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Federal Register / Vol. 85, No. 42 / Tuesday, March 3, 2020 / Proposed Rules

BUREAU OF CONSUMER FINANCIAL
PROTECTION
12 CFR Part 1006
[Docket No. CFPB–2020–0010]
RIN 3170–AA41

Debt Collection Practices (Regulation
F)
Bureau of Consumer Financial
Protection.
ACTION: Supplemental notice of
proposed rulemaking.
AGENCY:

The Bureau of Consumer
Financial Protection (Bureau) proposes
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. On May 21,
2019, the Bureau published in the
Federal Register a proposed rule (May
2019 Proposed Rule) that would
prescribe Federal rules governing the
activities of debt collectors, as that term
is defined in the FDCPA. This proposal
supplements the May 2019 Proposed
Rule by proposing to require debt
collectors to make certain disclosures
when collecting time-barred debts.
DATES: Comments must be received on
or before May 4, 2020.
ADDRESSES: You may submit comments,
identified by Docket No. CFPB–2020–
0010 or RIN 3170–AA41, by any of the
following methods:
• Federal eRulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
• Email: 2020-NPRM-DebtCollection@
cfpb.gov. Include Docket No. CFPB–
2020–0010 or RIN 3170–AA41 in the
subject line of the email.
• Mail/Hand Delivery/Courier:
Comment Intake, Bureau of Consumer
Financial Protection, 1700 G Street NW,
Washington, DC 20552.
Instructions: The Bureau encourages
the early submission of comments. All
submissions should include the agency
name and docket number or Regulatory
Information Number (RIN) for this
rulemaking. Because paper mail in the
Washington, DC area and at the Bureau
is subject to delay, commenters are
encouraged to submit comments
electronically. In general, all comments
received will be posted without change
to http://www.regulations.gov. In
addition, 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 10:00 a.m. and 5:00 p.m. Eastern
Time. You can make an appointment to

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inspect the documents by telephoning
202–435–9169.
All comments, including attachments
and other supporting materials, will
become part of the public record and
subject to public disclosure. Proprietary
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, or Kristin
McPartland, Senior Counsels, Office of
Regulations, at 202–435–7700. If you
require this document in an alternative
electronic format, please contact CFPB_
[email protected].
SUPPLEMENTARY INFORMATION:
I. Summary of the Proposed Rule
The Bureau proposes to amend
Regulation F, which implements the
FDCPA, to require debt collectors, as
that term is defined in the FDCPA,1 to
make certain disclosures when
collecting time-barred debts. Timebarred debts are debts for which the
applicable statute of limitations has
expired. The Bureau proposes to require
a debt collector collecting a debt that the
debt collector knows or should know is
time barred to disclose: (1) That the law
limits how long the consumer can be
sued for a debt and that, because of the
age of the debt, the debt collector will
not sue the consumer to collect it; and
(2) if the debt collector’s right to bring
a legal action against the consumer to
collect the debt can be revived under
applicable law, the fact that revival can
occur and the circumstances in which it
can occur. The Bureau proposes model
language and forms that debt collectors
could use to comply with the proposed
disclosure requirements.
The Bureau proposes that the effective
date of the final rule would be one year
after the final rule is published in the
Federal Register. The Bureau requests
comment on this proposed effective
date.
II. Background
A. In General
Statutes of limitations establish time
limits for bringing suit on legal claims.2
They serve several purposes.3 First,
1 15 U.S.C. 1692–1692p. This proposal would
cover the same universe of debt collectors as the
May 2019 Proposed Rule, i.e., only FDCPA-covered
debt collectors. 15 U.S.C. 1692a(6). Creditors
therefore would only have to comply to the extent
they are FDCPA-covered debt collectors.
2 See generally Lozano v. Montoya Alvarez, 572
U.S. 1, 14 (2014).
3 See generally Rotella v. Wood, 528 U.S. 549, 555
(2000) (identifying ‘‘the basic policies of all

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statutes of limitations advance a
defendant’s interest in repose. That is,
they reflect the legislative judgment that
it is ‘‘unjust to fail to put the adversary
on notice to defend within a specified
period of time.’’ 4 Second, statutes of
limitations eliminate stale claims. That
is, they protect defendants and the
courts from having to deal with cases in
which ‘‘the search for truth may be
seriously impaired by the loss of
evidence, whether by death or
disappearance of witnesses, fading
memories, disappearance of documents,
or otherwise.’’ 5 Third, statutes of
limitations provide ‘‘certainty about a
plaintiff’s opportunity for recovery and
a defendant’s potential liabilities.’’ 6
A time-barred debt is a debt for which
the applicable statute of limitations has
expired. For most debts, State law
supplies the applicable statute of
limitations.7 The length of the
limitations period varies by State and
debt type. Most statutes of limitations
applicable to debt collection claims are
between three and six years, although
some are as long as 15 years.8
Currently, in most States, expiration
of the statute of limitations, if raised by
the consumer as an affirmative defense,
precludes the debt collector from
recovering on the debt through
litigation,9 but it does not extinguish the
debt itself.10 In these jurisdictions, a
limitations provisions’’ as ‘‘repose, elimination of
stale claims, and certainty’’).
4 United States v. Kubrick, 444 U.S. 111, 117
(1979).
5 Id.
6 Young v. United States, 535 U.S. 43, 47 (2002)
(quoting Rotella, 528 U.S. at 555).
7 Federal law sometimes establishes the statute of
limitations. For example, legal actions to recover
certain telecommunications debt are subject to a
statute of limitations set by Federal law. See 47
U.S.C. 415(a).
8 See Fed. Trade Comm’n, The Structure and
Practices of the Debt Buying Industry, at 42 (Jan.
2013), https://www.ftc.gov/sites/default/files/
documents/reports/structure-and-practices-debtbuying-industry/debtbuyingreport.pdf (hereinafter
FTC Debt Buying Report).
9 As a result, many courts have held that suing
or threatening to sue on time-barred debts is an
unfair or deceptive practice under the FDCPA. See,
e.g., Pantoja v. Portfolio Recovery Assocs., LLC, 852
F.3d 679, 683 (7th Cir. 2017) (noting that ‘‘a debt
collector violates the [FDCPA] by suing to collect
a time-barred debt after the statute of limitations
has run and bars the suit’’); Crawford v. LVNV
Funding, LLC, 758 F.3d 1254, 1259 (11th Cir. 2014)
(‘‘Federal circuit and district courts have uniformly
held that a debt collector’s . . . filing a time-barred
suit in state court to recover [a time-barred] debt
violates [the FDCPA].’’). The Bureau’s May 2019
Proposed Rule would prohibit debt collectors from
suing or threatening to sue consumers to collect
debts the debt collectors know or should know are
time barred. See 84 FR 23274, 23327–29, 23403
(May 21, 2019).
10 In Mississippi and Wisconsin, debts are
extinguished when the applicable statute of
limitations expires. See Miss. Code Ann. 15–1–3
(‘‘The completion of the period of limitation

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debt collector may use non-litigation
means, such as letters and telephone
calls, to collect a time-barred debt, as
long as those means do not violate the
FDCPA or other laws. As courts have
recognized, a consumer who cannot be
sued on a debt may still feel a moral
obligation to pay.11 In addition, a
consumer may pay a time-barred debt
believing that doing so will improve the
consumer’s credit report.12
In many States, a debt collector’s right
to sue on a time-barred debt can be
‘‘revived’’ if certain conditions are met.
Revival extinguishes the consumer’s
right to raise expiration of the statute of
limitations as an affirmative defense to
litigation; that is, it revives the debt
collector’s right to sue to collect the
debt. There are generally two
circumstances in which State laws
permit revival. First, in some States, a
consumer’s partial payment on a timebarred debt revives the debt collector’s
right to sue.13 One possible theory
underlying these laws is that a partial
payment ‘‘is an acknowledgement of the
existence of the indebtedness, which
raises an implied promise to continue
the obligation and to pay the
balance.’’ 14 Second, in some States, a
consumer’s written acknowledgement of
a time-barred debt revives the debt
collector’s right to sue.15 One possible
prescribed to bar any action, shall defeat and
extinguish the right as well as the remedy.’’); Wis.
Stat. Ann. 893.05 (‘‘When the period within which
an action may be commenced on a Wisconsin cause
of action has expired, the right is extinguished as
well as the remedy.’’). North Carolina prohibits a
‘‘debt buyer’’ from collecting or attempting to
collect a debt when the debt buyer ‘‘knows, or
reasonably should know, that such collection is
barred by the applicable statute of limitations.’’ N.C.
Gen. Stat. 58–70–115(4).
11 See, e.g., Pantoja, 852 F.3d at 684 (‘‘The
creditor retains the right to appeal to the debtor to
honor the debt out of a sense of moral obligation
even if the legal obligation can no longer be
enforced in court.’’); Buchanan v. Northland Grp.,
Inc., 776 F.3d 393, 399 (6th Cir. 2015) (‘‘Legal
defenses are not moral defenses . . . [a]nd a
creditor remains free, in the absence of a
bankruptcy order or something comparable
preventing it from trying to collect the debt, to let
the debtor know what the debt is and to ask her to
pay it.’’); McMahon v. LVNV Funding, LLC, 744
F.3d 1010, 1020 (7th Cir. 2014) (‘‘[S]ome people
might consider full debt re-payment a moral
obligation, even though the legal remedy for the
debt has been extinguished.’’).
12 Section 605(a)(4) of the Fair Credit Reporting
Act generally establishes a seven-year period for
reporting information about accounts placed for
collection; after this period has elapsed, the debt
generally cannot appear on a consumer report. 15
U.S.C. 1681c(a)(4). Because the statute of
limitations on a debt collection claim is less than
seven years in some States, it is possible for a timebarred debt to appear on a consumer’s credit report.
13 See, e.g., Buchanan, 776 F.3d at 399 (applying
Michigan law).
14 Young v. Sorenson, 121 Cal. Rptr. 236, 237 (Ct.
App. 1975).
15 See, e.g., Pariot v. Portfolio Recovery Assocs.,
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theory underlying these laws is that a
written acknowledgement ‘‘raises a new
promise by the debtor to pay [the]
existing debt’’ and is ‘‘enforceable
because it is supported by the existing
legal duty of the promisor.’’ 16
B. Market for Time-Barred Debt
As discussed in the May 2019
Proposed Rule, the debt collection
industry includes creditors, third-party
debt collectors, debt buyers, and a
variety of service providers.17 A creditor
to whom a debt is owed may collect the
debt itself, send the account to a thirdparty debt collector to recover on the
debt in the third-party debt collector’s
name, or sell the debt to a debt buyer.18
By the time a debt becomes time barred
(i.e., after three to six years for many
debts) it may have been placed with
multiple third-party debt collectors, or
purchased and sold by multiple debt
buyers.
The cost to purchase a debt generally
decreases over time as the probability of
recovering on the debt also decreases.19
Because of their age and the general
unavailability of litigation as a
collection method, time-barred debts
typically are available for purchase at a
discount off face value.20 In analyzing
whether, and for what price, to purchase
a portfolio of debts, debt buyers
commonly consider the prevalence of
time-barred debts in the portfolio.21 The
Bureau is unaware of any formal studies
of the size of the market for collection
of time-barred debts.22
C. Consumer Protection Concerns
Regarding Collection of Time-Barred
Debt
The collection of time-barred debt
through non-litigation means can pose
consumer protection concerns.
Consumers unfamiliar with statutes of
limitations may take away from a debt
*3 (C.D. Cal. June 25, 2019) (applying California
law).
16 United States v. Glens Falls Ins. Co., 546 F.
Supp. 643, 645 (N.D.N.Y. 1982).
17 See 84 FR 23274, 23276–77 (May 21, 2019).
18 Id. at 23277.
19 See FTC Debt Buying Report, supra note 8, at
23–24; Bureau of Consumer Fin. Prot., Market
Snapshot: Online Debt Sales, at 11 (Jan. 2017),
https://www.consumerfinance.gov/documents/
2249/201701_cfpb_Online-Debt-Sales-Report.pdf
(hereinafter CFPB Online Debt Sales Report).
20 See, e.g., FTC Debt Buying Report, supra note
8, at 23–24; CFPB Online Debt Sales Report, supra
note 19, at 10.
21 FTC Debt Buying Report, supra note 8, at 21.
22 See David E. Reid, Out-of-Statute Debt: What is
a Smart, Balanced, and Responsible Approach, at
5 n.6 (Receivables Mgmt. Ass’n Int’l, White Paper,
2015), https://rmassociation.org/wp-content/
uploads/2017/04/RMA_Whitepaper_OOS.pdf
(noting challenge of developing a reliable
methodology for estimating size of time-barred debt
market).

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collector’s attempt to collect a timebarred debt the misleading impression
that the debt is legally enforceable—
even if the debt collector does not
explicitly threaten litigation. A
consumer with the misimpression that a
time-barred debt is enforceable in court
may pay or prioritize that debt over
another debt or expense, in the mistaken
belief that doing so is necessary to avoid
litigation. The consumer may, in turn,
have less money to pay another debt on
which the consumer can be sued, or to
pay other expenses, such as household
necessities. In the many States that
permit revival, a consumer who makes
a partial payment on a time-barred debt
or acknowledges the debt in writing
may revive the debt collector’s right to
sue.
Some States have attempted to
address these consumer protection
concerns by imposing disclosure
requirements on debt collectors. In these
jurisdictions, a debt collector may not
collect a time-barred debt without
disclosing to the consumer that the debt
is time barred.23 Although their wording
varies, State-mandated time-barred debt
disclosures typically inform the
consumer that the law limits how long
a consumer can be sued on a debt, and
that the debt collector cannot or will not
sue to collect the debt.24 Some States
also require debt collectors to disclose
the circumstances in which the right to
sue on a time-barred debt can be
revived.25
23 See, e.g., Cal. Civ. Code 1788.14(d); Conn. Gen.
Stat. 36a–805(a)(14); Mass. Code Regs., tit. 940,
7.07(24); N.M. Admin. Code 12.2.12.9; N.Y. Comp.
Codes R. & Regs., tit. 23, 1.3; N.C. Gen. Stat. 58–
70–115(1); Tex. Fin. Code Ann. 392–307(e); 6 Vt.
Code R. 031–004–Rule–CF 104.05; 6 Vt. Code R.
3–2–103:CP 104.05(a); W. Va. Code 46a–2–128(f).
24 For example, California law requires debt
collectors to disclose, in relevant part, the following
in the first written communication with a debtor
after the debt has become time barred: ‘‘The law
limits how long you can be sued on a debt. Because
of the age of your debt, we will not sue you for it.’’
Cal. Civ. Code 1788.14(d).
25 For example, New Mexico law provides, in
relevant part, that it is an unfair or deceptive trade
practice for a debt collector to collect or attempt to
collect a debt that the debt collector knows or has
reason to know is time barred unless the debt
collector makes required time-barred debt and
revival disclosures. New Mexico provides the
following safe harbor disclosure:
We are required by New Mexico Attorney General
rule to notify you of the following information. This
information is not legal advice: This debt may be
too old for you to be sued on it in court. If it is
too old, you can’t be required to pay it through a
lawsuit. You can renew the debt and start the time
for the filing of a lawsuit against you to collect the
debt if you do any of the following: Make any
payment of the debt; sign a paper in which you
admit that you owe the debt or in which you make
a new promise to pay; sign a paper in which you
give up (‘‘waive’’) your right to stop the debt
collector from suing you in court to collect the debt.

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Federal regulators also have
highlighted the consumer protection
concerns associated with time-barred
debts. For example, the Federal Trade
Commission (FTC) has published
several reports on the debt collection
industry, each recognizing the potential
that consumers may be misled by the
collection of time-barred debts.26 In
addition, the FTC and the Bureau have
filed amicus briefs addressing the
collection of time-barred debt.27 The
FTC and the Bureau also have brought
enforcement actions against debt
collectors who violated the FDCPA
when collecting time-barred debts; the
injunctive relief in those cases
sometimes required the debt collector to
make time-barred debt disclosures.28
Courts generally have agreed that a
debt collector violates the FDCPA when
its statements would mislead an
unsophisticated consumer to believe
that a time-barred debt is legally
enforceable, regardless of whether the
debt collector expressly threatens
litigation.29 In addition, courts generally
have agreed that a debt collector can use
disclosures to correct misleading
impressions relating to a debt’s
enforceability and the possibility of
revival that arise from the debt
collector’s attempt to collect a timeN.M. Admin. Code 12.2.12.9. See also, e.g., Mass
Code Regs., tit. 94, 7.07(24); N.M. Admin. Code
12.2.12.9; N.Y. Comp. Codes R. & Regs., tit. 23, 1.3;
N.C. Gen. Stat. 58–70–115(1); 6 Vt. Code R. 3–2–
103:CP 104.05(a).
26 See FTC Debt Buying Report, supra note 8, at
44–49; Fed. Trade Comm’n, Repairing a Broken
System: Protecting Consumers in Debt Collection
Litigation and Arbitration (July 2010), at 22–31,
https://www.ftc.gov/sites/default/files/documents/
reports/federal-trade-commission-bureauconsumer-protection-staff-report-repairing-brokensystem-protecting/debtcollectionreport.pdf; Fed
Trade Comm’n, Collecting Consumer Debts: The
Challenges of Change (Feb. 2009), at 62–65, https://
www.ftc.gov/sites/default/files/documents/reports/
collecting-consumer-debts-challenges-changefederal-trade-commission-workshop-report/
dcwr.pdf.
27 See, e.g., Brief of Amici Curiae, Buchanan v.
Northland Grp., Inc., No. 13–2523 (6th Cir. Mar. 5,
2014), https://www.consumerfinance.gov/f/201403_
cfpb_amicus-brief_buchanan-v-northland-groupinc.pdf; Brief of Amici Curiae, Delgado v. Capital
Mgmt. Servs., LP, No. 13–2030 (7th Cir. Aug. 14,
2013), https://www.consumerfinance.gov/f/201309_
cfpb_agency-brief_12-cv-04057.pdf.
28 See, e.g., In re Encore Capital Grp., Inc., Bureau
of Consumer Fin. Prot., File No. 2015–CFPB–0022
(Sept. 9, 2015), at 17; In re Portfolio Recovery
Assocs. LLC, Bureau of Consumer Fin. Prot., File
No. 2015–CFPB–0023 (Sept. 9, 2015), at 15; United
States v. Asset Acceptance, LLC, No. 8:12–cv–182
(M.D. Fla. filed Jan. 30, 2012).
29 See, e.g., Holzman v. Malcolm S. Gerald &
Assocs., 920 F.3d 1264, 1271 (11th Cir. 2019); Tatis
v. Allied Interstate, LLC, 882 F.3d 422, 429 (3d Cir.
2018); Daugherty v. Convergent Outsourcing Inc.,
836 F.3d 507, 509 (5th Cir. 2016); Buchanan v.
Northland Grp., Inc., 776 F.3d 393, 398–99 (6th Cir.
2015).

