by the interim final rule are those in jurisdictions in which
the CDC order applies who would receive eviction notices or be the
subject of a covered eviction action between the effective date of this
interim final rule and June 30, 2021. These renters may not currently
be aware of the temporary protection from eviction under the CDC Order.
This interim final rule would prohibit a debt collector from filing a
covered eviction action against a consumer without disclosing to the
consumer that the consumer may be eligible for temporary protection
from eviction under the CDC Order.\131\ The disclosure must be provided
on the date that the debt collector provides the consumer with an
eviction notice or, if no eviction notice is required by applicable
law, on the date that the eviction action is filed.
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\131\ Some renters may also benefit if landlords choose to delay
eviction proceedings as a result of the required disclosure. The
Bureau does not have the data to measure what fraction of landlords
of renters potentially covered by the CDC Order's eviction
moratorium would choose not to initiate an eviction proceeding as a
result of this interim final rule. As discussed below, the Bureau
expects that the direct costs of providing the disclosure are not
large. However, if landlords or residential property owners
anticipate that consumers are more likely to be covered by the CDC
Order as a result of the required disclosure, then the interim final
rule may reduce their incentive to initiate eviction proceedings.
---------------------------------------------------------------------------
Ideally, an analysis of the benefits and costs of this interim
final rule would separately include quantitative information on
eviction notices, eviction filings, and physical removals, both under
the baseline and with the disclosure mandated by this interim final
rule. However, the Bureau does not have sufficient data to estimate the
number of eviction notices issued by debt collectors or the number of
physical removals that occurred in either the period before the
beginning of the pandemic or since. The Bureau has some limited data on
eviction filings, which may not speak to effects on other covered
eviction actions or physical removals of the CDC Order or the interim
final rule.
Of the 27 cities for which data on eviction filings are available
from the Eviction Lab, 16 did not have an active local moratorium one
month prior to the
[[Page 21176]]
effective date of the CDC Order.\132\ Analyzing trends in eviction
filings among these cities, the data suggest that the CDC Order
standing alone did not have an immediate and measurable effect on the
rate of eviction filings. Eviction filings in the five weeks following
the effective date of the CDC Order continued at rates that were
similar to or higher than those immediately before.\133\
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\132\ These cities are Charleston, SC; Cincinnati, OH;
Cleveland, OH; Columbus, OH; Fort Worth, TX; Gainesville, FL;
Greenville, FL; Houston, TX; Jacksonville, FL; Kansas City, MO;
Memphis, TN; Milwaukee, WI; New York, NY; St. Louis, MO; Tampa, FL;
and Wilmington, DE.
\133\ Specifically, there were 20,741 eviction filings in those
16 cities over the period beginning August 23, 2020 and ending
August 29, 2020. Between September 6, 2020 and October 10, 2020,
there were 22,011 eviction filings. While evictions generally
increased through the summer of 2020, the effective date of the CDC
Order does not appear to coincide with a discrete change in the
number of eviction filings. This finding is consistent with an
analysis conducted by the GAO. See GAO Report, supra note 61.
---------------------------------------------------------------------------
From the analysis of eviction filings around the effective date of
the CDC Order, the finding that filings did not decline does not
necessarily imply that physical removals did not decline. However, it
does imply that if eviction filings continue at recent rates, many
consumers will receive a disclosure and may be directly affected by
this interim final rule. In the first 11 weeks of 2021, there were
approximately 5,000 eviction filings per week in the 27 cities for
which the Eviction Lab has made data available. Using the Eviction
Lab's historical annual data, between 2000 and 2016 these 27 cities
accounted for a roughly constant fraction of 5 percent of eviction
filings nationally.
To estimate the number of consumers that would receive the
disclosure and may be affected by this interim final rule, the Bureau
makes two assumptions. First, the Bureau assumes that, absent this
interim final rule, the rate of weekly eviction filings would continue
to be about 5,000 per week in the 27 cities. Second, the Bureau assumes
that the share of evictions accounted for nationally in the 27 cities
is 5 percent, the same as the share between 2000 and 2016. Under these
two assumptions, the Bureau estimates that at publication of this
interim final rule, there are roughly 100,000 eviction filings per
week, nationally. The interim final rule only applies to jurisdictions
where the CDC Order applies; the Bureau does not have a comprehensive
catalog of jurisdictions where more protective moratoria apply.
Somewhat fewer households would be subject to an eviction filing and
would receive the disclosure to the extent filings were made by debt
collectors in a jurisdiction where the CDC Order applies.\134\ Somewhat
more households may receive a disclosure accompanying another covered
eviction action. Nevertheless, the Bureau does not have data to
estimate what fraction of those households would invoke eviction
protections absent this interim final rule.
