On February 21, 2020, the CFPB issued a Supplemental Notice of Proposed Rulemaking regarding the collection of time-barred debt. In this proposal, which would supplemnt the May 2019 proposal on debt collection practices, the Bureau is proposing to prohibit collectors from using non-litigation means (such as calls) to collect on time-barred debt unless collectors disclose to consumers during the initial contact and on any required validation notice that the debt is time-barred. The Bureau explains that their research found that a time-barred debt disclosure will help consumers understand that they cannot be sued if they do not pay such debt, which can help consumers make better informed decisions whether to pay the debt or not.
The Supplemental proposed rule also proposes model language and forms that debt collectors could use to comply with the proposed disclosure requirements. As with the May 2019 NPRM, the Supplemental NPRM also proposes to require disclosures only if a debt collector knows or should know that the debt is time barred to address debt collector liability if there was too much uncertainty as to whether a debt was time-barred. Comments on the proposal will be due 60 days after the date of publication in the Federal Register.
The full supplemental proposal can be found here.