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barred debt.30 Some courts have found
that a debt collector who seeks payment
on a time-barred debt without disclosing
the debt’s unenforceability (and, where
applicable, the possibility of revival)
may violate the FDCPA, but whether a
particular communication is misleading
in violation of the FDCPA raises a
question of fact.31 Other courts have
held that a debt collector who offers a
settlement or seeks payment on a timebarred debt without disclosing the
debt’s unenforceability (and, where
applicable, the possibility of revival)
violates the FDCPA as a matter of law.32
Some courts have provided debt
collectors with model disclosure
language,33 while others have not.34
Given the current state of the law,
some consumers may not receive a
disclosure about the time-barred status
of a debt in collection, while others may
receive a disclosure containing language
that varies based on jurisdiction. In
addition, debt collectors may be unclear
about their disclosure obligations when
collecting time-barred debt through nonlitigation means. The lack of clarity may
be especially acute in jurisdictions
where courts have not considered
whether the law requires disclosures or
have not provided model disclosure
language. Even in jurisdictions with
State-law disclosure requirements, debt
collectors may not know whether
providing such disclosures is sufficient
to comply with the FDCPA.
III. The Rulemaking Process
Before publishing the May 2019
Proposed Rule, the Bureau engaged in
outreach regarding numerous debt
collection topics, including time-barred
debt. The May 2019 Proposed Rule
described the scope of that outreach,
which also has informed the
development of this proposed rule.35 Of
particular note, the Bureau has met with
stakeholders including consumer
advocates, debt collection trade
associations, industry participants,
academics with expertise in debt
collection, Federal prudential
regulators, and other Federal and State
30 See, e.g., Holzman, 920 F.3d at 1272–73;
Pantoja v. Portfolio Recovery Assocs., LLC, 852 F.3d
679, 685–86 (7th Cir. 2017); Daugherty, 836 F.3d at
513; Buchanan, 776 F.3d at 399–400.
31 See, e.g., Holzman, 920 F.3d at 1269;
Daugherty, 836 F.3d at 513; Buchanan, 776 F.3d at
397–99.
32 See, e.g., Pantoja, 852 F.3d at 682–83, 685–86;
Manuel v. Merchants & Prof’l Credit Bureau, Inc.,
No. 1:18–cv–226–DAE, 2019 WL 3713750, at *9
(W.D. Tex. Aug. 5, 2019); Schafer v. Allied
Interstate LLC, No. 1:17–cv–233, 2019 WL 2710272,
at *10 (W.D. Mich. June 28, 2019).
33 See, e.g., Buchanan, 776 F.3d at 400.
34 See, e.g., Tatis, 882 F.3d at 430; Pantoja, 852
F.3d at 682–83, 685–86.
35 84 FR 23274, 23278–81 (May 21, 2019).

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consumer protection regulators. The
Bureau also has drawn on information
gathered through the more formal
outreach described below.
A. 2013 Advance Notice of Proposed
Rulemaking
The Bureau issued an Advance Notice
of Proposed Rulemaking (ANPRM)
regarding debt collection in November
2013.36 The ANPRM sought information
about an array of debt collection
practices, including the use of
disclosures, such as time-barred debt
disclosures, in debt collection. Among
other things, the Bureau requested
comment on whether a debt collector
should be required to disclose that a
debt is time barred; that the debt
collector cannot lawfully sue to collect
it; and that, if applicable under State
law, a consumer’s partial payment
revives the debt collector’s right to sue
for the entire amount.37
The Bureau received more than
23,000 comments in response to the
ANPRM, including nearly 400 non-form
comments submitted by consumers,
consumer advocates, debt collection
industry participants and trade
associations, legal groups including law
school clinics, State Attorneys General,
and other stakeholders. Some consumer
advocates, legal groups, and State
Attorneys General supported banning
the collection of time-barred debts.
Some consumer advocates, legal groups,
and one industry commenter also
supported prohibiting revival.
A number of commenters addressed
the merits of time-barred debt
disclosures. Consumer advocates and
State Attorneys General supported
disclosures that would inform
consumers when debt collectors are
collecting time-barred debt and, if
applicable, about the possibility of
revival. With a few exceptions, industry
commenters generally opposed such
disclosures. Some industry commenters
favored a disclosure that would provide
consumers general information about
statutes of limitations but that would
not require debt collectors to provide
information about the time-barred status
of particular debts.
B. Qualitative Consumer Testing
In 2014, the Bureau contracted with a
third-party vendor, Fors Marsh Group
(FMG), to assist with developing, and to
conduct qualitative consumer testing of,
debt collection disclosures for
consumers, including disclosures
regarding time-barred debt and revival.
The Bureau sought insight into
36 78
37 Id.

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consumers’ understanding of timebarred debt and revival, as well as
whether and how time-barred debt and
revival disclosures might, if included on
the validation notice, affect consumers’
ability to make decisions. As described
in the May 2019 Proposed Rule, the
Bureau’s qualitative testing took place
during 2014 and 2015 and consisted of
five focus group discussions and two
rounds of 30 one-on-one interviews
with consumers.38
The focus group discussions were
designed to assess consumers’ thoughts
about debt collectors and debt
collection, to evaluate consumers’
perceptions of disclosures provided by
debt collectors, and to measure
consumers’ understanding of their rights
in debt collection, including with
respect to time-barred debt. The first
round of one-on-one interviews (i.e.,
cognitive testing) was designed to assess
how consumers might interact with
different versions of a validation notice,
and how consumers’ behavior might
differ after reading the forms. Regarding
time-barred debt, participants were
shown two different versions of timebarred debt and revival disclosures and
were asked to respond to a survey with
Likert-scale questions.39 The second
round of one-on-one interviews (i.e.,
usability testing) also was designed to
assess consumers’ understanding of
different validation notices and to
evaluate how each of the notices, which
contained one of several different timebarred debt disclosures and, in certain
cases, revival disclosures, might affect
consumer behavior. During this testing,
participants responded to researchers’
comprehension questions and engaged
in additional testing activities.40
38 84

FR 23274, 23279 (May 21, 2019).
Likert-scale is a commonly used research
scale that asks respondents to specify their level of
agreement or disagreement with a series of
statements.
40 Reports prepared by FMG regarding each phase
of the qualitative testing, as well as a report
summarizing all of the qualitative testing, were
published on the Bureau’s website when the May
2019 Proposed Rule was issued. See Fors Marsh
Grp., Debt Collection Focus Groups (Aug. 2014),
https://files.consumerfinance.gov/f/documents/
cfpb_debtcollection_fmg-focus-group-report.pdf
(hereinafter FMG Focus Group Report); Fors Marsh
Grp., Debt Collection Cognitive Interviews (n.d.),
https://files.consumerfinance.gov/f/documents/
cfpb_debtcollection_fmg-cognitive-report.pdf
(hereinafter FMG Cognitive Report); Fors Marsh
Grp., Debt Collection User Experience Study (Feb.
2016), https://files.consumerfinance.gov/f/
documents/cfpb_debtcollection_fmg-usabilityreport.pdf (hereinafter FMG Usability Report); Fors
Marsh Grp., Debt Collection Validation Notice
Research: Summary of Focus Groups, Cognitive
Interviews, and User Experience Testing (Feb.
2016), https://files.consumerfinance.gov/f/
documents/cfpb_debtcollection_fmg-summaryreport.pdf (hereinafter FMG Summary Report).

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As discussed in the May 2019
Proposed Rule, the Bureau’s qualitative
testing found that consumers often are
uncertain about their rights concerning
time-barred debt.41 Focus group
participants said that knowing a debt is
time barred is helpful and important
information. Many participants said that
knowing that a debt was time barred
(and thus better understanding the risk
of a lawsuit regarding that debt) would
affect their decision-making regarding
payments.42 In particular, many
participants said they would be less
likely to pay or prioritize a debt they
knew was time barred.43 The qualitative
testing also suggested that a plainlanguage disclosure could help
consumers understand their rights with
respect to time-barred debt. For
example, nearly all participants in the
Bureau’s qualitative testing who were
provided with a disclosure stating,
‘‘Because of the age of this debt, we
cannot sue you for it’’ understood that
they could not be sued on the debt.44
However, the Bureau’s qualitative
testing also suggested that it could be
challenging to develop an effective
revival disclosure, in part because
consumers find the concept of revival
counterintuitive—that is, consumers
believe that making a payment should
avert the negative consequences of
nonpayment, which is in tension with
being subject to the risk of a lawsuit.45
C. Small Business Review Panel
As discussed in the May 2019
Proposed Rule, in August 2016, the
Bureau convened a Small Business
Review Panel (Small Business Review
Panel or Panel) with the Chief Counsel
for Advocacy of the Small Business
Administration and the Administrator
of the Office of Information and
Regulatory Affairs with the Office of
Management and Budget (OMB).46 As
part of that process, the Bureau
41 See 84 FR 23274, 23328 (May 21, 2019). See
also FMG Focus Group Report, supra note 40, at 9–
10; FMG Cognitive Report, supra note 40, at 36–37;
FMG Summary Report, supra note 40, at 35–36.
42 FMG Summary Report, supra note 40, at 35.
43 FMG Focus Group Report, supra note 40, at 9–
10; FMG Cognitive Report, supra note 40, at 36;
FMG Usability Report, supra note 40, at 75, 78, 80–
81; FMG Summary Report, supra note 40, at 35–36.
44 FMG Usability Report, supra note 40, at 74, 77.
45 Id. at 74–75, 77; FMG Summary Report, supra
note 40, at 37. See also United States v. Asset
Acceptance, LLC, No. 8:12–cv–182, at ¶ 34 (M.D.
Fla. filed Jan. 30, 2012).
46 The Small Business Regulatory Enforcement
Fairness Act of 1996 (SBREFA), as amended by
section 1100G(a) of the Dodd-Frank Act, requires
the Bureau to convene a Small Business Review
Panel before proposing a rule that may have a
substantial economic impact on a significant
number of small entities. See Public Law 104–121,
tit. II, 110 Stat. 847, 857 (1996) (as amended by Pub.
L. 110–28, section 8302 (2007)).

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prepared an outline of proposals under
consideration and the alternatives
considered (Small Business Review
Panel Outline or Outline).47
Among other topics, the Small
Business Review Panel Outline
discussed consumer protection concerns
regarding time-barred debt and a
proposal under consideration to require
disclosures in connection with the
collection of such debt. The Outline
noted that the Bureau was considering
requiring debt collectors collecting on
time-barred debt to provide a brief,
plain-language statement informing the
consumer that, because of the age of the
debt, the debt collector could not sue to
recover it. The Bureau also was
considering proposing that a timebarred debt disclosure made by one debt
collector would bind subsequent debt
collectors who, in turn, would have to
provide the disclosure to the
consumer.48 The Outline noted that the
Bureau was considering how frequently
debt collectors should be required to
provide any such time-barred debt
disclosures (i.e., in the validation notice
only, or in other oral or written
communications with the consumer)
and whether to require such disclosures
only when the debt collector knew or
should have known that the debt was
time barred.49 The Outline also noted
that the Bureau was considering a
proposal to prohibit debt collectors from
collecting time-barred debt that could be
revived under State law unless they
waived the right to sue on the debt.50
The Bureau participated in telephone
conferences and a full-day outreach
meeting to receive feedback on the
Outline from the small entity
representatives participating in the
Panel process. After gathering
information from the small entity
representatives, the Panel issued a
Small Business Review Panel Report
(Report), which set forth findings and
recommendations regarding the
Bureau’s proposals under
consideration.51 The Report noted that
47 Bureau of Consumer Fin. Prot., Small Business
Review Panel for Debt Collector and Debt Buyer
Rulemaking: Outline of Proposals Under
Consideration and Alternatives Considered (July
2016), https://files.consumerfinance.gov/f/
documents/20160727_cfpb_Outline_of_
proposals.pdf (hereinafter Small Business Review
Panel Outline or Outline).
48 Id. at 20–21.
49 Id.
50 Id. at 21.
51 See 84 FR 23274, 23281 (May 21, 2019). The
Small Business Review Panel Report is part of the
administrative record in this rulemaking and is
available to the public on the Bureau’s website. See
generally Bureau of Consumer Fin. Prot., U.S. Small
Bus. Admin., & Office of Mgmt. & Budget, Final
Report of the Small Business Review Panel on the

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some small entity representatives
expressed concern about the proposal
under consideration to require timebarred debt disclosures. Those small
entity representatives stated that it can
be difficult to determine whether debt is
time barred, and they feared potential
lawsuits if good faith determinations
about a debt’s time-barred status proved
wrong.52 One such small entity
representative recommended that a debt
collector should not be liable for failing
to provide a time-barred debt disclosure
if the debt collector made a good-faith
determination, after appropriate
consideration, that the statute of
limitations for that debt had not yet
expired.53 Another small entity
representative said that a time-barred
debt disclosure could mislead a
consumer into believing that the
consumer no longer had any obligation
to pay the debt.54 Regarding the
Bureau’s proposal under consideration
to require waiver of revival in certain
circumstances, one small entity
representative predicted that, if the
Bureau limited the circumstances in
which debt collectors could sue on
revived debts, creditors would be less
motivated to negotiate prolonged
repayment plans and more motivated to
sue consumers before the statute of
limitations expired. The Bureau has
considered the Small Business Review
Panel’s findings and recommendations
in preparing this proposal and also
discusses them in part V.

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D. 2019 Notice of Proposed Rulemaking
In May 2019 the Bureau published a
proposed rule to amend Regulation F,
12 CFR part 1006.55 The May 2019
Proposed Rule would amend Regulation
F to prescribe Federal rules governing
the activities of debt collectors, as that
term is defined in the FDCPA.
Among other things, the Bureau
proposed to interpret and apply FDCPA
section 807’s prohibitions on false or
misleading representations, including
by prohibiting a debt collector from
suing or threatening to sue a consumer
to collect a debt that the debt collector
‘‘knows or should know’’ is time
barred.56 The Bureau proposed the
CFPB’s Proposals Under Consideration for the Debt
Collector and Debt Buying Rulemaking (Oct. 2016),
https://files.consumerfinance.gov/f/documents/
cfpb_debt-collector-debt-buyer_SBREFA-report.pdf
(hereinafter Small Business Review Panel Report or
Report).
52 Small Business Review Panel Report, supra
note 51, at 25.
53 Id. at appendix A (comment of Levy &
Associates, LLC).
54 Id. at 25.
55 84 FR 23274 (May 21, 2019).
56 Id. at 23327–29, 23403 (proposing 12 CFR
1006.26(b) to provide that ‘‘[a] debt collector must

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‘‘know or should know’’ standard in
response to feedback received during
the SBREFA process about the
complexity of determining whether the
statute of limitations for a particular
debt has expired.57 The Bureau stated
that, while debt collectors often will
know, or can readily determine,
whether the statute of limitations has
expired, there may be some instances in
which debt collectors may be uncertain
whether it has expired even after
undertaking a reasonable investigation.
The Bureau noted that this could occur
when, for example, the case law in a
State is unclear as to which statute of
limitations applies to a particular type
of debt. The Bureau also acknowledged,
however, that it could be difficult to
determine whether a ‘‘know or should
know’’ standard has been met. The
Bureau requested comment on the
merits of using that standard, as
opposed to a ‘‘strict liability’’ standard
under which collectors would be liable
for suing or threatening to sue on timebarred debt even if they neither knew
nor should have known that a debt was
time barred.58
The May 2019 Proposed Rule also
stated that the Bureau was likely to
propose that debt collectors must
provide disclosures to consumers when
collecting time-barred debt. The
proposal noted that, before issuing any
such proposal, the Bureau intended to
conduct additional consumer testing of
possible time-barred debt and revival
disclosures, and that the Bureau would
publish the results of such testing for
public comment.59 That testing is now
complete and is summarized in part
III.E. The May 2019 Proposed Rule
reserved proposed 12 CFR 1006.26(c)
and appendix B for any requirements for
time-barred debt and revival
disclosures.60
The comment period for the May 2019
Proposed Rule closed on September 18,
2019,61 and the Bureau received over
14,000 public comments.62 A large
number of comments addressed timebarred debt and the Bureau’s proposed
prohibition regarding suits and threats
of suit on time-barred debt, including
the proposed ‘‘know or should know’’
standard and alternatives for regulating
not bring or threaten to bring a legal action against
a consumer to collect a debt that the debt collector
knows or should know is a time-barred debt’’).
57 See part III.C, supra.
58 84 FR 23274, 23329 (May 21, 2019).
59 Id.
60 Id.
61 84 FR 37806 (Aug. 2, 2019).
62 See Regulations.gov, Debt Collection Practices
(Regulation F) Docket Folder Summary, https://
www.regulations.gov/docket?D=CFPB-2019-0022
(last visited Feb. 18, 2020).

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the collection of time-barred debt, such
as prohibiting the collection of such
debt altogether. The Bureau is
undertaking a complete review of the
comments as part of the process of
taking final action on the May 2019
Proposed Rule. The Bureau crossreferences provisions of the May 2019
Proposed Rule throughout this proposal.
E. Quantitative Consumer Testing
To obtain additional information
about consumer comprehension and
decision-making in response to sample
debt collection disclosures relating to
time-barred debt, in 2017 the Bureau
contracted with ICF International, Inc.
(ICF) to conduct a web survey of
approximately 8,000 individuals
possessing a broad range of
demographic characteristics.63 This
quantitative testing concluded in late
September 2019, and the Bureau 64 and
ICF 65 have published detailed reports
summarizing the testing methodology
and results. The Bureau summarizes the
results below and welcomes feedback
on the full reports, as published on the
Bureau’s website.
Respondents to the web survey were
provided one of two versions of a
vignette in which a consumer incurred
debt to purchase a couch. In one
version, the purchase occurred three
years ago; in the other, it occurred 10
years ago. Respondents were told that
the consumer had not paid off the debt
and had received a validation notice
from a debt collector.
Respondents were randomly shown
one of 11 different versions of a
validation notice. Two versions served
as control conditions. One control was
designed to resemble validation notices
that some debt collectors use today
(Status Quo Notice). The other control
was the Bureau’s model validation
notice as proposed in the May 2019
Proposed Rule (Model Notice).66
Neither of the control notices contained
a time-barred debt or revival disclosure.
63 OMB approved the Bureau’s request to conduct
the survey on May 7, 2019. See Office of Mgmt. &
Budget, Office of Information and Regulatory
Affairs, ICR—OIRA Conclusion, https://
www.reginfo.gov/public/do/PRAViewICR?ref_
nbr=201902-3170-001# (last visited Feb. 18, 2020).
64 See Bureau of Consumer Fin. Prot., Disclosure
of Time-Barred Debt and Revival: Findings from the
CFPB’s Quantitative Disclosure Testing (Feb. 2020),
https://files.consumerfinance.gov/f/documents/
cfpb_debt-collection-quantitative-disclosuretesting_report.pdf (hereinafter CFPB Quantitative
Testing Report).
65 See ICF Int’l, Inc., Quantitative Survey Testing
of Model Disclosure Clauses and Forms for Debt
Collection: Methodology Report (Jan. 21, 2020),
https://files.consumerfinance.gov/f/documents/
cfpb_icf_debt-survey_methodology-report.pdf.
66 See CFPB Quantitative Testing Report, supra
note 64, at 6–9.