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\134\ The Bureau also does not have data to estimate the number
of renters who would receive the required disclosure because the
person providing the eviction notice or filing is a debt collector
covered by the interim final rule. Some landlords or residential
property owners may represent themselves in court, in which case the
interim final rule likely would not apply. However, the Bureau
understands that a large majority of landlords or residential
property owners hire an attorney to conduct eviction proceedings on
their behalf and that, therefore, the interim final rule would apply
to most eviction proceedings to which the CDC Order would apply
between the effective date and June 30, 2021. See Peterson &
McKitrick, supra note 39 (finding that in August 2020, nearly two-
thirds of eviction filings in Utah appear to have been filed by one
law firm); Ivry, supra note 39 (``Philadelphia landlords were
represented by legal counsel in 82 percent of eviction cases from
2015 to 2020, according to a study by Community Legal Services . . .
In Kansas City, 1.3 percent of tenants were represented from 2006 to
2016, while 84 percent of landlords had lawyers, according to the KC
Eviction Project.'').
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Direct Benefits: Evictions Delayed or Prevented
This interim final rule directly benefits consumers if it delays or
prevents consumers who are eligible for temporary eviction protection
under the CDC Order from physical removal from housing. For instance, a
physical removal may be delayed but not prevented if consumers invoke
their eviction protections but are nevertheless evicted following the
expiration of the CDC Order. An eviction may be prevented entirely if,
during the moratorium period, consumers who are delinquent on rent
become current, possibly through use of rental assistance funds made
available through the Department of Treasury's Emergency Rental
Assistance Program, and are not evicted after June 30, 2021. Delaying
or preventing evictions results in important health benefits during the
COVID-19 pandemic, which is the motivation for the CDC Order.\135\
---------------------------------------------------------------------------
\135\ See 86 FR 16731, 16737 (Mar. 31, 2021). The CDC Director
has determined that ``extending the temporary halt in evictions . .
. constitutes a reasonable measure . . . to prevent the further
spread of COVID-19 throughout the United States.'' Id.
---------------------------------------------------------------------------
Despite the CDC eviction moratorium, data available to the Bureau
indicate that evictions have continued.\136\ By requiring debt
collectors to provide a written disclosure about the CDC Order and by
clarifying that debt collectors are prohibited from making
misrepresentations about consumers' ineligibility for eviction
protection, this interim final rule may prevent or delay evictions
between the effective date and June 30, 2021.
---------------------------------------------------------------------------
\136\ Data from Eviction Lab show that there have been
approximately 5,000 eviction filings per week in 27 cities in the
first 11 weeks of 2021. See https://evictionlab.org/eviction-tracking/ (last visited Apr. 12, 2021).
---------------------------------------------------------------------------
The number of physical removals that will be delayed or prevented
as a result of this interim final rule is uncertain, and the Bureau is
not aware of data that could help to estimate it. The number of
evictions that might be prevented by the interim final rule depends on:
(1) The number of consumers who will receive an eviction notice or be
subject to an eviction action for non-payment of rent between the
effective date and June 30, 2021; (2) the share of those consumers who
will receive the disclosure (i.e., be covered by the interim final
rule); and (3) the extent to which the disclosure causes consumers who
receive it to avail themselves of the temporary protection afforded
under the CDC Order when they otherwise would not have. As discussed
above, there may be as many as 800,000 renters at risk of eviction
between the effective date of the interim final rule and June 30, 2021.
The Bureau does not have data to estimate how many of these renters
would receive the required disclosure under the interim final rule and
meet the criteria for protection under the CDC Order.\137\ This number
depends, among other things, on whether the source of eviction risk is
non-payment of rent and whether, if evicted, these renters likely would
become homeless or would be required to move into a congregate or
shared living setting.
---------------------------------------------------------------------------
\137\ See supra note 134.
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The number of evictions prevented by the interim final rule also
depends on the effectiveness of the disclosure. For renters receiving
the required disclosure, its effect depends on whether they are already
aware of the CDC Order and, if they are not, on whether the renters
read, understand, and act on the disclosure. The effectiveness of a
disclosure depends on factors including consumers' comprehension of the
disclosure, consumers' beliefs in the authenticity of the disclosure,
and consumers' receipt of the disclosure at a time when they can act on
its information.\138\ Existing
[[Page 21177]]
studies of the effectiveness of disclosures in other settings suggest
that a disclosure's effectiveness may be limited, depending on how
effectiveness is measured and the context of the disclosure.\139\ Here,
the fact that the interim final rule not only requires a disclosure but
also prohibits certain misrepresentations by debt collectors about
consumer ineligibility for protection under the CDC moratorium may
increase the effectiveness of the disclosure.\140\
---------------------------------------------------------------------------
\138\ The Bureau is aware of evidence that many tenants may not
have knowledge of the CDC Order. Stakeholders, including consumer
advocates and legal aid organizations, have expressed concerns to
the Bureau that many consumers at risk of eviction either do not
know about the CDC Order or are uncertain about what steps they must
take to avail themselves of the CDC Order's eviction protections.
Notably, a GAO report analyzing the effectiveness of COVID-19
eviction moratoria found that some renters may not fully understand
how to use the CDC moratorium or complete the required declaration.
