The comments note ambiguities about claims concerning the role and behavior of “debt collectors” in eviction proceedings.
5/10/2021 11:30
ACA International is seeking clarification from the Consumer Financial Protection Bureau on its interim final rule in support of the Centers for Disease Control and Prevention (CDC)’s eviction moratorium.
ACA filed comments on the interim final rule Friday after collecting member feedback from those impacted by it. The rule seeks to clarify accountability for illegal evictions under the Fair Debt Collection Practices Act.
The CFPB’s rule requires “debt collectors” to provide written notice to tenants of their rights under the eviction moratorium and prohibits “debt collectors” from misrepresenting tenants’ eligibility for protection from eviction under the moratorium, ACA previously reported. Attorneys who engage in eviction proceedings on behalf of landlords or residential property owners to collect unpaid residential rent may be “debt collectors” as defined by the FDCPA.
The interim final rule took effect on May 3, 2021; however, the opportunity to comment was available through May 7.
“In its outreach to membership, ACA only heard from one member, out of 2,100, who is connected to this type of debt collection,” said Vice President and Senior Counsel of Federal Advocacy Leah Dempsey. “However, we can assume there are likely a limited number of other members throughout the country that are connected to the landlord-tenant relationship by providing debt collection services for unpaid legal obligations. The ACA member who said they do work in this space stated that their agency does not engage in eviction proceedings, but they do help landlord clients by using an attorney to obtain money judgments after their eviction attorney has obtained a judgment for possession and the tenant has moved out. The final money judgment is then assigned to the agency for collection.”
The CFPB interim final rule states that:
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. This feedback includes, among other things, allegations that debt collectors have engaged in eviction-related conduct that in their view violates the FDCPA.
“This is the only evidence the CFPB points to that noncompliance with the CDC order is a widespread and abused practice in the debt collection market,” Dempsey said. “ACA questions the validity of this hearsay, absent additional data, or information about a specific problem, especially since it does not appear to be an area that many debt collectors work in.”
A recent court case also demonstrates the need for more clarity from the CFPB on this issue.
On May 5, 2021, in the case Alabama Association of Realtors, et al. v. U.S. Department of Health and Human Services, et al., the U.S. District Court for the District of Columbia struck down the CDC’s eviction moratorium. The question before the court was, does the Public Health Service Act grant the CDC the legal authority to impose a nationwide eviction moratorium? The D.C. Circuit found that it does not.
“Since a federal court struck the CDC order down, it is not entirely clear how the ARM industry can and should comply with the CFPB interim rule,” Dempsey said. “As such, that must be addressed before the CFPB moves forward with its interim final rule.”
Read ACA’s complete comments here.