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Of the remaining nine tested notices,
four contained variations of a timebarred debt disclosure added to the
Bureau’s model notice (TBD Notices),
and five contained variations of both a
time-barred debt disclosure and a
revival disclosure added to the Bureau’s
model notice (TBD with Revival
Notices).67 The survey used these
various TBD Notices and TBD with
Revival Notices to test whether and how
consumers’ understanding of timebarred debt and revival concepts
changed with differently worded
disclosures.
After viewing their assigned
validation notice, respondents answered
a series of questions designed primarily
to measure their understanding of timebarred debt and revival disclosures (or
their understanding of time-barred debt
and revival concepts without such
disclosures). Respondents were asked
whether, based on what they read in the
notice, they thought a debt collector
would be legally allowed to sue the
consumer to collect the debt if the
consumer: (1) Ignored the notice and
took no action; (2) made a payment; (3)
sent the debt collector a letter
acknowledging the debt; (4) called the
debt collector acknowledging the debt;
or (5) mailed in the tear-off portion of
the validation notice to dispute the debt.
As discussed further in part V, the
quantitative testing results generally
indicate that, in connection with the
collection of a time-barred debt, and at
least in a testing environment, a
validation notice without a time-barred
debt disclosure can leave consumers
with the misleading impression that
debt collectors would be legally allowed
to sue to collect the debt.68 Time-barred
debt disclosures, whether alone or with
a revival disclosure, generally appear to
correct this misimpression. On the other
hand, the quantitative testing results
indicate that a time-barred debt
disclosure alone (i.e., without a revival
disclosure) could lead consumers in
revival States to believe that debt
collectors are legally allowed to sue in
fewer circumstances than they in fact
are. Revival disclosures generally
67 See

id.

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68 Throughout

this proposal, the Bureau refers to
time-barred debts as not ‘‘legally enforceable’’ or
states that debt collectors are not ‘‘legally allowed
to sue’’ to collect them. The Bureau uses these
shorthand phrases to reflect the current state of the
law, i.e., that the statute of limitations generally is
an affirmative defense to a lawsuit on time-barred
debt and, as a result, courts have concluded that
suits or threats of suit on time-barred debt violate
the FDCPA. See supra note 9. As noted, the
Bureau’s May 2019 Proposed Rule also would
prohibit debt collectors from suing or threatening to
sue to collect debts that the debt collectors know
or should know are time barred. Id.

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appear to clarify the circumstances in
which the debt collector’s right to sue
can be revived.69
IV. Legal Authority
The Bureau issues this supplemental
proposal pursuant to its authority under
the FDCPA and the Dodd-Frank Act. As
amended by the Dodd-Frank Act,
FDCPA section 814(d) provides that the
Bureau ‘‘may prescribe rules with
respect to the collection of debts by debt
collectors,’’ as defined in the FDCPA.70
Section 1022(a) of the Dodd-Frank Act
provides that ‘‘[t]he Bureau is
authorized to exercise its authorities
under Federal consumer financial law to
administer, enforce, and otherwise
implement the provisions of Federal
consumer financial law.’’ 71 Section
1022(b)(1) of the Dodd-Frank Act
provides that the Director may prescribe
rules and issue orders and guidance, as
may be necessary or appropriate to
enable the Bureau to administer and
carry out the purposes and objectives of
the Federal consumer financial laws,
and to prevent evasions thereof.72
‘‘Federal consumer financial law’’
includes title X of the Dodd-Frank Act
and the FDCPA.73
A. FDCPA Sections 807 and 808
The Bureau issues this proposal
pursuant to its authority to interpret
FDCPA sections 807 74 and 808.75
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,’’ 76 and then lists,
without limiting the general prohibition,
16 examples of conduct that violate the
section.77 Similarly, FDCPA section 808
generally prohibits a debt collector from
‘‘us[ing] unfair or unconscionable
means to collect or attempt to collect
any debt,’’ and then lists, without
limiting the general prohibition, eight
examples of conduct that violate the
section.78
The Bureau proposes to interpret
FDCPA sections 807 and 808 consistent
with the approach proposed in the May
2019 Proposed Rule for interpreting
FDCPA sections 806 through 808.79
That is, the Bureau proposes to interpret
69 See CFPB Quantitative Testing Report, supra
note 64, at 4.
70 15 U.S.C. 1692l(d).
71 12 U.S.C. 5512(a).
72 12 U.S.C. 5512(b)(1).
73 12 U.S.C. 5481(12)(H), (14).
74 15 U.S.C. 1692e.
75 15 U.S.C. 1692f.
76 15 U.S.C. 1692e.
77 15 U.S.C. 1692e(1)–(16).
78 15 U.S.C. 1692f.
79 84 FR 23274, 23281–82 (May 21, 2019).

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FDCPA sections 807 and 808 in light of:
(1) The FDCPA’s language and purpose;
(2) the general types of conduct
prohibited by sections 807 and 808 and,
where relevant, the specific examples
enumerated in those sections; and (3)
judicial precedent.80
In particular, the Bureau notes that
FDCPA section 807’s and 808’s
examples of prohibited conduct do not
‘‘limit[ ] the general application’’ of the
general prohibitions set forth in those
sections. Accordingly, the Bureau may
prohibit conduct that the specific
examples 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.81 The Bureau
also interprets FDCPA sections 807 and
808 in light of the significant body of
existing court decisions interpreting
those sections, including cases
discussing the collection of time-barred
debt.82 Finally, consistent with the
majority of courts, the Bureau proposes
to interpret FDCPA sections 807 and
808 to incorporate an objective,
‘‘unsophisticated’’ or ‘‘least
sophisticated’’ consumer standard.83
B. Dodd-Frank Act Section 1032
The Bureau also issues this proposal
pursuant to its authority under DoddFrank Act section 1032. Dodd-Frank Act
section 1032(a) provides that the Bureau
may prescribe rules to ensure that the
features of any consumer financial
product or service, ‘‘both initially and
over the term of the product or service,’’
are ‘‘fully, accurately, and effectively
disclosed to consumers in a manner that
permits consumers to understand the
costs, benefits, and risks associated with
the product or service, in light of the
facts and circumstances.’’ 84 Under
Dodd-Frank Act section 1032(a), the
Bureau is empowered to prescribe rules
regarding the disclosure of the
‘‘features’’ of consumer financial
products and services generally.
Accordingly, the Bureau may prescribe
rules containing disclosure
requirements even if other Federal
consumer financial laws do not
specifically require disclosure of such
features. Dodd-Frank Act section
80 Id.

at 23281–83.
at 23282.
82 Id. See, e.g., Holzman v. Malcolm S. Gerald &
Assocs., 920 F.3d 1264 (11th Cir. 2019); Tatis v.
Allied Interstate, LLC, 882 F.3d 422 (3rd Cir. 2018);
Pantoja v. Portfolio Recovery Assocs., LLC, 852 F.3d
679 (7th Cir. 2017); Daugherty v. Convergent
Outsourcing Inc., 836 F.3d 507 (5th Cir. 2016);
Buchanan v. Northland Grp., Inc., 776 F.3d 393 (6th
Cir. 2015); McMahon v. LVNV Funding, LLC, 744
F.3d 1010, 1020 (7th Cir. 2014).
83 84 FR 23282 (May 21, 2019).
84 12 U.S.C. 5532(a).
81 Id.

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1032(b)(1) provides that ‘‘any final rule
prescribed by the Bureau under this
section requiring disclosures may
include a model form that may be used
at the option of the covered person for
provision of the required
disclosures.’’ 85 Dodd-Frank Act section
1032(b)(2) provides that such a model
form ‘‘shall contain a clear and
conspicuous disclosure that at a
minimum—(A) uses plain language
comprehensible to consumers; (B)
contains a clear format and design, such
as an easily readable type font; and (C)
succinctly explains the information that
must be communicated to the
consumer.’’ 86 Dodd-Frank Act section
1032(b)(3) provides that any such model
form ‘‘shall be validated through
consumer testing.’’ 87
Dodd-Frank Act section 1032(c)
provides that, in prescribing rules
pursuant to Dodd-Frank Act section
1032, the Bureau ‘‘shall consider
available evidence about consumer
awareness, understanding of, and
responses to disclosures or
communications about the risks, costs,
and benefits of consumer financial
products or services.’’ 88 Dodd-Frank
Act section 1032(d) provides that ‘‘[a]ny
covered person that uses a model form
included with a rule issued under this
section shall be deemed to be in
compliance with the disclosure
requirements of this section with
respect to such model form.’’ 89
V. Section-by-Section Analysis

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Section 1006.26
Barred Debts

Collection of Time-

26(c) Disclosures Required
For the reasons discussed below, the
Bureau proposes § 1006.26(c) to require
debt collectors who are collecting debts
that they know or should know are time
barred to provide time-barred debt
disclosures and, if applicable, revival
disclosures to consumers. Proposed
§ 1006.26(c)(1) and (2) sets forth content
and timing requirements, and proposed
§ 1006.26(c)(3) sets forth formatting
requirements and a safe harbor for
making the disclosures.
The Bureau proposes § 1006.26(c)
pursuant to its authority under FDCPA
section 814(d) to prescribe rules with
respect to the collection of debts by debt
collectors, and pursuant to its authority
to interpret FDCPA section 807. The
Bureau proposes to interpret FDCPA
section 807’s prohibition on using ‘‘any
85 12

U.S.C. 5532(b)(1).
U.S.C. 5532(b)(2).
87 12 U.S.C. 5532(b)(3).
88 12 U.S.C. 5532(c).
89 12 U.S.C. 5532(d).
86 12

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false, deceptive, or misleading
representation or means in connection
with the collection of any debt’’ to
require debt collectors to make timebarred debt disclosures and, if
applicable, revival disclosures to
consumers because, as discussed below,
a debt collector’s attempt to collect a
time-barred debt is likely to give a
consumer the false impression that the
debt is legally enforceable. This false
impression, as also discussed below, is
likely to affect a consumer’s decision
whether to pay or prioritize the debt.
Thus, when a debt collector collects a
time-barred debt without disclosing that
the debt is time barred, the debt
collector may misrepresent the character
or le gal status of the debt, which
FDCPA section 807(2)(A) specifically
prohibits.
The Bureau also proposes § 1006.26(c)
pursuant to its authority under section
1032(a) of the Dodd-Frank Act. As
discussed in part IV, Dodd-Frank Act
section 1032(a) provides that the Bureau
may prescribe rules to ensure that the
features of any consumer financial
product or service, ‘‘both initially and
over the term of the product or service,’’
are ‘‘fully, accurately, and effectively
disclosed to consumers in a manner that
permits consumers to understand the
costs, benefits, and risks associated with
the product or service, in light of the
facts and circumstances.’’ Under DoddFrank Act section 1002(5) and
(15)(A)(x), collecting debt related to any
consumer financial product or service is
itself a consumer financial product or
service.
Dodd-Frank Act section 1032(c)
provides that, in prescribing rules
pursuant to section 1032 of the DoddFrank Act, the Bureau ‘‘shall consider
available evidence about consumer
awareness, understanding of, and
responses to disclosures or
communications about the risks, costs,
and benefits of consumer financial
products or services.’’ Accordingly, in
developing proposed § 1006.26(c), the
Bureau has considered consumer
complaints, industry disclosure
practices, and other evidence about
consumer awareness, understanding of,
and responses to disclosures or
communications about the risks, costs,
and benefits of consumer financial
products or services. The Bureau has
also considered the evidence developed
through its consumer testing.
The Bureau proposes § 1006.26(c) on
the theory that a debt’s status as time
barred is a feature of debt collection.
Knowing that a debt is time barred may
help a consumer understand the costs,
benefits, and risks associated with
paying or not paying a debt. For the

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reasons described below, the Bureau
believes that requiring debt collectors to
clearly and conspicuously disclose to
consumers when a debt is time barred
and, if applicable, when revival may
occur, using disclosures substantially
similar to those set forth on the model
forms in proposed appendices B–4
through B–7, may ensure that the
features of debt collection are fully,
accurately, and effectively disclosed to
consumers.
26(c)(1) In General
As discussed in part II.C, the nonlitigation collection of time-barred debt
can raise concerns about consumer
deception. If a debt collector attempts to
collect a debt, the consumer may take
away the impression that the debt
collector is legally allowed to sue to
collect it.90 For time-barred debts, this
impression would be false, and this
false impression is likely to affect a
consumer’s decision whether to pay or
prioritize a time-barred debt.
As summarized in part III.E, the
Bureau’s quantitative testing results
suggest that, without a disclosure, many
consumers are likely to believe that a
debt collector is legally allowed to sue
to collect a time-barred debt. For
example, as discussed in the Bureau’s
Quantitative Testing Report, one survey
question asked respondents whether,
based on what they read in a sample
validation notice, they thought the debt
collector would be legally allowed to
sue the debtor if the debtor ignored the
notice and took no action. For the timebarred debts described in the testing
scenarios, the correct answer to this
question was ‘‘no,’’ the debt collector
would not be legally allowed to sue.
However, over 60 percent of
respondents who saw either a Status
Quo or Model Notice (i.e., a validation
notice without a time-barred debt
disclosure) got this question wrong and
replied that the debt collector would be
legally allowed to sue.91
This false impression could affect a
consumer’s decision whether to pay or
prioritize a debt. For example, a
different survey question asked
respondents how likely they would be,
if they were the debtor, either to make
a full or partial payment on the debt or
to ignore the validation notice and not
90 See FTC Debt Buying Report, supra note 8, at
46–47 (‘‘When collectors attempt to recover on
debts, in many circumstances, such efforts may
convey or imply to consumers that the collectors
could sue them if they do not pay.’’). See also, e.g.,
Holzman v. Malcolm S. Gerald & Assocs., Inc., 920
F.3d 1264, 1272 (11th Cir. 2019); Pantoja v.
Portfolio Recovery Assocs., LLC, 852 F.3d 679, 683–
84 (7th Cir. 2017).
91 CFPB Quantitative Testing Report, supra note
64, at 17–18.

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Federal Register / Vol. 85, No. 42 / Tuesday, March 3, 2020 / Proposed Rules
respond to it. Respondents who saw a
validation notice with no time-barred
debt disclosure were more likely than
respondents who saw a validation
notice with such a disclosure to say that
they were ‘‘very likely’’ to make a full
or partial payment and that they were
‘‘very unlikely’’ to ignore the notice.92
These results reflect responses to
hypotheticals in a testing environment,
but they indicate that, if a consumer has
the misimpression that a debt collector
can sue to enforce a time-barred debt,
the consumer may be more likely to pay
or prioritize that debt than if the
consumer knew that doing so was not
necessary to avoid litigation.
Consumers, of course, may choose to
pay time-barred debts for any number of
reasons, including moral ones 93 or in
the belief that doing so will improve
their credit reports.94 However, the
Bureau believes that consumers are
harmed to the extent that they decide to
pay or prioritize time-barred debts over
other debts or expenses such as
household necessities because of a false
understanding that they can be sued.
As discussed in part II.C., several
jurisdictions already require debt
collectors to inform consumers if a debt
is time barred,95 and some debt
collectors also must provide such
disclosures as a result of consent
agreements with law enforcement
agencies, including the Bureau and the
FTC.96 The Bureau’s quantitative testing

supports the conclusion that such a
time-barred debt disclosure can, in fact,
help to correct the misimpression that a
debt collector would be legally allowed
to sue to collect a time-barred debt. As
noted, over 60 percent of respondents
who were shown a validation notice
without a time-barred debt disclosure
answered incorrectly when asked
whether, based on what they read in the
notice, the debt collector would be
legally allowed to sue to collect the
time-barred debt if the debtor ignored
the notice and took no action. By
contrast, over 60 percent of respondents
who received either a TBD or TBD with
Revival Notice (i.e., a validation notice
with a time-barred debt disclosure)
answered this question correctly.97
Although the Bureau’s quantitative
testing found that a time-barred debt
disclosure tended to correct the
misimpression that a debt collector
would be legally allowed to sue to
collect a time-barred debt, the testing
also revealed that, in States with revival
laws, an unqualified time-barred debt
disclosure could create its own risk of
a consumer taking away a false, material
impression. Specifically, the Bureau’s
quantitative testing found that a timebarred debt disclosure alone (i.e.,
without a revival disclosure) could lead
consumers in revival States to believe
that debt collectors are able to legally
sue them on time-barred debt in fewer
circumstances than they in fact are.98 As

92 Id. at 28–29. The Bureau’s qualitative consumer
testing and other research also suggests that
knowing whether a debt is time barred, and that
debt collectors cannot enforce time-barred debts in
court, may affect a consumer’s decision-making
with respect to the debt. Participants in the
Bureau’s consumer testing said that knowing a debt
is time barred is important and would affect their
decision-making. In particular, many participants
said they would be less likely to pay or prioritize
a debt they knew was time barred. FMG Focus
Group Report, supra note 40, at 9–10; FMG
Cognitive Report, supra note 40, at 36; FMG
Usability Report, supra note 40, at 75, 78, 80–81;
FMG Summary Report, supra note 40, at 35–36. See
also Timothy E. Goldsmith & Nathalie Martin,
Testing Materiality Under the Unfair Practices Acts:
What Information Matters Collecting Time-Barred
Debts? 64 Consumer Fin. L. Q. Rep. 372, at 377–
80 (2010).
93 See, e.g., Pantoja, 852 F.3d at 684; Buchanan
v. Northland Grp., Inc., 776 F.3d 393, 399 (6th Cir.
2015); McMahon v. LVNV Funding, LLC, 744 F.3d
1010, 1020 (7th Cir. 2014).
94 See supra note 12.
95 See, e.g., Cal. Civ. Code 1788.52(d)(3); Conn.
Gen. Stat. 36a–805(a)(14); Mass. Code Regs., tit. 940,
7.07(24); N.M. Code. R. 12.2.12.9(A); N.Y. Comp.
Codes R. & Regs., tit. 23, 1.3; New York City, N.Y.,
Rules, tit. 6, 2–191(a); W. Va. Code 46a–2–128(f).
96 For example, the Bureau has brought
enforcement actions alleging that debt collectors
violated the FDCPA by sending letters containing
time-limited ‘‘settlement’’ offers that failed to
disclose that the debt was time barred and therefore
too old for litigation. Consent Order at ¶¶ 65–69, In
re Encore Capital Grp., Inc., Bureau of Consumer
Fin. Prot., File No. 2015–CFPB–0022 (Sept. 9,