\139\ See Alicia Chin & Dustin H. Beckett, Don't watch me read:
How mere presence and mandatory waiting periods affect consumer
attention to disclosures, Behavioural Pub. Policy (Jan. 28, 2019),
https://www.cambridge.org/core/journals/behavioural-public-policy/article/abs/dont-watch-me-read-how-mere-presence-and-mandatory-waiting-periods-affect-consumer-attention-to-disclosures/D429B9196FC7C1DEAEB1C4ED609A0E7F. See also Mark A. LeBoeuf, Jessica
M. Choplin, & Debra Pogrund Stark, Eye See What You Are Saying:
Testing Conversational Influences on the Information Gleaned from
Home-Loan Disclosure Forms, Journal of Behavioral Decision Making
(May 17, 2015), https://onlinelibrary.wiley.com/doi/full/10.1002/bdm.1881.
\140\ The extent to which the disclosure may affect whether
consumers obtain the CDC Order's eviction protections may depend on
a number of factors. For example, consumers who expect that they
will continue to be unable to make rental payments may choose to
seek new housing before they have an opportunity to see the
disclosure. The disclosure's design and timing as well as consumers'
economic circumstances may also affect whether the disclosure would
change behavior. The Bureau is not aware of research quantifying the
extent to which factors such as these might limit the effect of the
disclosure.
---------------------------------------------------------------------------
To the extent that the interim final rule does delay or prevent
evictions that would otherwise take place prior to June 30, 2021, it
will benefit consumers by reducing their exposure to the risk of COVID-
19 infection, disease, and death. The Bureau cannot quantify the change
in exposure to COVID-19, nor the economic cost of COVID-19-related
morbidity and mortality.\141\ Recent research suggests that eviction
moratoria that predate the current CDC moratorium were associated with
significant reductions in the number of COVID-19 infections and
deaths.\142\ These reductions occurred while few U.S. adults had been
vaccinated and were due in large part to the continued ability of
renters to practice social distancing and good hygiene. Potentially
affected renters are those who would be evicted before June 30, 2021
under the baseline where the Bureau does not issue this interim final
rule.
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\141\ Among other data, morbidity and mortality estimates would
require health, demographic, and employment data on the population
of households that would benefit from the disclosures mandated by
this interim final rule.
\142\ See Kay Jowers & Christopher Timmins et al., Housing
Precarity & the COVID-19 Pandemic: Impacts of Utility Disconnection
and Eviction Moratoria on Infections and Deaths Across US Counties
(Jan. 2021), https://www.nber.org/papers/w28394 (estimating that
eviction moratoria are associated with a 3.8 percent reduction in
COVID-19 infections and a 11 percent reduction in deaths). See also
Kathryn M. Leifheit & Sabriya L. Linton et al., Expiring Eviction
Moratoriums and COVID-19 Incidence and Mortality (Nov. 30, 2020),
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3739576 (cited
by CDC in its Order, 86 FR 16731, 16734 n.32 (Mar. 30, 2021),
estimating that lifting eviction moratoria was associated with
approximately 434,000 excess COVID-19 cases and 11,000 excess deaths
nationally).
---------------------------------------------------------------------------
This interim final rule may decrease COVID-19-related risk for
several reasons. First, consumers who have not been evicted and
transitioned to a shared living situation or homelessness may be better
able to practice social distancing and good hygiene, one primary
hypothesis for the effectiveness of pandemic-related eviction moratoria
in recent academic research. Second, even if this interim final rule
only delays eviction, renters will face the housing challenges of
eviction--including limited ability to social distance--later, in a
period expected to have increased herd immunity and lower COVID-19 case
prevalence. It also means that these renters will have more opportunity
to become vaccinated before being exposed to higher-risk environments
such as those associated with group housing.\143\ As such, the Bureau
expects that renters who experience delayed eviction as a result of the
interim final rule will be at a lower overall risk of infection.
Nevertheless, the Bureau is not aware of data that may help to estimate
the number of COVID-19-related infections and deaths prevented as a
result of this interim final rule with any degree of precision.
---------------------------------------------------------------------------
\143\ As of the publication of the interim final rule, the
United States has currently fully vaccinated roughly 20 percent of
the adult population, is administering roughly 3 million vaccine
doses per day, and is on pace to reach 4 million doses per day by
April 30, 2021. See How the Vaccine Rollout Is Going in Your County
and State, https://www.nytimes.com/interactive/2020/us/covid-19-vaccine-doses.html (Apr. 11, 2021). See also Press Briefing by White
House COVID-19 Response Team and Public Health Officials (Apr. 5,
2021), https://www.whitehouse.gov/briefing-room/press-briefings/2021/04/05/press-briefing-by-white-house-covid-19-response-team-and-public-health-officials-24/. At this pace, more than a third of
adults will be vaccinated by this interim final rule's effective
date. At 4 million doses per day, between May 1 and June 30, another
240 million doses and 120 million more adults will be vaccinated,
suggesting that more than three quarters of Americans will be
vaccinated before the expiration of the CDC Order.
