The debt collection industry is set to have a busy year adjusting to several “new normals” that are either already at its doorstep or are making their way over. Last year saw a lot of groundwork laid for new laws and regulations that will impact how debt collectors conduct business, and these new requirements will come to fruition in 2020. Below are five key items that 2020 has in store for the industry.
1. CCPA Implementation
Ready or not, the California Consumer Privacy Act (CCPA) is now in effect. The law aims to give consumers knowledge and control of their personal information: what data is collected, how companies use that data, and how to stop that use.
The CCPA came under criticism for how hastily the state legislature passed it and for the challenges it presents to implementation. California’s Attorney General (AG). who is tasked with enforcement of the new law, held several public forums both, both in early and late 2020 to receive public input on the CCPA and, more recently, on the AG’s proposed regulations.
Companies have scrambled to do the best they could to prepare. Many pre-implementation efforts dominated much of 2019, including mapping out company data, setting up procedures for receiving and processing consumer requests, and trying to figure out what type of designation the company has per the CCPA’s complicated definitions. (For more information, or if your company is still struggling to figure out a way forward, watch our webinar on CCPA here.)
As of January 1, 2020, the law is in effect. The AG’s office is required to provide CCPA regulations by July 1 of this year. It will be an interesting year to see how consumers react to their new rights, whether companies’ procedures are sufficient to meet the CCPA’s purpose, and how the AG will move forward in regulating the law.
And let’s not forget that legislatures of several other states have pending consumer privacy laws as well. The National Conference of State Legislatures has a chart outlining what’s going on in each state.
2. CFPB Final Debt Collection Rules
The wait for the Consumer Financial Protection Bureau’s (CFPB) final rules for debt collection will finally be over. After a lot of research, several delays, congressional hearings, and busy comment periods to both the Advance Notice of Proposed Rulemaking (ANPRM) and the Notice of Proposed Rulemaking (NPRM), the final rules are set to be released in 2020.
What will the final rules look like? Nobody but the CFPB knows for sure, but it’s predicted that they will largely resemble the NPRM. So what is the “new normal” under the new rules?
- Debt collectors will have ground rules for communicating with consumers through digital channels.
- Strong consent management procedures will be required to take advantage of the rule’s digital communication allowance.
- Call caps will likely be a thing.
- Debt collectors will have some form of a safe harbor validation notice to use.