2015), https://files.consumerfinance.gov/f/201509_
cfpb_consent-order-encore-capital-group.pdf;
Consent Order at ¶¶ 56–59, In re Portfolio Recovery
Assocs., LLC, Bureau of Consumer Fin. Prot., File
No. 2015–CFPB–0023 (Sept. 9, 2015), https://
files.consumerfinance.gov/f/201509_cfpb_consentorder-portfolio-recovery-associates-llc.pdf.
Similarly, the FTC has brought an enforcement
action alleging that a debt collector’s collection of
time-barred debts violated the FDCPA where the
debt collector failed to disclose that the debts were
time-barred and that the debt collector’s right to sue
could be revived. Complaint ¶¶ 30–34, 56–58,
United States v. Asset Acceptance, LLC, No. 8:12–
cv–182 (M.D. Fla. Jan. 30, 2012), https://
www.ftc.gov/sites/default/files/documents/cases/
2012/01/120130assetcmpt.pdf. The consent orders
that resolved Encore, Portfolio Recovery, and Asset
Acceptance required the debt collectors in those
cases to make time-barred debt disclosures. Encore
Consent Order at ¶ 133; Portfolio Recovery Consent
Order at ¶ 126; Asset Acceptance Consent Decree at
§ IV, https://www.ftc.gov/sites/default/files/
documents/cases/2012/01/120131assetconsent.pdf.
97 CFPB Quantitative Testing Report, supra note
64, at 17–18. The Bureau’s qualitative testing
supports the same conclusion. Nearly all
participants in the Bureau’s consumer testing who
were provided with a disclosure stating, ‘‘Because
of the age of this debt, we cannot sue you for it’’
understood that they could not be sued on the debt.
FMG Usability Report, supra note 40, at 74, 77.
98 As discussed in part II, in ‘‘revival
jurisdictions,’’ if consumers either make partial
payments on time-barred debts or acknowledge
time-barred debts in writing (or both), debt
collectors once again would be legally allowed to
sue to collect the debts. If a debt collector makes

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discussed in the Bureau’s Quantitative
Testing Report, two survey questions
asked respondents whether, based on
what they read in a sample validation
notice, they thought the debt collector
would be legally allowed to sue the
debtor if the debtor either made a
payment or acknowledged the debt in
writing. For the time-barred debts
described in the testing scenarios, the
correct answer to these questions was
‘‘yes,’’ the debt collector would be
legally allowed to sue. However, more
than 60 percent of respondents who saw
a TBD Notice (i.e., a validation notice
with an unqualified time-barred debt
disclosure) replied incorrectly that the
debt collector would not be legally
allowed to sue.99
As with the false impression that debt
collectors legally are allowed to sue to
collect a time-barred debt even if the
consumer takes no action, the false
impression that debt collectors are not
legally allowed to sue even if the
consumer makes a payment or
acknowledges the debt in writing could
affect a consumer’s decision whether to
pay or prioritize time-barred debts. The
Bureau’s quantitative testing suggests
that, in revival jurisdictions, a timebarred debt disclosure accompanied by
a revival disclosure may help to correct
this misimpression. When respondents
were asked whether, based on what they
read in the notice, the debt collector
would be legally allowed to sue to
collect the time-barred debt if the
consumer either made a payment or
acknowledged the debt in writing, about
70 percent and 60 percent of
respondents, respectively, who received
both a time-barred debt and revival
disclosure answered correctly that the
debt collector would be legally allowed
to sue.100
To address the likelihood that
consumers may be deceived by the nonlitigation collection of time-barred debt,
and pursuant to its authority under
FDCPA sections 814(d) and 807 and
Dodd-Frank Act section 1032, the
Bureau proposes § 1006.26(c)(1) to
require debt collectors who are
collecting time-barred debt to provide
an unqualified time-barred debt disclosure to a
consumer in a revival jurisdiction, that disclosure
would be false for a consumer whose conduct
revived the debt.
99 CFPB Quantitative Testing Report, supra note
64, at 18–20. Although respondents who received
no time-barred debt disclosure at all also tended to
answer these questions incorrectly, respondents
who received an unqualified time-barred debt
disclosure were even more likely to answer these
questions incorrectly. Id. These results suggest that
an unqualified time-barred debt disclosure could
mislead consumers for those scenarios.
100 Id.

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certain disclosures to consumers.101
Specifically, proposed § 1006.26(c)(1)
would provide that a debt collector who
knows or should know that a debt is
time barred when the debt collector
makes the initial communication as
defined in § 1006.34(b)(2) must, in that
initial communication, and on any
validation notice required by
§ 1006.34(a)(1)(i)(B), clearly and
conspicuously provide time-barred debt
and, if applicable, revival disclosures to
consumers.102
Proposed § 1006.26(c)(1) would
require the time-barred debt and, if
applicable, revival disclosures to be
made regarding debts that the debt
collector ‘‘knows or should know’’ are
time barred. As discussed in the May
2019 Proposed Rule and in part III.D,
determining whether the statute of
limitations for a particular debt has
expired can, in certain cases, be a
complex undertaking, and debt
collectors may be uncertain about
whether a particular statute of
limitations has passed even after
conducting a reasonable
investigation.103 For this reason, the
May 2019 Proposed Rule proposed to
prohibit debt collectors from suing or
threatening to sue to collect debts if they
‘‘know or should know’’ that the statute
of limitations has expired.104 In
response to the May 2019 Proposed
Rule, the Bureau received a large
number of comments regarding this
knowledge standard. In general,
industry commenters favored a ‘‘know
or should know’’ standard, while
consumer advocates favored a ‘‘strict

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101 The

requirements of proposed § 1006.26(c)(1)
therefore would apply to FDCPA-covered debt
collectors collecting debt, as that term is defined in
FDCPA section 803(5), regardless of whether the
debt is a consumer financial product or service
debt, as that term is defined in the May 2019
Proposed Rule. See 84 FR 23274, 23399 (May 21,
2019). Consumer financial product or service debts
would include, for example, debts related to
consumer mortgage loans or credit cards. Id. at
23286.
102 The required disclosures are discussed in the
section-by-section analysis of proposed
§ 1006.26(c)(1)(i) and (ii). Proposed
§ 1006.34(c)(2)(xi), discussed below, would amend
the validation notice provisions of the May 2019
Proposed Rule to reflect the disclosures that would
be required by proposed § 1006.26(c)(1).
103 See 84 FR 23274, 23329 (May 21, 2019)
(determining whether the statute of limitations has
expired may involve analyzing which statute of
limitations applies, when the statute of limitations
began to run, and whether the statute of limitations
has been tolled or reset).
104 Id. at 23328–29, 23403. A debt collector would
violate FDCPA section 807’s prohibition on
deception and, if finalized, § 1006.18 in the May
2019 Proposed Rule, by providing the
§ 1006.26(c)(1) disclosures if the debt collector later
sues or threatens to sue to collect the debt. The
Bureau requests comment on whether the final rule
should indicate in rule text or commentary that this
would be a violation.

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liability’’ standard.105 The Bureau is
analyzing those comments as part of the
process of finalizing the May 2019
Proposed Rule. For consistency with
that proposal, the Bureau proposes to
require disclosures under
§ 1006.26(c)(1) only if the debt collector
knows or should know that the debt is
time barred.
Proposed § 1006.26(c)(1) also would
require the time-barred debt and, if
applicable, revival disclosures to be
made clearly and conspicuously. The
Bureau proposes this standard to help
ensure that consumers take away a
truthful, non-misleading impression. A
disclosure that is not clear and
conspicuous will not be effective in
conveying this impression, defeating the
disclosure’s purpose. Proposed
comment 26(c)(1)–1 would clarify that
‘‘clearly and conspicuously’’ for
purposes of § 1006.26(c)(1) means the
same thing as ‘‘clear and conspicuous’’
as the Bureau proposed to define that
term in § 1006.34(b)(1) in the May 2019
Proposed Rule.106 That standard, in
turn, is based on the standard used in
other consumer financial services laws
and their implementing regulations,
including Regulation E Subpart B
(Remittance Transfers).107
Proposed § 1006.26(c)(1) also would
require the time-barred debt and, if
applicable, revival disclosures to be
made in the initial communication as
defined in § 1006.34(b)(2), and on any
validation notice required by
§ 1006.34(a)(1)(i)(B).108 Proposed
§ 1006.26(c)(1) would require a debt
105 Under a ‘‘strict liability’’ standard, for
example, a debt collector would violate the
proposed prohibition against suits or threats of suit
if the debt collector sued or threatened to sue to
collect a debt that a court later determined was time
barred, even if the debt collector had investigated
and reasonably concluded that the debt was not
time barred. This could occur, for example, if State
law applies different statutes of limitations to
different types of debts, and if a court later
determined that a debt collector had applied the
wrong provision in determining whether the debt
was time barred, notwithstanding a reasonable
investigation.
106 Proposed § 1006.34(b)(1) defines ‘‘clear and
conspicuous’’ to mean ‘‘disclosures that are readily
understandable.’’ In the case of written and
electronic disclosures, ‘‘the location and type size
also must be readily noticeable to consumers.’’ In
the case of oral disclosures, ‘‘the disclosures also
must be given at a volume and speed sufficient for
the consumer to hear and comprehend them.’’
107 Regulation E, 12 CFR 1005.31.
108 The Bureau proposes to use the same
definition of ‘‘initial communication’’ proposed in
the May 2019 Proposed Rule. See 84 FR 23274,
23404 (May 21, 2019) (proposing 12 CFR part
1006.34(b)(2) to define ‘‘initial communication’’ in
to mean ‘‘the first time that, in connection with the
collection of a debt, a debt collector conveys
information, directly or indirectly, regarding the
debt to the consumer,’’ other than certain
communications required by law or made in the
form of a formal pleasing in a civil action).

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collector to provide the disclosures in
these communications because, without
the disclosures, the debt collector may
convey a misleading impression about
the legal enforceability of the timebarred debt. In addition, requiring the
disclosures at the time that the debt
collector first communicates with the
consumer in connection with the
collection of the debt and on any
required validation notice should
ensure that consumers receive
information regarding the debt’s legal
enforceability at a time when they may
be evaluating their rights and
obligations regarding the debt, including
whether to pay or prioritize it over other
debts. Proposed comment 26(c)(1)–2
would clarify that a debt collector who
sends a validation notice in the initial
communication pursuant to
§ 1006.34(a)(1)(i)(A) complies with
§ 1006.26(c)(1) by providing the
required disclosures on the validation
notice.
Some stakeholders, including
consumers, consumer groups, and
others who commented on the May
2019 Proposed Rule, have urged the
Bureau to prevent the risk of deception
by prohibiting the collection of timebarred debt and banning revival. These
stakeholders assert, among other things,
that concepts like statutes of limitations
and revival are too complicated to
disclose to consumers effectively. As
discussed above, however, the Bureau’s
quantitative testing results suggest that
disclosures can be effective in
preventing the deception associated
with the collection of time-barred debts
and that, therefore, prohibiting the
collection of time-barred debt and
banning revival are not necessary to
prevent deception. In addition, banning
the collection of time-barred debt could
have unintended consequences for
consumers, such as increased litigation
before expiration of the statute of
limitations. Because disclosures may
adequately address the risks to
consumers, the Bureau proposes to
require disclosures rather than to
prohibit the collection of time-barred
debt and ban revival.
The Bureau requests comment on
proposed § 1006.26(c)(1) and its related
commentary. In particular, the Bureau
requests comment on the merits of using
a ‘‘know or should know’’ standard
versus a ‘‘strict liability’’ standard for
determining when debt collectors must
provide time-barred debt and revival
disclosures. The Bureau also requests
comment on the merits of using, as an
alternative, a ‘‘strict liability’’ standard
with a safe harbor for debt collectors
who provide the disclosures when they

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neither knew nor should have known
the debt was time-barred.
The Bureau also requests comment
on: (1) Whether knowing if a debt is
time barred affects or is likely to affect
a consumer’s conduct relating to the
debt; (2) the frequency with which debt
collectors should be required to provide
required disclosures, including the basis
for requiring more or less frequent
disclosures; (3) whether additional
guidance is needed to address situations
in which a validation notice might be
re-issued voluntarily because, for
example, the consumer requests a copy
or a translation; (4) debt collectors’
current practices with respect to
disclosing whether a debt is time barred
and the circumstances, if any, in which
revival can occur; and (5) debt
collectors’ current practices with respect
to revival, including whether and how
frequently they sue to collect debts
when the right to do so has been
revived.

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26(c)(1)(i)
Proposed § 1006.26(c)(1)(i) sets forth
the disclosure that debt collectors
would be required to provide when
collecting debts that they know or
should know are time barred. Proposed
§ 1006.26(c)(1)(i) would require debt
collectors to disclose that the law limits
how long the consumer can be sued for
a debt and that, because of the age of the
debt, the debt collector will not sue the
consumer to collect it. The disclosure
would be required to be substantially
similar to the disclosure shown on
proposed Model Form B–4 in appendix
B, and debt collectors could comply by
using that model form (or, if making the
disclosure other than on a validation
notice, by using the relevant language
from that model form).109
As discussed in the Bureau’s
Quantitative Testing Report, the Bureau
tested alternative versions of this timebarred debt disclosure, including two
that used the phrase ‘‘will not sue’’ and
two that used the phrase ‘‘cannot sue.’’
A disclosure that uses the phrase ‘‘will
not sue’’ may be more accurate than a
disclosure that uses the phrase ‘‘cannot
sue.’’ A disclosure that uses the phrase
‘‘cannot sue’’ may imply that a debt
collector has definitively determined
that the debt is time barred and that all
subsequent collectors thus would reach
the same conclusion. By contrast, a
‘‘will not sue’’ disclosure merely
represents that the debt collector
believes that the debt is time barred, not
109 See the section-by-section analysis of
proposed § 1006.26(c)(3) regarding proposed
requirements for the form and delivery of the
required disclosures.

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that the debt collector has definitely
determined that it is time barred; it may
not actually be the case that the debt is,
or that a subsequent collector would
conclude that the debt is, time
barred.110 The Bureau’s testing showed
no consistent differences in consumer
understanding between the ‘‘will not
sue’’ and ‘‘cannot sue’’ disclosures.111
As discussed in part III.C, during the
SBREFA process, the Bureau was
considering a proposal to require a debt
collector who was collecting a timebarred debt to disclose that, because of
the age of the debt, the debt collector
‘‘cannot sue to recover it.’’ 112 Several
small entity representatives expressed
concern that the disclosure under
consideration could constitute legal
advice, or that consumers who received
the disclosures could construe them as
legal advice and ask the debt collector
follow-up questions about the debt’s
legal status. Some industry commenters
to the Bureau’s ANPR expressed similar
concerns. As noted, the Bureau does not
believe that the ‘‘will not sue’’
disclosure described in proposed
§ 1006.26(c)(1)(i) constitutes legal
advice. It is neither a statement of what
the law is nor advice to consumers as to
what they should or should not do.
Instead, it is a statement of what the
collector will do. In addition, nothing in
the Bureau’s proposal would require a
debt collector to provide legal advice to
a consumer who requests it. The Bureau
requests comment on proposed
§ 1006.26(c)(1)(i) and on the burden of
making a time-barred debt
determination for debt collectors who
do not sue to collect debts.
26(c)(1)(ii)
Proposed § 1006.26(c)(1)(ii) sets forth
an additional disclosure that debt
collectors would be required to provide
when collecting debts that they know or
should know are time barred if, under
applicable law, the debt collector’s right
to bring a legal against the consumer
could be revived. Under proposed
§ 1006.26(c)(1)(ii), debt collectors would
be required to disclose the fact that
revival can occur and the circumstances
in which it can occur. The disclosure
would be required to be substantially
110 For this reason, a debt collector who provides
the proposed § 1006.26(c)(1) disclosures after
undertaking a reasonable inquiry and concluding
that a debt is time barred would not be liable under
either the FDCPA or Regulation F for having made
the disclosures even if it is determined later that the
debt collector’s conclusion about the debt’s timebarred status was incorrect, as long as the debt
collector honors the disclosures by not suing.
111 CFPB Quantitative Testing Report, supra note
64, at 22–23.
112 Small Business Review Panel Outline, supra
note 47, at 20.

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similar to those shown on proposed
Model Forms B–5 through B–7 in
appendix B, and debt collectors could
comply by using those model forms, as
applicable (or, if making the disclosure
other than on a validation notice, by
using the relevant language from the
model forms).113 Proposed comment
26(c)(1)(ii)–1 would clarify that, to
satisfy the disclosure requirement in
proposed § 1006.26(c)(1)(ii), a debt
collector would be required to
determine which State’s law applies and
the circumstances, if any, in which that
law would permit revival.
The Bureau requests comment on
proposed § 1006.26(c)(1)(ii) and on
comment 26(c)(1)(ii)–1. The Bureau
specifically requests comment on the
burden of requiring all debt collectors to
determine, when collecting debt that
they know or should know is time
barred, which State’s law applies and
the circumstances, if any, under which
that law would permit revival. The
Bureau also specifically requests
comment on the burden of making these
determinations under a strict liability
standard. The Bureau recognizes that
some debt collectors do not sue to
collect any debts (including revived
debts) and that some debts may be
clearly time barred under any applicable
State law. The Bureau requests
comment on the burden in such
circumstances of requiring debt
collectors to conduct the inquiry that
would be required to satisfy proposed
§ 1006.26(c)(1)(ii) (i.e., to make a
disclosure that reflects the applicable
State’s revival law).
26(c)(2) Additional Circumstances in
Which Disclosures Are Required
A debt may become time barred after
a debt collector’s initial communication
with the consumer or after the debt
collector sends the consumer any
validation notice required by
§ 1006.34(a)(1)(i)(B). This could happen,
for example, if a debt collector begins
collecting a debt soon before the statute
of limitations expires, and collection
activities continue after expiration. This
also could happen if a debt collector
begins collecting a debt before the
statute of limitations expires,
warehouses the debt, and resumes
collection activities after expiration.
Relatedly, it may be the case that a debt
collector who does not know, and
should not know, that a debt is time
barred when making the initial
communication with the consumer or
113 See the section-by-section analysis of
proposed § 1006.26(c)(3) regarding proposed
requirements for the form and delivery of the
required disclosures.