---------------------------------------------------------------------------
Consumers whose eviction is delayed or prevented by the interim
final rule may also benefit directly in other ways from decreased
housing insecurity. Evictions impose direct costs associated with
moving and may disrupt the lives of consumers. Evicted consumers are
subject to uncertain and unstable environments and often find housing
with family, in temporary group housing, or even become homeless.\144\
Notably, researchers have even hypothesized that the acute stress
associated with evictions may explain negative health outcomes in
children whose mothers experienced eviction while pregnant.\145\ To the
extent that eviction is delayed by the CDC Order, consumers may further
benefit from the delay by having the opportunity to make plans in
anticipation of being removed from housing. Some consumers may also be
able to take advantage of rental assistance programs and stay in their
homes beyond June 30, 2021. However, that benefit may be reduced if
consumers accrue additional rental debt, since the CDC Order does not
stop unpaid rent from accruing. The Bureau does not have data that can
be used to estimate the cost of the stresses associated with eviction-
related housing insecurity.
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\144\ 86 FR 16731, 16734 (Mar. 31, 2021).
\145\ Gracie Himmelstein & Matthew Desmond, Association of
Eviction with Adverse Birth Outcomes Among Women in Georgia, 2000 to
2016, JAMA Pediatrics (Mar. 1, 2021), https://jamanetwork.com/journals/jamapediatrics/fullarticle/2776776. The physical and mental
health consequences of physical removal are likely to be greater for
larger households with children and for consumers without health
insurance. See Matthew Desmond & Rachel Tolbert Kimbro, Eviction's
Fallout: Housing, Hardship, and Health, Social Forces (Feb. 24,
2015), https://scholar.harvard.edu/files/mdesmond/files/desmondkimbro.evictions.fallout.sf2015_2.pdf, and Matthew Desmond,
Evicting Children, Social Forces (May 17, 2013), https://scholar.harvard.edu/files/mdesmond/files/social_forces-2013-desmond-303-27.pdf. There is evidence that these groups are more likely to
be at risk of eviction. Based on Census Household Pulse Survey data
from March 2021, about 21 percent of renter households that include
children under 18 were behind on their rent, compared to about 11
percent of other households. About 25 percent of renters without
health insurance reported being behind on rent, compared to about 13
percent of renters with health insurance.
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Indirect Benefits
As described previously, the potential direct beneficiaries of this
interim final rule are consumers who would be removed from their
residence for non-payment of rent but who, because of the interim final
rule, acquire information about the CDC Order and utilize the Order's
temporary protection against eviction. However, consumers may also
indirectly benefit from this interim final rule. Although the Bureau
does not have data with which to quantify the magnitude of these
additional indirect
[[Page 21178]]
benefits, where possible, the Bureau describes describe some of these
indirect benefits below.
The CDC Order's eviction moratorium is premised, in part, on the
prediction that eviction limits consumers' ability to follow adequate
social distancing recommendations. Eviction potentially forces
consumers into shared living situations, housing with friends and
family, or homelessness; these circumstances may expose evicted
consumers to increased risk of COVID-19 infection.\146\
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\146\ See 86 FR 16731, 16737 (Mar. 31, 2021). The CDC Director
has determined that ``extending the temporary halt in evictions . .
. constitutes a reasonable measure . . . to prevent the further
spread of COVID-19 throughout the United States.'' Id.
---------------------------------------------------------------------------
In turn, evicted consumers themselves may expose broader
populations of consumers to COVID-19 infection. When evicted consumers
move, they may spread COVID-19 to individuals in their new housing
situations and the community at large.\147\
---------------------------------------------------------------------------
\147\ See id. at 16734-35.
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Thus, even if this interim final rule's effect on evictions and the
resulting direct reduction of renters' exposure to COVID-19 infection
is relatively small, the effects on public health could be significant
more broadly. Nevertheless, the Bureau does not have data required to
ascertain how evictions affect the direct and indirect risks of COVID-
19 infection.
4. Benefits and Costs to Landlords
Landlords and residential property owners (collectively in this
section, ``landlords'') generally are not debt collectors and therefore
generally will not be covered by the interim final rule.\148\ However,
landlords will be indirectly affected by the interim final rule to the
extent that they employ debt collectors to provide eviction notices or
engage in in eviction actions. The Bureau does not have data to
reliably estimate the number of landlords that employ debt collectors
for eviction-related activities but understands that in some
jurisdictions a majority of eviction filings are made by attorneys (who
in many cases are FDCPA-covered debt collectors).\149\
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\148\ In addition to the CDC Order, landlords and residential
property owners also may be affected by other government policies
undertaken in response to the COVID-19 pandemic, such as eviction
moratoria imposed by State or local governments. This interim final
rule does not address such government policies and the costs and
benefits of those interventions are not considered in this interim
final rule.