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when sending the consumer any
validation notice required by
§ 1006.34(a)(1)(i)(B) later knows, or
should know, that the debt was, in fact,
time barred.
As discussed, the Bureau’s
quantitative testing results indicate that,
without disclosure, few consumers are
likely to recognize that a debt collector
is not legally allowed to sue to collect
a time-barred debt. The quantitative
testing results also indicate that an
unqualified time-barred debt disclosure
provided in a revival State may create
a risk of consumer misunderstanding
about revival. For these reasons, and
pursuant to its authority under FDCPA
sections 814(d) and 807 and Dodd-Frank
Act section 1032(a), the Bureau
proposes § 1006.26(c)(2) to specify
additional circumstances in which debt
collectors would be required to provide
time-barred debt and, if applicable,
revival disclosures.114
Proposed § 1006.26(c)(2)(i) would
require a debt collector who knows or
should know that a debt has become
time barred after the initial
communication as defined in
§ 1006.34(b)(2) but before the debt
collector has sent any validation notice
required by § 1006.34(a)(1)(i)(B) to
provide the disclosures required by
§ 1006.26(c)(1) in the debt collector’s
first communication, if any, with the
consumer on or after the date on which
the debt collector knows or should
know that the debt has become time
barred, and on any validation notice
required by § 1006.34(a)(1)(i)(B). In
addition, proposed § 1006.26(c)(2)(i)
would require a debt collector who
knows or should know that a debt has
become time barred after the debt
collector has made the initial
communication as defined in
§ 1006.34(b)(2) and has sent any
validation notice required by
§ 1006.34(a)(1)(i)(B) to provide the
disclosures required by § 1006.26(c)(1)
in the debt collector’s first
communication, if any, with the
consumer on or after the date on which
the debt collector knows or should
know that the debt became time barred.
Proposed comments 26(c)(2)(i)–1 and –2
provide examples illustrating the rule.
Proposed § 1006.26(c)(2)(ii) would
require a debt collector who neither
114 The requirements of proposed § 1006.26(c)(2)
therefore would apply to FDCPA-covered debt
collectors collecting debt, as that term is defined in
FDCPA section 803(5), regardless of whether the
debt is a consumer financial product or service
debt, as that term is defined in the May 2019
Proposed Rule. See 84 FR 23274, 23399 (May 21,
2019). Consumer financial product or service debts
would include, for example, debts related to
consumer mortgage loans or credit cards. Id. at
23286.

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knows nor should know that a timebarred debt is time barred when the debt
collector makes the initial
communication as defined in
§ 1006.34(b)(2), but who knows or
should know that the debt is time barred
before the debt collector has sent any
validation notice required by
§ 1006.34(a)(1)(i)(B), to provide the
disclosures required by § 1006.26(c)(1)
in the debt collector’s first
communication, if any, with the
consumer on or after the date on which
the debt collector knows or should
know that the debt is time barred, and
on any validation notice required by
§ 1006.34(a)(1)(i)(B). In addition,
proposed § 1006.26(c)(2)(ii) would
require a debt collector who neither
knows nor should know that a timebarred debt is time barred when the debt
collector makes the initial
communication as defined in
§ 1006.34(b)(2) and sends any validation
notice required by § 1006.34(a)(1)(i)(B),
but who later knows or should know
that the debt is time barred, to provide
the disclosures required by
§ 1006.26(c)(1) in the debt collector’s
first communication, if any, with the
consumer on or after the date on which
the debt collector knows or should
know that the debt was time barred.
Proposed comments 26(c)(2)(ii)–1 and
–2 provide examples illustrating the
rule.
The Bureau requests comment on
proposed § 1006.26(c)(2). In particular,
the Bureau requests comment on the
knowledge standard that should apply
for determining when disclosures would
be required under proposed
1006.26(c)(2).115 In addition, the Bureau
requests comment on whether, if the
first communication after a debt
becomes time barred (or after the debt
collector knows or should know that the
debt is time barred) is oral, the debt
collector should also be required to
provide the disclosures in the first
subsequent written communication.
26(c)(3) Form and Delivery of
Disclosures
26(c)(3)(i) In General
The Bureau has developed a series of
model forms featuring the disclosures
that would be required by proposed
§ 1006.26(c)(1). Under proposed
§ 1006.26(c)(3)(i), the required
disclosures would need to be
substantially similar to those shown on
the model forms, and under proposed
§ 1006.26(c)(3)(ii), debt collectors would
receive a safe harbor for using the model
115 See the request for comment regarding the
knowledge standard in the section-by-section
analysis of proposed 1006.26(c)(1).

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forms (or, when applicable, for
providing the disclosures shown on the
model forms).
Proposed Model Form B–4 is a
validation notice that includes a timebarred debt disclosure, for use by debt
collectors providing only the disclosure
required under § 1006.26(c)(1)(i) (i.e., if
the right to bring a legal action against
the consumer on a time-barred debt
cannot be revived under applicable
law). The disclosure on proposed Model
Form B–4 reads as follows: ‘‘The law
limits how long you can be sued for a
debt. Because of the age of this debt, we
will not sue you for it.’’
Proposed Model Forms B–5 through
B–7 are validation notices that include
time-barred debt and revival
disclosures, for use by debt collectors
providing the disclosures required
under § 1006.26(c)(1)(i) and (ii). The
proposed model forms contain revival
disclosures tailored to the different
circumstances in which time-barred
debts could be revived under applicable
law. Specifically:
• The disclosure on proposed Model
Form B–5 provides: ‘‘The law limits
how long you can be sued for a debt. If
you do nothing or speak to us about this
debt, we will not sue you to collect it.
This is because the debt is too old. BUT
if you make a payment or acknowledge
in writing that you owe this debt, then
we can sue you to collect it.’’ Proposed
Model Form B–5 would be for use by
debt collectors collecting time-barred
debts if applicable law permits revival
when a consumer makes a payment or
acknowledges the debt in writing.116
• The disclosure on proposed Model
Form B–6 provides: ‘‘The law limits
how long you can be sued for a debt. If
you do nothing or speak to us about this
debt, we will not sue you to collect it.
This is because the debt is too old. BUT
if you make a payment, then we can sue
you to collect it.’’ Proposed Model Form
B–6 would be for use by debt collectors
collecting time-barred debts if
applicable law permits revival only
when a consumer makes a payment.
• The disclosure on proposed Model
Form B–7 provides: ‘‘The law limits
how long you can be sued for a debt. If
you do nothing or speak to us about this
debt, we will not sue you to collect it.
This is because the debt is too old. BUT
if you acknowledge in writing that you
owe this debt, then we can sue you to
collect it.’’ Proposed Model Form B–7
116 Although what constitutes a written
acknowledgement sufficient to trigger revival may
differ by State, proposed Model Form B–5 is drafted
at a level of generality meant to accommodate debt
collectors in all jurisdictions where written
acknowledgement revives the debt collector’s right
to sue.

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would be for use by debt collectors if
applicable law permits revival only
when a consumer acknowledges the
debt in writing.117
As described in part III.B, the Bureau
tested multiple written time-barred debt
and revival disclosures. In proposing
Model Forms B–4 through B–7, the
Bureau generally has selected the
disclosures that, based on testing
results, consumers would be most likely
to understand.118 Regarding revival, the
Bureau selected the disclosure that
respondents most understood when
asked whether the debt collector would
legally be allowed to sue to collect the
debt if the debtor did nothing, made a
payment, or wrote to the debt collector
to acknowledge the debt. However, the
Bureau notes that this disclosure
underperformed other tested revival
disclosures when respondents were
asked whether the debt collector would
legally be allowed to sue if the debtor
called the debt collector to acknowledge
the debt.119 As tested, the first sentence
of the selected revival disclosure read,
‘‘If you do nothing in response to this
notice, we will not sue you to collect
this debt.’’ Based on the testing results,
the Bureau believes that this phrasing
could lead consumers who receive such
a revival disclosure to have the false
impression that communicating with a
debt collector by telephone would
revive the debt collector’s right to sue
and thus make the consumer reluctant
to communicate. To clarify that
communicating with a debt collector by
telephone would not revive the debt
collector’s right to sue, the first sentence
of the revival disclosures on proposed
Model Forms B–5 through B–7 also
includes the phrase ‘‘or speak to us.’’
As noted, the Bureau’s quantitative
testing tested respondents’
understanding of written disclosures
included on validation notices. For this
reason, the time-barred debt and revival
disclosures described what would or
would not happen if the consumer took
various actions in response ‘‘to this
notice.’’ However, proposed
§ 1006.26(c)(1) and (2) would require
time-barred debt and revival disclosures
in certain oral communications. To
ensure that the disclosure on the
proposed model forms will be
appropriate whether provided in writing
or orally (and whether on a validation
notice or not), the Bureau also proposes
117 Proposed Model Form B–7, like proposed
Model Form B–5, is drafted at a level of generality
meant to accommodate debt collectors in all
written-acknowledgement jurisdictions.
118 CFPB Quantitative Testing Report, supra note
64, at 22–25.
119 CFPB Quantitative Testing Report, supra note
64, at 24–25.

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to include the phrase ‘‘about this debt’’
instead of the tested language ‘‘in
response to this notice.’’ Based on the
Bureau’s quantitative testing, and with
these slight adjustments, the Bureau
believes that the model forms effectively
disclose the information described in
proposed § 1006.26(c)(1) and (2).
For these reasons, and pursuant to its
authority under FDCPA sections 814(d)
and 807 and Dodd-Frank Act section
1032, the Bureau proposes
§ 1006.26(c)(3)(i) to require that, when
debt collectors provide the disclosures
required by § 1006.26(c)(1) on a
validation notice, the content, format,
and placement of the disclosures must
be substantially similar to such
disclosures on Model Forms B–4
through B–7 in appendix B, as
applicable. Proposed § 1006.26(c)(3)(i)
also would require that, when the
disclosures required by § 1006.26(c)(1)
are provided orally or in a written
communication that is not a validation
notice, the content must be substantially
similar to such disclosures on Model
Forms B–4 through B–7 in appendix B,
as applicable.
As already discussed, some
jurisdictions require debt collectors to
make disclosures, including on
validation notices, when collecting
time-barred debt. Proposed comment
26(c)(3)(i)–1 would clarify that, when
providing the disclosures required by
§ 1006.26(c)(1) on a validation notice, a
debt collector who uses a validation
notice that is otherwise substantially
similar to Model Forms B–4 through B–
7, as applicable, may include any
disclosures required by other applicable
law on the reverse of the validation
notice and will continue to be in
compliance with the requirements of
proposed § 1006.26(c)(1) and (3)(i). The
proposed comment also provides an
example of a disclosure required by
other applicable law.
The Bureau requests comment on
proposed § 1006.26(c)(3)(i) and on
comment 26(c)(3)(i)–1, including on
conflicts that might arise between the
Bureau’s proposed model forms and
other disclosures required by applicable
law. In particular, the Bureau requests
comment on whether proposed
§ 1006.26(c)(3)(i)—and proposed Model
Forms B–4 through B–7—would allow
debt collectors to comply with other
applicable law, including on whether
any jurisdictions require time-barred
debt or revival disclosures to be
included on the front of the validation
notice and whether, if so, it is possible
for a debt collector to comply with both
the Bureau’s proposal and any such
State laws. The Bureau also requests
comment and any supporting data on

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whether consumers who receive both
Federal and State time-barred debt (and,
if applicable, revival) disclosures on a
validation notice may be confused by
the dual disclosures.
26(c)(3)(ii) Safe Harbor
Model forms that provide a safe
harbor may benefit both consumers and
debt collectors. A model form that has
been tested with consumers may
effectively disclose the information
required by proposed § 1006.26(c)(1) in
a manner that prevents deception and
permits consumers to understand the
costs, benefits, and risks associated with
the collection of time-barred debts. A
model form may also provide debt
collectors with protection from liability
that could arise if they developed and
used their own forms. During the
SBREFA process, small entity
representatives encouraged the Bureau
to develop model forms and safe
harbors, emphasizing that model forms
can promote efficiency and
predictability by reducing legal risk.120
Because of the potential benefits to
consumers and debt collectors, the
Bureau has developed proposed Model
Forms B–4 through B–7 in appendix B.
As described above, proposed Model
Forms B–4 through B–7 were developed
over multiple rounds of consumer
testing, and, based on this testing, the
Bureau believes that they effectively
disclose the information described in
proposed § 1006.26(c)(1). For these
reasons, under proposed
§ 1006.26(c)(3)(ii) a debt collector who
uses Model Forms B–4 through B–7 in
appendix B, as applicable, to provide
the disclosures required by
§ 1006.26(c)(1) in a validation notice
would receive a safe harbor for
compliance with the requirements of
§ 1006.26(c)(1) and (3)(i). In addition,
under proposed § 1006.26(c)(3)(ii) a debt
collector who uses the relevant content
of Model Forms B–4 through B–7, as
applicable, to provide the disclosures
required by § 1006.26(c)(1) orally or in
a written communication that is not a
validation notice would receive a safe
harbor for compliance with the
requirements of § 1006.26(c)(1) and
(3)(i).
Proposed comment 26(c)(3)(ii)–1
explains that, although the use of Model
Forms B–4 through B–7 is not required,
a debt collector who uses the applicable
model form complies with the
requirements of § 1006.26(c)(1) and
(3)(i). The comment also would clarify
what it means for a debt collector to use
the ‘‘applicable’’ model form. For
120 See, e.g., Small Business Review Panel Report,
supra note 51, at 22.

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example, if under applicable law only a
payment on a time-barred debt revives
a debt collector’s right to bring a legal
action against the consumer to collect
the debt, a debt collector who uses
Model Form B–6, which refers to
payment but not written
acknowledgement, to provide the
disclosure on the validation notice
would comply with the requirements of
§ 1006.26(c)(1) and (3)(i). Proposed
comment 26(c)(3)(ii)–2 would clarify
that a debt collector who uses Model
Forms B–4 through B–7, as applicable,
may include any disclosures required by
other applicable law on the reverse of
the validation notice and will continue
to be in compliance with the
requirements of proposed
§ 1006.26(c)(1) and (3)(i).
The Bureau proposes Model Forms B–
4 through B–7 pursuant to its authority
under section 1032(b) of the Dodd-Frank
Act. As discussed in part IV, section
1032(b)(1) of the Dodd-Frank Act
provides that ‘‘any final rule prescribed
by the Bureau under [section 1032]
requiring disclosures may include a
model form that may be used at the
option of the covered person for
provision of the required disclosures.’’
Section 1032(b)(2) of the Dodd-Frank
Act provides certain minimum criteria
that any such model form must meet,
and section 1032(b)(3) of the DoddFrank Act requires the Bureau to
validate any such model form through
consumer testing.
Consistent with the Bureau’s
authority under Dodd-Frank Act section
1032(b)(1), the Bureau believes that
proposed Model Forms B–4 through B–
7 use plain language comprehensible to
consumers, contain a clear format and
design, such as easily readable type
font, and succinctly explain the
information that must be communicated
to consumers. As discussed above, the
Bureau has developed these model
forms after consumer testing and
believes that making them available
would help ensure that the disclosures
required by proposed § 1006.26(c)(1) are
provided to consumers effectively,
while also minimizing the burden on
debt collectors who would otherwise
need to develop their own disclosures.
The Bureau requests comment on
proposed § 1006.26(c)(3)(ii) and on
proposed comments 26(c)(3)(ii)–1 and
–2. In particular, the Bureau requests
comment on the content, format, and
design of proposed Model Forms B–4
through B–7. The Bureau also requests
comment on whether the two conditions
described on the model forms—payment
and written acknowledgement—capture
all circumstances in which State law
permits revival.

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26(c)(3)(iii) Delivery
Proposed § 1006.26(c)(3)(iii) would
state that, when providing the
disclosures required by proposed
§ 1006.26(c)(1) on a validation notice or
a written communication that is not a
validation notice, a debt collector must
do so in a manner permitted by
proposed § 1006.42. As discussed in the
May 2019 Proposed Rule, proposed
§ 1006.42(a)(1) generally would require
a debt collector who provides
disclosures required by Regulation F in
writing or electronically to do so in a
manner that is reasonably expected to
provide actual notice and in a form that
the consumer may keep and access
later.121 Proposed § 1006.42(b) through
(e) in the May 2019 Proposed Rule
explain how debt collectors may
provide required notices to consumers
by email or text message.122
The Bureau proposes
§ 1006.26(c)(3)(iii) as an interpretation
of FDCPA section 808’s prohibition on
using unfair or unconscionable means to
collect a debt. It may be unfair or
unconscionable under FDCPA section
808 for a debt collector to deliver a
disclosure using a method that is not
reasonably expected to provide actual
notice to the consumer or that does not
allow the consumer to retain the
disclosure and access it later. If debt
collectors deliver disclosures in a
manner that does not meet these
standards, consumers may not receive
required information or have it available
for future reference, potentially leading
them to take different actions with
respect to debts than they otherwise
would have. A debt collector’s decision
to provide a required disclosure in a
manner not reasonably expected to
provide actual notice or in a form that
the consumer cannot keep and access
later is outside of a consumer’s control;
therefore, a consumer cannot reasonably
avoid the injury caused by a debt
collector who provides a required
disclosure in such a manner or form.
121 See 84 FR 23274, 23355–57 (May 21, 2019).
The May 2019 Proposed Rule would except from
this requirement two disclosures that would be
required to accompany all written debt collection
communications (even relatively routine ones), on
the theory that subjecting them to proposed
§ 1006.42(a)(1) likely would impose an unnecessary
burden on debt collectors with little corresponding
benefit to consumers. Id. The disclosures that
proposed § 1006.26(c) would require would
accompany at most two of the debt collector’s
communications, so there is no similar basis to
except them from proposed § 1006.42(a)(1).
122 See id. at 23357–67. As discussed in the May
2019 Proposed Rule, the Bureau proposed
§ 1006.42(b) through (d) based, in part, on its
authority under the Electronic Communications in
Global and National Commerce Act (E–SIGN Act).
Id.; see also id. at 23285 (describing Bureau’s E–
SIGN Act authority).