\149\ See NCBA, supra note 42.
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Landlords may benefit along with the general population from the
interim final rule's direct and indirect effects, especially those
related to health. However, landlords bear costs of evictions that are
delayed or prevented as a result of this interim final rule.
Specifically, the disclosure required by this interim final rule
may cause consumers to invoke their protections under the CDC Order and
prevent or delay physical removal from housing despite landlords
serving eviction notices or filing eviction lawsuits. Delaying physical
removal has different effects on landlords than preventing physical
removal. To understand why, suppose that this interim final rule causes
a consumer to invoke eviction protections. First, consider the case in
which protections under the CDC Order only delay physical removal for
non-payment of rent until after June 30, 2021. In that case, the
landlord may be delayed in replacing lost rental revenue streams,
meaning that the landlord would lose some rental income from their
property. Landlords may not be able to recover this income through
subsequent collection efforts.\150\ Second, consider the case in which
protections under the CDC Order prevent physical removal for non-
payment of rent altogether, because the delay permits renters to become
current on rent prior to the completion of an eviction proceeding. For
instance, renters' economic situations may improve, or they may benefit
from rental assistance programs such as the Department of Treasury's
Emergency Rental Assistance Program. In this case, the landlord's
revenue may not be lost, only delayed. Relative to the baseline where
the renter is removed, the landlord bears the cost of a late payment
but may avoid costs associated with replacing the renter.\151\
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\150\ It may be difficult for landlords to recover unpaid rent
owed by consumers who eventually vacate the property, for example,
because it is difficult for landlords or their agents to locate
consumers who have moved and because those consumers may not have
funds from which they can pay amounts owed.
\151\ Landlords, especially smaller ones, may rely on rental
income to service other debt or liabilities. If the interim final
rule interrupts rental income by causing renters to invoke eviction
protections, landlords may bear additional costs associated with
becoming delinquent or defaulting on other debts. However, mortgage
forbearance programs in the baseline may help landlords mitigate
some of those costs.
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Landlords are generally unable to predict whether renters fall into
the first or second category above. If they were able to, they may not
take eviction actions against the latter category because the cost of a
delayed payment may be small relative to the cost of replacing the
renter.\152\ To the extent that this interim final rule prevents
evictions, it may offset some of the economic costs to landlords caused
by delayed evictions.
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\152\ The opportunity costs of eviction may be exacerbated by
external factors. For example, the landlord may be liquidity
constrained, the unit may be rent controlled, or the local rental
market may experience extremely high demand.
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The Bureau is unaware of data that would allow it to estimate the
lost revenue that landlords would experience as a result of this
interim final rule. Specifically, the Bureau does not have data to
estimate which renters would invoke their protections under the CDC
Order, which renters would be able to eventually become current on
their rent, or the rent of their respective rental units.
5. Benefits and Costs to Covered Persons
Debt collectors who engage in eviction-related activities on behalf
of landlords may be subject to three costs as a result of this interim
final rule. First is the direct cost of providing the required
disclosure. The Bureau does not have direct evidence on costs of
eviction notices but believes that the cost associated with providing
the required disclosure is negligible, given that: (1) The disclosure
requires at most one additional printed page; (2) the disclosure is
required in connection with a notice that already must be provided to
the consumer; and (3) the disclosure does not need to be customized to
the specific consumer.\153\ Even for larger debt collectors that serve
automated eviction notices en masse, the Bureau does not anticipate
large costs associated with including a disclosure that does not
include consumer-specific information.
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\153\ The Bureau has previously estimated that debt collectors
face estimated ongoing printing and mailing costs from providing
validation notices to consumers of $0.50 to $0.80 per notice. See 86
FR 5848 (Jan. 19, 2021). The Bureau anticipates that such costs will
be significantly lower here, in particular because the notice can be
provided with other required notices, reducing postage costs
associated with the required notice.
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Second, debt collectors may incur one-time costs to train staff and
update systems to ensure that the disclosure is provided and to
demonstrate compliance. These costs are unlikely to be large, given
that the disclosure requirement is tied to existing legal processes
that already require debt collectors to comply with State, local, or
court rules. Debt collectors are likely to already have systems in
place to ensure that renters are provided with certain information
required by the relevant jurisdiction at the time of the disclosure.
Debt collectors in certain jurisdictions may also incur a one-time
legal or compliance cost associated with determining the CDC Order's
interaction with applicable State, local, territorial,
[[Page 21179]]
or tribal eviction moratoria, in the event they did not already do so
since the CDC Order initially went into effect.
Third, debt collectors who represent landlords as attorneys in
eviction actions may collect decreased legal fees to the extent that
the required disclosure leads to a decrease in eviction filings. As
described in greater detail above, this interim final rule may lead to
both delayed and prevented evictions. In the case of a delayed
eviction, attorneys' legal fees may be delayed until after the
expiration of the moratorium on June 30, 2021. The Bureau does not
anticipate that the cost of a months-long delay is substantial. In the
case of prevented evictions, attorneys would lose legal fees, a benefit
to landlords.