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Providing required disclosures in a
manner not reasonably expected to
provide actual notice or in a form that
the consumer cannot keep and access
later could effectively thwart the rule’s
disclosure provisions. Thus, whatever
benefits debt collectors may receive
from such conduct do not appear to be
outweighed by the costs to consumers.
In addition, to the extent proposed
§ 1006.26(c)(3)(iii) applies to the
provision of disclosures on a validation
notice, the Bureau proposes
§ 1006.26(c)(3)(iii) to implement and
interpret FDCPA section 809(a) and (b)
and pursuant to its authority under
FDCPA section 814(d) to prescribe rules
with respect to the collection of debts by
debt collectors.123 The Bureau requests
comment on proposed
§ 1006.26(c)(3)(iii).
26(c)(3)(iv) Translated Disclosures
As discussed, the disclosures that
proposed § 1006.26(c)(1) would require
may help resolve consumer uncertainty
related to the collection of time-barred
debts and enable consumers to make
more informed choices about whether to
pay or prioritize such debts. Because
some consumers do not speak or
understand English, some debt
collectors communicate with consumers
in languages other than English.
Consumers who are unable to
communicate in English would benefit
from receiving translated versions of the
disclosures. At the same time, requiring
debt collectors to identify such
consumers and provide accurate
translations in the myriad languages
that consumers speak may impose a
significant burden on industry. If a debt
collector chooses to communicate with
a consumer in a non-English language,
however, this burden may be reduced.
Such a debt collector has already
identified the consumer’s language
preference and exhibited a willingness
to communicate in that language.
Although preparing accurate
translations of the disclosures described
in proposed § 1006.26(c)(1) may be
challenging in some circumstances,
requiring a debt collector who
communicates in a non-English
language to provide the disclosures in
that language may prevent deception
and help ensure that the disclosures are
effective for more consumers.124
123 Id.

at 23356.
§ 1006.34(e) in the May 2019
Proposed Rule also would require the translation of
any such disclosures provided on a validation
notice that is translated into a language other than
English. See id. at 23405 (permitting a debt collector
who also sends an English-language validation
notice in the same communication, or who has
already provided an English-language validation
124 Proposed

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For these reasons, and pursuant to the
Bureau’s authority under FDCPA
section 814(d) and Dodd-Frank Act
section 1032(a), proposed
§ 1006.26(c)(3)(iv) would require a debt
collector to make the disclosures that
would be required by proposed
§ 1006.26(c)(1) in the same language or
languages used for the rest of the
communication in which the
disclosures are conveyed. Proposed
§ 1006.26(c)(3)(iv) also would require
that any translation of the disclosures
that would be required by
§ 1006.26(c)(1) be complete and
accurate. Proposed comment
26(c)(3)(iv)–1 provides illustrative
examples, the second of which
illustrates the application of proposed
§ 1006.26(c)(3)(iv) to communications
that take place in multiple languages.
Proposed comment 26(c)(3)(iv)–2 would
clarify that the language of a disclosure
obtained from the Bureau’s website is
considered a complete and accurate
translation, although debt collectors are
permitted to use other translations so
long as those translations are complete
and accurate. The Bureau requests
comment on proposed
§ 1006.26(c)(3)(iv).
Section 1006.34 Notice for Validation of
Debts
34(c) Validation Information

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34(c)(2) Information About the Debt
34(c)(2)(xi)
In the May 2019 Proposed Rule, the
Bureau proposed § 1006.34(a) to require
debt collectors to provide consumers
with specified validation information,
either by sending the consumer a
validation notice in the initial
communication, as defined in proposed
§ 1006.34(b)(2), or within five days of
that initial communication, or by
providing the information orally in the
initial communication.125 Proposed
§ 1006.34(c) in the May 2019 Proposed
Rule set forth the required validation
information, with proposed
§ 1006.34(c)(2) specifying the
information that debt collectors would
be required to provide about the debt
being collected.126 Because the timebarred debt and revival disclosures
described in § 1006.26(c)(1) and (2)
represent information about the debt
that debt collectors would be required to
include, as applicable, on validation
notices, the Bureau proposes to include
the disclosures in the list of validation
notice, to ‘‘send the consumer a validation notice
completely and accurately translated into any
language’’).
125 Id. at 23404.
126 Id.

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information in § 1006.34(c)(2).
Specifically, the Bureau proposes
§ 1006.34(c)(2)(xi) to provide that
validation information includes a timebarred debt disclosure, or a time-barred
debt and a revival disclosure, if the debt
collector determines after a reasonable
investigation that such disclosures are
required by § 1006.26(c). Thus, a debt
collector who provides the proposed
§ 1006.26(c) disclosures after
undertaking a reasonable inquiry and
concluding that the disclosures are
required would not violate proposed
§ 1006.34 for having made the
disclosures even if it is determined later
that such disclosures were not required.
For the reasons discussed in the sectionby-section analysis of proposed
§ 1006.26(c)(1), the Bureau proposes
§ 1006.34(c)(2)(xi) pursuant to its
authority under FDCPA sections 814(d)
and 807 and Dodd-Frank Act section
1032(a). The Bureau requests comment
on proposed § 1006.34(c)(2)(xi).
VI. Dodd-Frank Act Section 1022(b)
Analysis
A. Overview
In developing the supplemental
proposed rule, the Bureau has
considered its potential benefits, costs,
and impacts.127 The Bureau requests
comment on the preliminary analysis
presented below as well as submissions
of additional data that could inform the
Bureau’s analysis of the benefits, costs,
and impacts.
Debt collectors play a critical role in
markets for consumer financial products
and services. Credit markets function
because lenders expect that borrowers
will pay them back. In consumer credit
markets, if borrowers fail to repay what
they owe per the terms of their loan
agreement, creditors often engage debt
collectors to attempt to recover amounts
owed, whether through the court system
or through less formal requests for
repayment.
The supplemental proposal would
require debt collectors to make certain
disclosures when attempting to collect
time-barred debt. The new requirements
would provide benefits to consumers by
helping to correct the misimpression
that consumers might have that debt
collectors can legally sue to collect time127 Specifically, section 1022(b)(2)(A) of the
Dodd-Frank Act requires the Bureau to consider the
potential benefits and costs of the regulation to
consumers and covered persons, including the
potential reduction of access by consumers to
consumer financial products and services; the
impact of proposed rule on insured depository
institutions and insured credit unions with less
than $10 billion in total assets as described in
section 1026 of the Dodd-Frank Act; and the impact
on consumers in rural areas.

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barred debts. Correcting this
misimpression can help consumers
because a better understanding of
whether they can be sued could be
important in deciding how to prioritize
time-barred debts relative to other debts
or expenses such as household
necessities. The requirements would
also impose costs on debt collectors
who would need to determine for each
debt whether the disclosures are
required and to provide the disclosures
when appropriate. The disclosures
could also reduce debt collector revenue
because consumers who receive such
disclosures might be less willing to
repay time-barred debts. In addition to
these effects, there could be indirect
impacts on credit markets. This is
because, if the proposal were to increase
costs for debt collectors or reduce
repayment of time-barred debt, it would
reduce the expected return to lending.
This could lead lenders to increase
interest rates and other costs to
borrowers and to restrict availability of
credit, particularly to higher-risk
borrowers.128
In developing the supplemental
proposed rule, the Bureau has
consulted, or offered to consult with,
the appropriate prudential regulators
and other Federal agencies, including
regarding consistency with any
prudential, market, or systemic
objectives administered by such
agencies.
B. Provisions To Be Analyzed
The analysis below considers the
potential benefits, costs, and impacts to
consumers and covered persons of the
supplemental proposal, which would
require debt collectors who are
collecting debts that they know or
should know are time barred to provide
time-barred debt disclosures and, if
applicable, revival disclosures to
consumers.
C. Data Limitations and Quantification
of Benefits, Costs, and Impacts
The discussion in this part VI relies
on publicly available information as
well as information the Bureau has
obtained. The Bureau engaged a
contractor to conduct qualitative and
quantitative testing to evaluate
consumers’ understanding of timebarred debt and revival and of
disclosures about time-barred debt and
revival. Specifically, the Bureau
conducted 54 qualitative one-on-one
interviews with consumers between
April 2017 and April 2019, in order to
refine the disclosures. The Bureau then
128 See 84 FR 23274, 23371–72, 23389–91 (May
21, 2019).

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conducted an online survey designed to
assess the effectiveness of time-barred
debt and revival disclosures. The online
survey, completed in September of
2019, surveyed 8,011 consumers—66
percent of whom had debt collection
experience—and used random
assignment to study the effect of
receiving a time-barred debt disclosure
alone, or time-barred debt and revival
disclosures together, on consumer
comprehension of time-barred debt and
revival.129
The Bureau also relies on the results
of its 2015 Survey of Consumer Views
on Debt, which provided the first
comprehensive and nationally
representative data on consumers’
experiences and preferences related to
debt collection.130 In addition, the
Bureau relies on its Consumer Credit
Panel (CCP) to understand potential
benefits and costs to consumers of the
proposed rule.131 To better understand
potential effects on industry of potential
requirements, such as those in the
proposed rule, the Bureau has engaged
in significant outreach, including the
CFPB Debt Collections Operations
Study.132 In July 2016, the Bureau
consulted with small entities as part of
the SBREFA process and obtained
important information on the potential
impacts of proposals that the Bureau
was considering at the time, including
disclosures regarding a debt’s timebarred status.133
The sources described above, together
with other sources of information and
the Bureau’s market knowledge, form
the basis for the Bureau’s consideration
of the likely impacts of the
supplemental proposed rule. The
Bureau provides the best estimates
possible of the potential benefits and
129 See CFPB Quantitative Testing Report, supra
note 64. The survey results provide important
information on consumer comprehension of
disclosures about time-barred debt; however, as
further discussed in the Testing Results Report,
effects observed in a controlled setting such as the
survey may differ from those observed in practice.
130 Bureau of Consumer Fin. Prot., Consumer
Experiences with Debt Collection: Findings from the
CFPB’s Survey of Consumer Views on Debt (Jan.
2017), https://www.consumerfinance.gov/dataresearch/research-reports/consumer-experiencesdebt-collection-findings-cfpbs-survey-consumerviews-debt/.
131 For more information about Bureau data
sources, see Sources and Uses of Data at the Bureau
of Consumer Financial Protection (Sept. 2018),
https://www.consumerfinance.gov/data-research/
research-reports/sources-and-uses-data-bureauconsumer-financial-protection/.
132 See Bureau of Consumer Fin. Prot., Study of
Third-Party Debt Collection Operations (July 2016),
https://www.consumerfinance.gov/documents/755/
20160727_cfpb_Third_Party_Debt_Collection_
Operations_Study.pdf (hereinafter CFPB Debt
Collection Operations Study).
133 See Small Business Review Panel Report,
supra note 51.

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costs to consumers and covered persons
of this proposal given available data.
However, available data sources
generally do not permit the Bureau to
quantify, in dollar terms, how particular
proposed provisions will affect
consumers. With respect to industry
impacts, much of the Bureau’s existing
data come from qualitative input from
debt collectors and other entities that
operate in the debt collection market
rather than from representative
sampling that would allow the Bureau
to estimate total benefits and costs.
The Bureau’s discussion in this part
generally considers the benefits, costs,
and impacts of the supplemental
proposal through the first 10 years after
the potential effective date. The Bureau
generally anticipates that any one-time
costs to covered persons of coming into
compliance with the supplemental
proposal would be borne before or
during the first year after the effective
date. Ongoing benefits and costs would
likely vary from year to year in
accordance with the amount of timebarred debt collected in any year. The
Bureau does not have any basis at this
time to predict how that amount will
vary during future years.
General economic principles and the
Bureau’s expertise in consumer
financial markets, together with the data
and findings that are available, provide
insight into the potential benefits, costs,
and impacts of the supplemental
proposed rule. Where possible, the
Bureau has made quantitative estimates
based on these principles and the data
available. Some benefits and costs,
however, are not amenable to
quantification, or are not quantifiable
given the data available to the Bureau.
The Bureau provides a qualitative
discussion of those benefits, costs, and
impacts. The Bureau requests additional
data or studies that could help quantify
the benefits and costs to consumers and
covered persons of the supplemental
proposed rule.
D. Baseline for Analysis
In evaluating the potential benefits,
costs, and impacts of the supplemental
proposal, the Bureau takes as a baseline
the current legal framework governing
debt collection. This includes debt
collector practices as they currently
exist, responding to the requirements of
the FDCPA as currently interpreted by
courts and law enforcement agencies,
other Federal laws, and the rules and
statutory requirements promulgated by
the States.134 In the consideration of
134 These

requirements, and the specificity of the
requirements, may vary depending upon the
jurisdiction in which the collection occurs. For

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potential benefits, costs, and impacts
below, the Bureau discusses its
understanding of practices in the debt
collection market under this baseline
and how those practices would change
under the proposal.
E. Coverage of Proposal
The proposed rule would apply to
debt collectors as defined in the FDCPA,
as further discussed in the May 2019
Proposed Rule.135 Creditors that collect
on debts they own generally would not
be affected directly by the proposal
because they typically are not debt
collectors for purposes of the FDCPA.
Creditors, however, may experience
indirect effects if debt collectors’ costs
increase and if those costs are passed on
to creditors.
F. Potential Benefits and Costs to
Consumers and Covered Persons
Proposed § 1006.26(c) would require
debt collectors who are collecting debts
that they know or should know are time
barred to provide time-barred debt
disclosures and, if applicable, revival
disclosures to consumers. Proposed
model forms B–4 through B–7 include
the disclosures that debt collectors
could use to comply with the disclosure
requirements of proposed § 1006.26(c).
Potential benefits and costs to
consumers. The proposed time-barred
debt and revival disclosures would
benefit consumers by providing them
with information that may be important
when deciding how to respond to a
request for payment. A debt collector’s
attempt to collect a time-barred debt
may give a consumer the impression
that the debt is legally enforceable—an
impression that is false for time-barred
debts. A consumer who takes away from
the collection attempt that he or she
will, or could, be sued for a time-barred
debt may place greater priority on
paying that debt than if he or she knew
that the debt collector could not sue.
Furthermore, a consumer who is
unaware of the actions that would
trigger revival may revive the debt
collector’s right to sue, for example by
making a partial payment.
The consumer benefits of the
proposed time-barred debt and revival
disclosures depend on a number of
factors, including: (i) How frequently
debt collectors attempt to collect debt
that is time barred; (ii) what consumers
already understand about debts’ timebarred status and how much the
proposed disclosures would improve
example, as discussed in part II.C, certain States
require specific disclosure language be provided
when collecting time-barred debt.
135 See 84 FR 23274, 23372 (May 21, 2019).

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their understanding about time-barred
debt and revival; and (iii) the value to
consumers of gaining a better
understanding of time-barred debt and
revival and making better-informed
decisions as a result. The Bureau cannot
fully quantify each of these factors,
although the Bureau has research and
other data that are relevant to the
potential extent of these benefits.
First, regarding the frequency with
which debt collectors attempt to collect
time-barred debt, the Bureau is not
aware of representative data showing
how much debt collection activity
involves time-barred debt. There is
evidence that some debt collectors
contact a substantial share of consumers
to attempt to collect time-barred debt.
For example, a 2013 FTC report notes
that most statutes of limitations are
between three and six years and
estimates that, for certain large debt
buyers, about a third of debt purchased
was at least three years old, and 12
percent of debt purchased was at least
six years old.136 On the other hand,
some contingency collection agencies
have told the Bureau that they do not
collect any debt that is time barred.
Variation in State statutes of limitations
makes quantification of the number of
debts that are time barred difficult; some
States consider debts time barred if they
are three years from charge off, while
others use longer periods, such as seven
or 15 years, to demarcate time-barred
debt. The Bureau has estimated that at
least 49 million consumers are
contacted by a third-party debt collector
each year about a debt in collection.137
Even if only a relatively small fraction
of those consumers’ debts were time
barred, it could still mean that debt
collectors contact millions of consumers
each year about time-barred debts.
Second, the Bureau has some
evidence that consumers do not have a
clear understanding of what constitutes
time-barred debt and the implications of
having a debt that is time barred. In
focus groups the Bureau observed in
developing the proposed disclosures, for
example, consumers expressed
erroneous beliefs about if debts are time
barred, if they can be sued for timebarred debt, and if time-barred debt can
appear on their credit report.138 As an
example, one consumer said ‘‘I think
you’re forgiven after twenty years.’’
Additionally, as discussed in the
136 FTC

Debt Buying Report, supra note 8, at 43.
The same study estimates that, even for debts that
are at least 15 years old, these debt buyers
attempted to collect the debt at least 29 percent of
the time. Id. at B–12.
137 See 84 FR 23274, 23384 (May 21, 2019).
138 FMG Focus Group Report, supra note 40, at 9–
10.

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Quantitative Testing Report, without a
disclosure, most consumers believe they
can be sued for a debt even if it is old
enough to be time barred in most
jurisdictions. When asked if a debt
collector could sue to collect a debt if
the debtor did nothing in response to
the collection notice for a ten-year-old
debt, about 65 percent of respondents
who read a notice about a debt that did
not include a time-barred debt
disclosure incorrectly reported that the
debt collector was legally allowed to sue
to collect the debt.139 Being presented
with a disclosure explaining that a debt
is time barred largely corrected this
misunderstanding: Approximately 65
percent of respondents who were
randomly assigned a notice containing a
time-barred debt disclosure (with or
without a revival disclosure) correctly
stated that they could not be sued on the
debt.140
Similarly, the Bureau has evidence to
suggest that consumers do not
understand the actions that trigger
revival of a debt collector’s right to sue
on a time-barred debt. In focus groups,
participants in general were confused
about actions that would trigger revival,
in particular finding it surprising that
making a payment made them
susceptible to being sued. One
participant said, ‘‘Why would they
punish me for trying to make a
payment?’’ 141 The Bureau’s quantitative
research findings are consistent with
this. Of the respondents who did not
receive a disclosure informing them of
the actions that trigger revival, fewer
than 20 percent correctly reported that
the debt collector is legally allowed to
sue the debtor if the debtor makes a
partial payment, and fewer than 20
percent correctly reported that a debt
collector is legally allowed to sue if the
debtor sends a letter acknowledging the
debt as theirs.142 In contrast, once a
revival disclosure was provided, about
70 percent of respondents reported
correctly that the debtor can be sued
after making a partial payment, and
about 58 percent reported correctly that
the debtor can be sued after writing to
139 CFPB Quantitative Testing Report, supra note
64, at appendix table 8. The length of the
limitations period generally varies by State and debt
type. Most statutes of limitations applicable to debt
collection claims are between three and six years,
and therefore a ten-year-old debt is likely to be
time-barred in most states.
140 Id.
141 FMG Cognitive Report, supra note 40, at 35–
36.
142 CFPB Quantitative Testing Report, supra note
64, at appendix tables 9–10. These results compare
respondents who received a time-barred debt with
revival disclosure to respondents who received
either a time-barred debt disclosure that did not
mention revival or no time-barred debt disclosure
at all.

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the debt collector to acknowledge the
debt as theirs.143 This research suggests
that consumers generally do not
understand that making a partial
payment or writing a debt collector to
acknowledge a time-barred debt can
trigger revival of a debt collector’s right
to sue to collect the debt, but that a
revival disclosure can substantially
improve understanding of the
implications of these actions.
Finally, the Bureau has evidence that,
if consumers know that debts are time
barred, that knowledge is likely to affect
their conduct relating to the debts.
Consumers in focus groups expressed
that it was important to know that a
debt was time barred. The Bureau’s
Quantitative Testing Report indicates
that, for many respondents,
understanding a debt’s time-barred
status and revival could affect their
choice of what to do about a debt under
some circumstances. Respondents who
were shown a time-barred debt and
revival disclosure were more likely to
say that they would ignore the debt, and
less likely to say that they would make
a payment on the debt, than
respondents who did not see a
disclosure or who saw a time-barred
debt disclosure without a revival
disclosure.144 These differences were
statistically significant and relatively
large in magnitude. For example, of
respondents who saw either a timebarred debt disclosure without revival
or no time-barred debt disclosure, about
31 to 38 percent said they would be
‘‘very likely’’ to make a full or partial
payment on a hypothetical debt,
whereas about 23 percent of
respondents who saw the a time-barred
debt with revival disclosure said they
would be ‘‘very likely’’ to pay.145 The
fact that many respondents who saw a
time-barred debt with revival disclosure
said they would make different choices
suggests that, for consumers such as
these respondents, the information in
the proposed disclosure is valuable in
making choices.
The Bureau is unaware of data that
could be used to estimate the frequency
with which debt collectors in fact sue or
threaten to sue on revived debt. Industry
representatives state that many debt
collectors choose not to sue or threaten
to sue on time-barred debt even if the
consumer takes action to revive the right
143 Id.
144 Id. at 28–30. Respondents were asked about a
hypothetical debt and told that ‘‘while it would not
be easy, [the respondent] probably could find a way
to come up with money to pay the debt.’’ The
survey results thus more closely reflect consumer
choices in that situation than situations in which
consumers are either more or less able to repay.
145 Id. at appendix table 23.

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to sue, and one major trade association
composed largely of debt buyers has
established standards that prohibit its
members from suing or threatening to
sue on time-barred debt even if the right
to sue has been revived.146 However, the
Bureau does not know what share of
time-barred debts are collected by debt
collectors following such a policy. The
benefits of the revival disclosures in the
supplemental proposal may be limited if
few debt collectors in fact sue or
threaten to sue after the right to do so
has been revived.
The estimates above suggest that the
proposed time-barred debt and revival
disclosures could benefit some
consumers, but the Bureau expects this
benefit could vary based on current
State law and the practices of particular
debt collectors. The Bureau
understands, for example, that some
debt collectors, when attempting to
collect time-barred debt, currently
disclose to consumers that they cannot
sue to collect the debt.147 Moreover,
certain jurisdictions, including
California and New York, require debt
collectors to make time-barred debt
disclosures, and in some cases revival
disclosures, in at least some
circumstances. The benefits of the
proposed disclosures may be limited
where similar disclosures are already
being provided.
The proposed disclosures could have
costs to consumers if they lead to
mistaken beliefs about the consequences
of consumers’ actions. Some results of
the Bureau’s quantitative testing suggest
that a revival disclosure could lead
some consumers to overgeneralize the
actions that can make them susceptible
to lawsuit. In the Bureau’s quantitative
testing, about 45 percent of respondents
who saw the revival disclosure
incorrectly reported that the debt
collector is legally allowed to sue the
debtor to collect time-barred debt if the
debtor calls to acknowledge the debt as
theirs, relative to about 17 percent of
respondents who saw no disclosure
about time-barred debt or revival and
about 9 percent of respondents who saw
a time-barred debt disclosure without
146 Receivables Mgmt. Ass’n Int’l, Receivables
Management Certification Program, at 32 (Jan.
2018), https://rmassociation.org/wp-content/
uploads/2018/02/Certification-Policy-version-6.0FINAL-20180119.pdf (‘‘A Certified Company shall
not knowingly bring or imply that it has the ability
to bring a lawsuit on a debt that is beyond the
applicable statute of limitations, even if state law
revives the limitations period when a payment is
received after the expiration of the statute.’’)
147 Some debt collectors also must provide such
disclosures as a result of consent agreements with
law enforcement agencies, including the Bureau
and the FTC. See supra note 96.

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revival.148 As discussed in the sectionby-section analysis of proposed
§ 1006.26(c)(3)(i), the Bureau has made
a small change to the content of the
disclosures on proposed Model Forms
B–5 through B–7 (i.e., the proposed
model forms containing revival
language), specifically mentioning that
the debt collector will not sue if the
consumer does nothing or speaks to the
debt collector about the debt, to attempt
to reduce the risk of this type of
overgeneralization.
Another potential cost to consumers
could arise if the proposed disclosures
make debt collectors more likely to sue
consumers before a debt becomes timebarred. The Bureau’s research provides
some evidence that consumers may be
less likely to pay debts that they know
are time barred, as discussed below in
the Bureau’s consideration of costs to
covered persons. Requiring debt
collectors to disclose that a debt is time
barred may therefore reduce the number
of time-barred debts that are paid.
Knowing that a consumer is less likely
to pay a time-barred debt may make
debt collectors more likely to pursue
litigation prior to a debt reaching the
statute of limitations, which could
impose costs on some consumers.
However, as described below, the
available evidence suggests that, in
practice, time-barred debt disclosures in
use today do not lead to a material
reduction in the aggregate rate at which
time-barred debt is repaid, which in
turn suggests that there would not be a
large increase in litigation. The Bureau
requests data and other evidence that
would permit it to better estimate any
such effects.
Potential benefits and costs to covered
persons. The supplemental proposal
would require debt collectors who
attempt to collect time-barred debt to
provide new disclosures in certain
communications with consumers. This
could impose one-time costs for systems
that identify whether a debt is time
barred and whether (and if so, when) it
is subject to revival, and it may impose
ongoing costs both to determine
whether debts are time barred and to
make disclosures when appropriate.
To quantify costs of the proposal to
covered persons, the Bureau would
need to estimate the number of debt
collectors who collect time-barred debt,
the number of time-barred accounts they
collect, the cost to such debt collectors
of determining whether a debt is time
barred and whether and when it can be
revived, and the cost of making the
proposed disclosures when appropriate.
148 CFPB Quantitative Testing Report, supra note
64, at appendix table 11.

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The Bureau does not have
representative data that permit it to
estimate the number of debt collectors
who collect time-barred accounts or the
number of time-barred accounts they
collect. The Bureau understands based
on industry outreach that many debt
collectors do not collect time-barred
accounts. Even debt collectors who do
not regularly collect time-barred debt
might need to review systems to ensure
that they are not communicating about
time-barred debts without providing the
appropriate proposed disclosure in
circumstances when they are required;
however, as discussed below, the
Bureau expects that the burden of the
proposed provision on such debt
collectors would be lower than for debt
collectors who regularly collect timebarred accounts.
Among those debt collectors who do
regularly attempt to collect time-barred
accounts, the Bureau understands that
some currently disclose to consumers
that they cannot sue to collect the debt.
Moreover, debt collectors who are
collecting debt in certain jurisdictions,
such as California and New York,
already must make such disclosures in
at least some circumstances. Also, debt
collectors who litigate accounts must
know whether an account is time barred
to avoid threatening to sue or suing on
time-barred accounts in violation of the
FDCPA as interpreted by existing
FDCPA case law. Thus, some debt
collectors, particularly ones that collect
nationwide or that engage in litigation,
already have a process in place for
identifying time-barred accounts and,
where they do attempt to collect timebarred debt, for providing disclosures to
consumers about the time-barred status
of such accounts.149
The Bureau understands that
determining whether an account is time
barred is not always straightforward,
particularly for debt collectors operating
in a range of jurisdictions. Different
States have different statutes of
limitations for different types of debt.150
Which statute applies depends on
questions such as where the consumer
resides and the nature of the credit
contract, as well as which State’s law a
court applies to a given case. As noted
above, many debt collectors already
must make decisions about a debt’s
time-barred status to determine whether
a lawsuit is permissible or, in certain
149 Consistent with this, the FTC found that debt
buyers commonly consider the prevalence of timebarred debt when bidding on portfolios of debt,
suggesting that debt buyers and sellers of debt
regularly determine whether debts are time barred.
See FTC Debt Buying Report, supra note 8, at 21.
150 Small Business Review Panel Report, supra
note 51, at 25.

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States, whether particular disclosures
are required. Even for these debt
collectors, however, the proposed rule
would increase the importance of
making the correct determination. The
Bureau anticipates that some collection
agencies and debt buyers would incur
legal and programming costs to develop
a system to identify time-barred
accounts and incorporate the
determination into the collection
management system.151 These costs
could be mitigated somewhat by the
proposed rule’s ‘‘know or should know’’
standard for the debt’s time-barred
status, which could reduce the
likelihood that debt collectors would be
held liable for failing to identify timebarred debt. Debt collectors would also
incur costs to train staff to answer
consumer questions about the proposed
disclosures and to incorporate
information about the new disclosures
into their systems for managing
communication with consumers.
Debt collectors could also incur
ongoing costs of determining whether
debts are time barred. Debt collectors
would need to update systems from
time to time to reflect changes in State
laws regarding statutes of limitations
and might need to perform new legal
analyses when facing novel questions of
law or fact, such as when beginning to
collect debt from consumers in a
particular jurisdiction for the first time.
For accounts that are identified as
time barred, debt collectors would need
to make disclosures with certain written
and oral communications. This would
impose direct costs to make the
disclosures and potentially indirect
costs because consumers may be less
likely to pay debts after being informed
that those debts are time barred.
Debt collectors most often initiate
communication with consumers by
letter, meaning that most disclosures
required by the proposal would be made
in writing.152 The Bureau does not
anticipate that debt collectors would
incur substantial ongoing costs to
provide the proposed disclosures in
written materials because required
disclosures could be automatically
151 The Bureau understands that many debt
collectors who currently track the time-barred
status of debts to comply with existing
requirements are able to categorize debts as time
barred in an automated way. In part, this may
require debt collectors to take a conservative
approach of erring in favor of categorizing debt as
time barred in cases where there might be doubt as
to a debt’s time-barred status and where a detailed
fact-specific inquiry about a particular account
would be costly.
152 CFPB Debt Collection Operations Study, supra
note 132, at 28.

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included in written materials when
applicable.
Some debt collectors call consumers
before sending any written material and
would need to make any required
disclosure orally in their first
communication with the consumer. For
oral communications, the Bureau
anticipates that debt collectors or their
vendors would adjust collection
management systems to identify
disclosures that must be made and
prompt debt collector employees to
make oral disclosures when required.
The required disclosure would increase
the length of each conversation about a
time-barred debt by perhaps 5 to 10
seconds, though if consumers have
questions about the disclosure, this
could lengthen some calls considerably.
If the disclosure lengthens initial calls
to collect a time-barred debt by 15
seconds on average, given an assumed
average labor cost of $22 per hour for
debt collectors, this would cost
approximately $0.09 per call.153
Costs may also increase if debt
collectors and creditors increase
monitoring of calls regarding timebarred debt to ensure compliance. Many
debt collectors currently audit
telephone conversations, either by
listening to a sample of calls or by using
automated voice-recognition software,
to ensure that individual debt collectors
comply with applicable law and other
standards. A new required disclosure
for time-barred debt could increase the
cost of such monitoring, by adding to
the list of items that must be audited.
The Bureau believes that many
consumers are unaware of the statute of
limitations or may not know whether it
has expired for their debt. As discussed
above, the Bureau’s quantitative survey
suggests that some consumers might not
repay a debt if they know they cannot
be sued, although others may repay
regardless.154 While the Bureau’s
quantitative research findings show that
about 44 percent of respondents who
viewed a time-barred debt with revival
disclosure indicated they would be
‘‘very unlikely’’ to pay, about 32 percent
answered they would be likely or very
likely to pay (indicated either a 4 or 5
on a 5-point scale where 5 was ‘‘very
likely’’).155 In contrast, about 18 to 26
percent of consumers who did not see
153 Id.

at 17.
Quantitative Testing Report, supra note
64, at 28–30. In addition, another study found that,
when told they could not be sued, 34 percent of
participants reflecting on a hypothetical scenario
said they would decline to pay relative to 6 percent
who were not told they could not be sued. FTC Debt
Buying Report, supra note 8, at 47.
155 CFPB Quantitative Testing Report, supra note
64, at appendix table 23.
154 CFPB

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the revival disclosure said they would
be ‘‘very unlikely’’ to pay, and about 54
to 56 percent of these consumers said
they would be likely or very likely to
repay.156
These survey results reflect responses
to a hypothetical question by
respondents who were being asked
specifically about a debt’s time-barred
status. They suggest that the proposed
disclosures can affect consumers’
decisions about whether to repay under
certain circumstances. The degree to
which the proposed disclosures would
affect repayment of time-barred debt in
aggregate depends on a number of other
factors, including the extent to which
debt collectors actively attempt to
collect time-barred debts, whether debt
collectors are able to contact consumers,
and whether consumers are willing and
able to repay debts. To better
understand the effect of time-barred
debt disclosures on aggregate real-world
collections activity, the Bureau
examined credit report data from the
CCP. As noted above, some debt
collectors already provide time-barred
debt disclosures; some do so
voluntarily, while others are required by
State law or a consent order to do so.
While the Bureau has no data regarding
debt collectors who voluntarily provide
time-barred debt disclosures, the Bureau
has some data in the CCP regarding the
effects of disclosures mandated by State
laws. The Bureau analyzed whether a
likely time-barred collections tradeline
in the CCP has a lower probability of
being paid if there is a State-mandated
time-barred debt disclosure requirement
in effect. To determine whether a
collections tradeline is likely past the
State statute of limitations, the Bureau
used the same procedure as in its
analysis of the effects of prohibiting
threats of suit on time-barred debt in the
May 2019 Proposed Rule.157 The Bureau
identified nine States with laws or
regulations mandating some kind of
time-barred debt disclosure:
California,158 Connecticut,159
Massachusetts,160 Nevada,161 New
156 Id. The likelihood that consumers choose to
repay actual debts is likely to be different than the
rate at which survey respondents said they would
repay debt in a hypothetical situation, but the
survey findings do suggest that time-barred debt
and revival disclosures will affect some consumers’
repayment decisions.
157 See 84 FR 23274, 23381–82 (May 21, 2019).
158 Cal. Civ. Code 1788.52(d). This law only
applies to debt buyers, and so the Bureau only
considered California debts to have a disclosure
required if the CCP data indicate that the debt was
held by a debt buyer.
159 Conn. Gen. Stat. 36a–805(a)(14).
160 Mass Code Regs., tit. 904, 7.07(24).
161 Nev. Rev. Stat. 649.332(2). This regulation
only applies to ‘‘hospital’’ debt. The Bureau only

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Mexico,162 New York,163 North
Carolina,164 Vermont,165 and West
Virginia.166
The Bureau calculated the hazard rate
of payment over time in collections—
that is, the probability of payment
occurring after a given number of
months, conditional on no payment
occurring before—for all collections
tradelines in the CCP. The Bureau also
calculated the hazard rate separately for
tradelines belonging to consumers
residing in a State where a time-barred
debt disclosure would have been
required after the expiration of the
statute of limitations, and for tradelines
belonging to consumers residing in
States that did not have these
requirements.167 The Bureau then
calculated the average hazard rate based

on the number of months before or after
the probable expiration of the applicable
statute of limitations, again with
separate calculations for loans with and
without a State-mandated time-barred
debt disclosure. This calculation is
plotted in Figure 1, below.168 The
hazard of payment declines steadily
over the year leading up to the probable
expiration of the statute of limitations
and continues to decline at roughly the
same rate afterwards, with the rate of
decline flattening out slowly over time.
If the requirement to make a time-barred
debt disclosure significantly affects
payment rates, one would expect the
hazard rate in States with disclosures to
diverge downward from the rate in
States without disclosures following the
probable expiration of the State statute

States with No TBO Disclosure

,0015-·r
·12

···"--·T ·---····

of limitations. In fact, although prior to
the probable expiration of the State
statute of limitations the hazard of
payment declines slightly faster in
States with time-barred debt disclosures
than in States that do not require
disclosure, the slope flattens out more
following the probable expiration of the
statute of limitations in States with
disclosures, compared to States without.
This suggests that time-barred debt
disclosures in these States have not
resulted in a large drop in the aggregate
likelihood that consumers pay timebarred debts, although it is still
consistent with the possibility that
repayment rates are reduced for certain
types of debt or for consumers in certain
situations.

States with TBO Disclosure Required

--·•·---r ·· ·--·· ··"-- r· ···-· ··---••·r

-9

-6

-3

r·· ..