B. Potential Impact on Depository Institutions and Credit Unions With
$10 Billion or Less in Total Assets, as Described in Section 1026
Depository institutions and credit unions with $10 billion or less
in total assets are not covered under this interim final rule and are
not expected to be directly impacted.
C. Potential Impact on Consumers in Rural Areas and on Access by
Consumers to Consumer Financial Products or Services
Generally, rural areas are characterized by having fewer renters,
which would imply fewer evictions by itself. However, the Bureau does
not have data that would allow it to evaluate how the benefits and
costs detailed above would differ in rural areas, especially those
related to health.
In part because of the temporary nature of the interim final rule's
effects, the Bureau does not expect that this interim final rule will
materially affect access by consumers to consumer financial products or
services.
VIII. Regulatory Flexibility Act Analysis
The Regulatory Flexibility Act (RFA) \154\ does not apply to a
rulemaking where general notice of proposed rulemaking is not
required.\155\ As noted previously, the Bureau has determined that it
is unnecessary to publish a general notice of proposed rulemaking for
this interim final rule. Accordingly, the RFA's requirements relating
to an initial and final regulatory flexibility analysis do not apply.
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\154\ 5 U.S.C. 601 et seq.
\155\ 5 U.S.C. 603(a), 604(a).
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IX. Paperwork Reduction Act
Under the Paperwork Reduction Act of 1995 (PRA),\156\ Federal
agencies are generally required to seek approval from the Office of
Management and Budget (OMB) for information collection requirements
prior to implementation. Under the PRA, the Bureau may not conduct or
sponsor, and, notwithstanding any other provision of law, a person is
not required to respond to, an information collection unless the
information collection displays a valid control number assigned by OMB.
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\156\ 44 U.S.C. 3501 et seq.
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The interim final rule amends 12 CFR part 1006 (Regulation F),
which implements the FDCPA. This interim final rule adds a new
disclosure requirement and the Bureau is requesting a new OMB control
number for this disclosure requirement.
Under the interim final rule, the Bureau temporarily requires debt
collectors to make certain disclosures in connection with an eviction
proceeding. These information collections are required to provide
benefits for consumers and will be mandatory. Because the Bureau does
not collect any information, no issue of confidentiality arises. The
likely respondents are for-profit businesses that are FDCPA debt
collectors.
The collections of information contained in this interim final
rule, and identified as such, have been submitted to OMB for review
under section 3507(d) of the PRA. A complete description of the
information collection requirement, including the burden estimation
methods, is provided in the information collection request (ICR)
supporting statement that the Bureau has submitted to OMB under the
requirements of the PRA. The Bureau will publish a separate notice in
the Federal Register when these information collections have been
approved by OMB.
Please send your comments to the Office of Information and
Regulatory Affairs, OMB, Attention: Desk Officer for the Bureau of
Consumer Financial Protection. Send these comments by email to
[email protected] or by fax to (202) 395-6974. If you wish to
share your comments with the Bureau, please send a copy of these
comments as described in the Addresses section above. The ICR submitted
to OMB requesting approval under the PRA for the information collection
requirements contained herein is available at www.regulations.gov as
well as on OMB's public-facing docket at www.reginfo.gov.
Title of Collection: Debt Collection Practices in Connection with
the Global COVID-19 Pandemic (Regulation F).
OMB Control Number: 3170-00xx.
Type of Review: Request for a new OMB Control Number. Affected
Public: Private Sector.
Estimated Number of Respondents: 500.\157\
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\157\ The Bureau shares enforcement authority under the FDCPA
with the Federal Trade Commission. To avoid double-counting, the
Bureau allocates to itself half of the estimated paperwork burden
under the interim final rule by dividing the burden hours even
between the agencies. However, since the Bureau has joint authority
over the respondents themselves, the Bureau retains the entity count
of all affected respondents as shown above.
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Estimated Total Annual Burden Hours: 3,000.
The Bureau has a continuing interest in the public's opinion of its
collections of information. At any time, comments regarding the burden
estimate, or any other aspect of the information collection, including
suggestions for reducing the burden, may be sent to the Consumer
Financial Protection Bureau (Attention: PRA Office), 1700 G Street NW,
Washington, DC 20552, or by email to [email protected].
Where applicable, the Bureau will display the control number
assigned by OMB to any documents associated with any information
collection requirements adopted in this interim final rule.
X. Congressional Review Act
Pursuant to the Congressional Review Act,\158\ the Bureau will
submit a report containing this interim final rule and other required
information to the U.S. Senate, the U.S. House of Representatives, and
the Comptroller General of the United States prior to the interim final
rule's published effective date. The Office of Information and
Regulatory Affairs has designated this interim final rule as a ``major
rule'' as defined by 5 U.S.C. 804(2). As discussed in part IV, the
Bureau finds that there is good cause for the interim final rule to
take effect without prior notice and comment. Accordingly, this interim
final rule may take effect at such time as the Bureau determines.\159\
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\158\ 5 U.S.C. 801 et seq.
\159\ 5 U.S.C. 808(2).
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XI. Signing Authority
The Acting Director of the Bureau, David Uejio, having reviewed and
approved this document, is delegating the authority to electronically
sign this document to Laura Galban, a Bureau Federal Register Liaison,
for purposes of publication in the Federal Register.
List of Subjects in 12 CFR Part 1006
Administrative practice and procedure, Consumer protection, Credit,
Debt collection, Intergovernmental relations.
[[Page 21180]]
Authority and Issuance
For the reasons set forth in the preamble, the Bureau amends
Regulation F, 12 CFR part 1006, as set forth below:
PART 1006--FAIR DEBT COLLECTION PRACTICES ACT (REGULATION F)
0
1. The authority citation for part 1006 is revised to read as follows:
Authority: 12 U.S.C. 5512; 15 U.S.C. 1692l(d), 1692o.
0
2. Subpart B, consisting of Sec. 1006.9, is added to read as follows:
Subpart B--Rules for Debt Collectors Subject to the Fair Debt
Collection Practices Act
Sec. 1006.9 Debt Collection Practices in Connection with the Global
COVID-19 Pandemic.
(a) Purpose and coverage. The purpose of this subpart is to
eliminate certain abusive debt collection practices by debt collectors
related to the global COVID-19 pandemic, to ensure that debt collectors
who refrain from using such abusive debt collection practices are not
competitively disadvantaged, and to promote consistent State action to
protect consumers against such debt collection abuses. This subpart
applies to debt collectors, as defined in FDCPA section 803(6), 15
U.S.C. 1692(a)(6), other than a person excluded from coverage by
section 1029(a) of the Consumer Financial Protection Act of 2010, title
X of the Dodd-Frank Act, 12 U.S.C. 5519(a).
(b) Definitions. For purposes of this subpart, the following
definitions apply:
(1) The terms consumer, debt, and debt collector have the same
meaning given to them in FDCPA section 803, 15 U.S.C. 1692a.
(2) The term CDC Order means the order issued by the Centers for
Disease Control and Prevention titled Temporary Halt in Residential
Evictions to Prevent the Further Spread of COVID-19 (86 FR 16731 (Mar.
31, 2021)), as extended by the Centers for Disease Control and
Prevention.
(3) The term eviction notice means the earliest of any written
notice that the laws of any State, locality, territory, or tribal area
require to be provided to a consumer before an eviction action against
the consumer may be filed.
(c) Prohibitions. During the effective period of the CDC Order, a
debt collector collecting a debt in any jurisdiction in which the CDC
Order applies must not, in connection with the collection of that debt:
(1) File an eviction action for non-payment of rent against a
consumer to whom the CDC Order reasonably might apply without
disclosing to that consumer clearly and conspicuously in writing, on
the date that the debt collector provides the consumer with an eviction
notice or, if no eviction notice is required by applicable law, on the
date that the eviction action is filed, that the consumer may be
eligible for temporary protection from eviction under the CDC Order; or
(2) Falsely represent or imply to a consumer that the consumer is
ineligible for temporary protection from eviction under the CDC Order.
0
3. Supplement I to part 1006 is added to read as follows:
Supplement I to Part 1006--Official Interpretations
Introduction
1. Official status. This commentary is the vehicle by which the
Bureau of Consumer Financial Protection supplements Regulation F, 12
CFR part 1006. The provisions of the commentary are issued under the
same authorities as the corresponding provisions of Regulation F and
have been adopted in accordance with the notice-and-comment procedures
of the Administrative Procedure Act (5 U.S.C. 553). Unless specified
otherwise, references in this commentary are to sections of Regulation
F or the Fair Debt Collection Practices Act (FDCPA) (15 U.S.C. 1692 et
seq.). No commentary is expected to be issued other than by means of
this Supplement I.
Subpart B--Rules for Debt Collectors Subject to the Fair Debt
Collection Practices Act
Section 1006.9--Debt Collection Practices in Connection With the Global
COVID-19 Pandemic
9(b) Definitions.
9(b)(3).
1. Examples. Section 1006.9(b)(3) defines eviction notice as the
earliest of any written notice that the laws of any State, locality,
territory, or tribal area require to be provided to a consumer before
an eviction action against the consumer may be filed. The term eviction
notice includes, for example, notices to quit, notices to pay rent or
quit, and notices to terminate tenancy.
9(c) Prohibitions.
9(c)(1).
1. Eviction action for non-payment of rent. Section 1006.9(c)(1)
provides that, during the effective period of the CDC Order, a debt
collector collecting a debt in any jurisdiction in which the CDC Order
applies must not file an eviction action for non-payment of rent
against a consumer to whom the CDC Order reasonably might apply without
making the disclosure described in Sec. 1006.9(c)(1). A debt collector
does not file an eviction action for non-payment of rent if the debt
collector files the eviction action based solely on the consumer
engaging in one or more of the following actions: Criminal activity
while on the premises; threatening the health or safety of other
residents; damaging or posing an immediate and significant risk of
damage to property; violating any applicable building code, health
ordinance, or similar regulation relating to health and safety; or
violating any other contractual obligation, other than the timely
payment of rent or similar housing-related payment (including non-
payment or late payment of fees, penalties, or interest).
2. Reasonably might apply. Section 1006.9(c)(1) requires a debt
collector to provide the disclosure described in Sec. 1006.9(c)(1) to
any consumer to whom the CDC Order reasonably might apply. A consumer
to whom the CDC Order reasonably might apply is a consumer who
reasonably might be eligible to be a covered person as defined in the
CDC Order. A consumer is not reasonably eligible to be a covered person
if the debt collector has knowledge that a consumer is not eligible for
protection under the CDC Order. However, nothing in Sec. 1006.9(c)(1)
prohibits a debt collector from providing the disclosure to a consumer
even if the consumer might not reasonably be eligible to be a covered
person. A debt collector therefore may comply with the requirement to
provide the disclosure to any consumer to whom the CDC Order reasonably
might apply by, for example, providing the disclosure to each consumer
against whom the debt collector files an eviction action for non-
payment of rent. A debt collector does not violate FDCPA sections 807
(15 U.S.C. 1692e) or 808 (15 U.S.C. 1692f) merely because the debt
collector provides the disclosure to consumers as described in this
comment 9(c)(1)-2 even if the consumer is not reasonably eligible to be
a covered person.
3. Provision of disclosure. Section 1006.9(c)(1) requires a debt
collector to disclose to the consumer, on the date that the debt
collector provides the consumer with an eviction notice or, if no
eviction notice is required by applicable law, on the date that the
eviction action is filed, that the consumer may be eligible for
temporary protection from eviction under the CDC Order. A debt
collector may satisfy this requirement by, for example, delivering the
disclosure to the address that is the subject of eviction proceedings;
the debt collector is not required to ensure that
[[Page 21181]]
the consumer actually receives the disclosure. A debt collector may,
but is not required to, provide the disclosure at the same time that
the debt collector provides the consumer with any eviction notice or
serves the consumer with any eviction action. For example, a debt
collector may, but is not required to, include the disclosure in an
envelope either on or with the eviction notice or in the same mailing
in which the debt collector serves the consumer with an eviction
action.
4. Frequency of disclosure. Section 1006.9(c)(1) does not require a
debt collector to provide the disclosure described in Sec.
1006.9(c)(1) more than once. However, nothing in Sec. 1006.9(c)(1)
prohibits a debt collector from providing the disclosure more than
once, such as in each subsequent communication with the consumer. In
addition, a debt collector does not violate FDCPA sections 807 (15
U.S.C. 1692e) or 808 (15 U.S.C. 1692f) merely because the debt
collector provides the disclosure more than once.
5. Sample language. Section 1006.9(c)(1) requires a debt collector
to disclose that the consumer may be eligible for temporary protection
from eviction under the CDC Order.
i. A debt collector may use, but is not required to use, the
following language to satisfy Sec. 1006.9(c)(1): ``Because of the
global COVID-19 pandemic, you may be eligible for temporary protection
from eviction under Federal law. Learn the steps you should take now:
visit www.cfpb.gov/eviction or call a housing counselor at 800-569-
4287.'' A debt collector does not violate FDCPA sections 807 (15 U.S.C.
1692e) or 808 (15 U.S.C. 1692f) merely because the debt collector
provides the sample language in this comment 9(c)(1)-5.i to a consumer
in a jurisdiction in which the CDC Order does not apply.
ii. Alternatively, a debt collector may use, but is not required to
use, the following language to satisfy Sec. 1006.9(c)(1): ``Because of
the global COVID-19 pandemic, you may be eligible for temporary
protection 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 www.cfpb.gov/eviction or call a housing
counselor at 800-569-4287.'' A debt collector does not violate FDCPA
sections 807 (15 U.S.C. 1692e) or 808 (15 U.S.C. 1692f) merely because
the debt collector provides the sample language in this comment
9(c)(1)-5.ii to a consumer in a jurisdiction in which only the CDC
Order applies or in which the CDC Order does not apply.
6. Clear and conspicuous. A debt collector must provide the
disclosure described in Sec. 1006.9(c)(1) clearly and conspicuously in
writing. Clear and conspicuous means readily understandable. The
location and type size also must be readily noticeable and legible to
consumers, although no minimum type size is mandated.
Dated: April 16, 2021.
Laura Galban,
Federal Register Liaison, Bureau of Consumer Financial Protection.
[FR Doc. 2021-08303 Filed 4-21-21; 8:45 am]
BILLING CODE 4810-AM-P