0

.. ..... r-. -· .. - .... 'I

6

9

12

Thus, while the requirement to
provide the proposed disclosures would
likely impose some costs on covered
persons, the Bureau does not expect that
the proposed disclosures would have

large effects on aggregate collections
revenue.
Alternatives considered. The Bureau
considered alternative proposals
regarding time-barred debt and revival,

including those considered as part of
the SBREFA process. In the Small
Business Review Panel Outline, the
Bureau considered an alternative that
would also require debt collectors to

considered Nevada debts to have a disclosure
required if the CCP data indicate that the tradeline
was related to a medical debt.
162 N.M. Admin. Code 12.2.12.9.
163 N.Y. Comp. Codes R. & Regs. tit. 23, 1.3.
164 N.C. Gen. Stat. 58–70–115.
165 6 Code of Vt. Rules 031–004–Rule CF 104.05.
166 W. Va. Code 46a–2–128(f).
167 The calculations rely on the assumption that
debts owed by consumers who reside in a given
State are governed by the statute of limitations in
that State and that consumers in that State receive
disclosures mandated by the law of that State. Note

that some of the States in question passed their laws
or regulations mandating a time-barred debt
disclosure during the sample period studied by the
Bureau. Specifically, California’s law became
effective January 1, 2014; Connecticut’s law became
effective October 1, 2013; Massachusetts’ regulation
became effective March 2, 2012; Nevada’s law
became effective June 13, 2007; New Mexico’s law
became effective March 15, 2011; New York’s
regulation became effective December 1, 2014;
North Carolina’s law became effective October 1,
2009; Vermont’s law became effective January 1,
1976; and West Virginia’s law became effective June
6, 2014. The CCP data used in the Bureau’s analysis

covers the period from 2005 to 2018. For purposes
of this analysis, the Bureau excluded debts
belonging to consumers in States that eventually
mandated time-barred debt disclosures if the
probable expiration of the statute of limitations
occurred before the disclosure became effective.
168 The overall level of the hazard rate in the
figure is quite low—on the order of two-tenths of
1 percent. This is to be expected given the monthly
nature of the series. Although around 10 percent of
all collections tradelines eventually show some
evidence of payment, the proportion that do so in
any given month is quite low.

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provide a disclosure when collecting
time-barred debt but would prohibit
debt collectors from collecting on timebarred debt that can be revived unless
they waive the right to sue on the debt.
Under the requirement considered,
subsequent debt collectors would be
bound by the disclosure made by any
previous debt collectors. Such a
requirement could have benefits for
consumers relative to the supplemental
proposal, because it would mean debt
would generally not be revived
regardless of whether consumers read
and understood a disclosure about
revival. Similarly, this alternative would
be more burdensome for debt collectors
than the proposed requirement because
it would prevent them from suing to
recover debts when the consumer had
taken actions that revive the debts.
However, the differences in consumer
benefits and in debt collector costs from
this alternative could be quite small
assuming that, as industry has claimed,
collectors do not in fact sue to recover
debts that have been revived.
The Bureau also considered requiring
a time-barred debt disclosure without
requiring any disclosure about revival.
Such a requirement could be less
burdensome for small entities under
some circumstances. However, the
Bureau’s quantitative disclosure testing
indicates that many consumers who
view a time-barred debt disclosure
without a disclosure about revival fail to
understand that certain actions they
take could revive the debt.169
G. Potential Reduction of Access by
Consumers to Consumer Financial
Products and Services
Economic theory indicates that it is
possible for changes in debt collection
rules, such as those contained in this
supplemental proposal, to affect
consumers’ access to credit. Under
economic theory, creditors should
decide to extend credit based on the
discounted expected value of the
revenue stream from that extension of
credit. This entails considering the
possibility that the consumer will
ultimately default and expected
payments will decrease. If the proposed
rule were to increase collection costs or
reduce revenue collected from timebarred debt, then this would reduce the
return to lending, which in theory could
lead lenders to increase the cost of
lending, restrict availability of credit, or
both.
As discussed in the May 2019
Proposed Rule, the Bureau has
considered the available empirical data
169 See CFPB Quantitative Testing Report, supra
note 64, at 16–25.

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and research on the effect of State debt
collection laws on the price and
availability of credit.170 That research
shows that State debt collection laws
affect the price and availability of credit
in ways that theory would predict, but
that effects are relatively small even for
changes in State laws that are likely
more significant than the disclosures in
this proposed rule.171 In light of that
research and the CCP analysis above,
the Bureau concludes that the
disclosures in the proposed rule are
unlikely to cause any significant
reduction in access to consumer credit.
The Bureau requests comment on this
conclusion and data that can provide
insights into the impact of the proposed
disclosures on the price and availability
of credit.
H. Potential Specific Impacts of the
Proposed Rule
1. Depository Institutions and Credit
Unions With $10 Billion or Less in Total
Assets, as Described in Section 1026
Depository institutions and credit
unions are generally not debt collectors
under the FDCPA and therefore would
not be covered under the proposal.
Creditors could experience indirect
effects from the proposal to the extent
they hire FDCPA-covered debt
collectors or sell debt in default to such
debt collectors. Such creditors could
experience higher costs if debt
collectors’ costs increase and if debt
collectors are able to pass those costs on
to creditors. The Bureau understands
that many depository institutions and
credit unions with $10 billion or less in
total assets rely on FDCPA-covered debt
collectors to collect uncollected
amounts, but the Bureau does not have
data indicating whether such
institutions are more or less likely than
other creditors to do so. The Bureau
requests additional data and other
information about potential benefits and
costs of the proposal for these
institutions.
2. Impact of the Proposed Provisions on
Consumers in Rural Areas
Consumers in rural areas may
experience benefits from the
supplemental proposed rule that are
different in certain respects from the
benefits experienced by consumers in
general. For example, consumers in
rural areas may be more likely to borrow
from small local banks and credit
170 See

84 FR 23274, 23389–91 (May 21, 2019).
example, one study found that additional
State regulations on debt collectors’ conduct caused
the success rate of a credit inquiry to decline by less
than 0.02 percentage points off a base rate of about
43 percent. See 84 FR 23274, 23389–90 (May 21,
2019).
171 For

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unions that may be less likely to
outsource debt collection to FDCPAcovered debt collectors. The Bureau
does not have any information to
suggest that consumers in rural areas are
more or less likely than other consumers
to have time-barred debt or to benefit
from disclosures about time-barred debt.
The Bureau will further consider the
impact of the proposed rule on
consumers in rural areas. The Bureau
therefore asks interested parties to
provide data, research results, and other
factual information on the impact of the
proposed rule on consumers in rural
areas.
I. Request for Information
The Bureau will further consider the
benefits, costs, and impacts of the
proposed provisions, and any
modifications to the proposed
provisions made in response to
comments, before finalizing the
proposal. As noted above, there are a
number of areas in which additional
information would allow the Bureau to
better estimate the benefits, costs, and
impacts of this proposal and more fully
inform the rulemaking. The Bureau asks
interested parties to provide comment
or data on various aspects of the
proposed rule, as detailed in the
section-by-section analysis. Information
provided by interested parties regarding
these and other aspects of the proposed
rule may be considered in the analysis
of the benefits, costs, and impacts of the
final rule. The Bureau specifically
requests precise cost or operational data
that would permit it to better evaluate
the potential implementation costs and
ongoing operational costs imposed by
the proposed provisions.
VII. Regulatory Flexibility Analysis
Under section 603(a) of the Regulatory
Flexibility Act (RFA), an initial
regulatory flexibility analysis (IRFA)
‘‘shall describe the impact of the
proposed rule on small entities.’’ 172
Section 603(b) of the RFA sets forth the
required elements of the IRFA. Section
603(b)(1) requires a description of the
reasons agency action is being
considered.173 Section 603(b)(2)
requires a succinct statement of the
objectives of, and the legal basis for, the
proposed rule.174 Section 603(b)(3)
requires a description of and, where
feasible, an estimate of the number of
small entities to which the proposed
rule will apply.175 Section 603(b)(4)
requires a description of the projected
172 5

U.S.C. 603(a).
U.S.C. 603(b)(1).
174 5 U.S.C. 603(b)(2).
175 5 U.S.C. 603(b)(3).
173 5

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reporting, recordkeeping, and other
compliance requirements of the
proposed rule, including an estimate of
the classes of small entities that will be
subject to the requirement and the types
of professional skills necessary for the
preparation of the report or record.176
Section 603(b)(5) requires identifying, to
the extent practicable, all relevant
Federal rules which may duplicate,
overlap, or conflict with the proposed
rule.177 Section 603(c) requires a
description of any significant
alternatives to the proposed rule that
accomplish the stated objectives of
applicable statutes and that minimize
any significant economic impact of the
proposed rule on small entities.178
Finally, section 603(d)(1) requires a
description of any projected increase in
the cost of credit for small entities, a
description of any significant
alternatives to the proposed rule that
accomplish the stated objectives of
applicable statutes and that minimize
any increase in the cost of credit for
small entities (if such an increase in the
cost of credit is projected), and a
description of the advice and
recommendations of representatives of
small entities relating to the cost of
credit issues.179
A. Description of the Reasons Why
Agency Action Is Being Considered
The Bureau is issuing this
supplemental proposed rule to
implement and interpret the FDCPA,
particularly with respect to debt
collection communication and
disclosures regarding time-barred debts
and revival. As discussed in part V, the
Bureau believes that the supplemental
proposed rule would provide additional
clarity about the FDCPA’s requirements
to debt collectors and consumers and
help ensure that the features of debt
collection are fully, accurately, and
effectively disclosed to consumers.

B. Statement of the Objectives of, and
Legal Basis for, the Proposed Rule

and in the section-by-section analysis in
part V.

As discussed in part IV, the Bureau
issues this supplemental proposal
pursuant to its authority under the
FDCPA and the Dodd-Frank Act. The
objectives of the supplemental proposed
rule are to clarify and implement the
FDCPA’s provisions and to further the
FDCPA’s goals of eliminating abusive
debt collection practices and ensuring
that debt collectors who refrain from
abusive debt collection practices are not
competitively disadvantaged.180 As the
first Federal agency with authority
under the FDCPA to prescribe
substantive rules with respect to the
collection of debts by debt collectors,
the Bureau proposes consumer
disclosure requirements to provide
greater clarity for both consumers and
industry participants as to the
information they must provide
consumers to comply with the law. The
Bureau intends that these clarifications
will help to eliminate abusive debt
collection practices and ensure that debt
collectors who refrain from abusive debt
collection practices are not
competitively disadvantaged.181
As amended by the Dodd-Frank Act,
FDCPA section 814(d) provides that the
Bureau may ‘‘prescribe rules with
respect to the collection of debts by debt
collectors,’’ as that term is defined in
the FDCPA.182 Section 1022(a) of the
Dodd-Frank Act provides that ‘‘[t]he
Bureau is authorized to exercise its
authorities under Federal consumer
financial law to administer, enforce, and
otherwise implement the provisions of
Federal consumer financial law.’’ 183
‘‘Federal consumer financial law’’
includes title X of the Dodd-Frank Act
and the FDCPA. The legal basis for the
proposed rule is discussed in detail in
the legal authority analysis in part IV

C. Description and, Where Feasible,
Provision of an Estimate of the Number
of Small Entities to Which the Proposed
Rule Will Apply
As discussed in the Small Business
Review Panel Report, for the purposes
of assessing the impacts of the
supplemental proposed rule on small
entities, ‘‘small entities’’ is defined in
the RFA to include small businesses,
small nonprofit organizations, and small
government jurisdictions.184 A ‘‘small
business’’ is determined by application
of SBA regulations in reference to the
North American Industry Classification
System (NAICS) classifications and size
standards.185 Under such standards, the
Small Business Review Panel (Panel)
identified four categories of small
entities that may be subject to the
proposed provisions: Collection
agencies (NAICS 561440) with annual
receipts at or below the SBA size
standard (currently $16.5 million), debt
buyers (NAICS 522298) with annual
receipts at or below the size standard
(currently $41.5 million), collection law
firms (NAICS 54110) with annual
receipts at or below the size standard
(currently $12 million), and servicers
who acquire accounts in default. These
servicers include depository institutions
(NAICS 522110, 522120, and 522130)
with assets at or below the size standard
(currently $600 million) or nondepository institutions (NAICS 522390)
with annual receipts at or below the size
standard (currently $22 million). The
Panel did not meet with small nonprofit
organizations or small government
jurisdictions.186
The following table provides the
Bureau’s estimate of the number and
types of entities that may be affected by
the proposed provisions:

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TABLE 1—ESTIMATED NUMBER OF AFFECTED ENTITIES AND SMALL ENTITIES BY CATEGORY
Category

NAICS

Collection agencies ....................
Debt buyers ................................
Collection law firms ....................
Loan servicers ............................

561440 .......................................
522298 .......................................
541110 .......................................
522110, 522120, and 522130
(depositories); 522390 (nondepositories.

176 5

181 See

177 5

U.S.C. 603(b)(4).
U.S.C. 603(b)(5).
178 5 U.S.C. 603(c).
179 5 U.S.C. 603(d)(1).
180 See 15 U.S.C. 1692(e).

182 15

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$16.5 million in annual receipts
$41.5 million in annual receipts
$12.0 million in annual receipts
$600 million in annual receipts
for depository institutions;
$22.0 million or less for nondepositories.

id.
U.S.C. 1692l(d).
183 12 U.S.C. 5512(a).
184 5 U.S.C. 601(6).

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number of
debt collectors
within category

Small entity threshold

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330
1,000
700

Estimated
number of
small entity
debt collectors
8,800
300
950
200

185 The current SBA size standards are found on
SBA’s website, http://www.sba.gov/content/tablesmall-business-size-standards.
186 Small Business Review Panel Report, supra
note 51, at 29.

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Descriptions of the four categories:
Collection agencies. The Census
Bureau defines ‘‘collection agencies’’
(NAICS code 561440) as
‘‘establishments primarily engaged in
collecting payments for claims and
remitting payments collected to their
clients.’’ 187 According to the Census
Bureau, in 2012 (the most recent year
for which detailed data are available),
there were approximately 4,000
collection agencies with paid employees
in the United States. Of these, the
Bureau estimates that 3,800 collection
agencies have $15.0 million or less in
annual receipts and are therefore small
entities.188 Census Bureau estimates
indicate that in 2012 there were also
more than 5,000 collection agencies
without employees, all of which are
presumably small entities.
Debt buyers. Debt buyers purchase
delinquent accounts and attempt to
collect amounts owed, either themselves
or through agents. The Bureau estimates
that there are approximately 330 debt
buyers in the United States, and that a
substantial majority of these are small
entities.189 Many debt buyers—
particularly those that are small
entities—also collect debt on behalf of
other debt owners.190
Collection law firms. The Bureau
estimates that there are 1,000 law firms
in the United States that either have as
their principal purpose the collection of
consumer debt or regularly collect
consumer debt owed to others, so that
the proposed rule would apply to them.
The Bureau estimates that 95 percent of
such law firms are small entities.191
187 As defined by the Census Bureau, collection
agencies include entities that collect only
commercial debt, and the proposed rule would
apply only to debt collectors of consumer debt.
However, the Bureau understands that relatively
few collection agencies collect only commercial
debt.
188 The Census Bureau estimates average annual
receipts of $95,000 per employee for collection
agencies. Given this, the Bureau assumes that all
firms with fewer than 100 employees and
approximately one-half of the firms with 100 to 499
employees are small entities, which implies
approximately 3,800 firms.
189 The Receivables Management Association, the
largest trade group for debt buyers, states that it has
approximately 300 debt buyer members and
believes that 90 percent of debt buyers are current
members.
190 The Bureau understands that debt buyers are
generally nondepositories that specialize in debt
buying and, in some cases, debt collection. The
Bureau expects that debt buyers that are not
collection agencies would be classified by the
Census Bureau under ‘‘all other nondepository
credit intermediation’’ (NAICS Code 522298).
191 The primary trade association for collection
attorneys, the National Creditors Bar Association
(NCBA), states that it has approximately 600 law
firm members, 95 percent of which are small
entities. The Bureau estimates that approximately
60 percent of law firms that collect debt are NCBA

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Loan servicers. Loan servicers would
be covered by the proposed rule if they
are covered by the FDCPA because,
among other things, they acquire the
right to service loans already in
default.192 The Bureau believes that this
is most likely to occur with regard to
companies that service mortgage loans
or student loans. The Bureau estimates
that approximately 200 such mortgage
servicers may be small entities and that
few, if any, student loan servicers that
would be covered by the proposed rule
are small.193
D. Projected Reporting, Recordkeeping,
and Other Compliance Requirements of
the Proposed Rule, Including an
Estimate of Classes of Small Entities
That Will Be Subject to the
Requirements and the Type of
Professional Skills Necessary for the
Preparation of the Report or Record
The supplemental proposed rule
would not impose new reporting or
recordkeeping requirements, but it
would impose new compliance
requirements on small entities subject to
the proposal.194 The proposed
requirements and the costs associated
with them are discussed below.
In evaluating the potential impacts of
the proposal on small entities, the
Bureau takes as a baseline the current
legal framework governing debt
collection. This includes debt collector
practices as they currently exist,
responding to the requirements of the
FDCPA as currently interpreted by
courts and law enforcement agencies,
other Federal laws, and the rules and
statutory requirements promulgated by
members and that a similar fraction of non-member
law firms are small entities.
192 The Bureau expects that loan servicers are
generally classified under NAICS code 522390,
‘‘Other Activities Related to Credit Intermediation.’’
Some depository institutions (NAICS codes 522110,
522120, and 522130) also service loans for others
and may be covered by the proposed rule.
193 Based on the December 2015 Call Report data
as compiled by SNL Financial (with respect to
insured depositories) and December 2015 data from
the Nationwide Mortgage Licensing System and
Registry (with respect to non-depositories), the
Bureau estimates that there are approximately 9,000
small entities engaged in mortgage servicing, of
which approximately 100 service more than 5,000
loans. See 81 FR 72160, 72363 (Oct. 19, 2016). The
Bureau’s estimate is based on the assumption that
all those servicing more than 5,000 loans may
acquire servicing of loans when loans are in default
and that at most 100 of those servicing 5,000 loans
or fewer acquire servicing of loans when loans are
in default.
194 While the supplemental proposed rule does
not include new recordkeeping requirements, the
Bureau notes that, by introducing a new compliance
requirement, the supplemental proposed rule may
increase the cost of complying with recordkeeping
requirements proposed in the May 2019 Proposed
Rule. This is because debt collectors would need to
retain evidence of compliance with any additional
compliance requirement.

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the States. This baseline represents the
status quo from which the impacts of
this proposal will be evaluated.
The Bureau requests comment on the
estimated impacts on small entities
discussed below and solicits data and
analysis that would supplement the
quantitative estimates discussed below
or provide quantitative estimates of
benefits, costs, or impacts for which
there are currently only qualitative
discussions.
The discussion here is confined to the
direct costs to small entities of
complying with the requirements of the
supplemental proposed rule, if
finalized. Other impacts, such as the
impacts of disclosures about time-barred
debt on consumers’ repayment
decisions, are discussed in part VI. The
Bureau believes that, except where
otherwise noted, the impacts discussed
in part VI would apply to small entities.
The supplemental proposal would
require small entity debt collectors that
attempt to collect time-barred debt to
provide new disclosures in certain
communications with consumers. This
could impose one-time costs for systems
that identify whether a debt is time
barred and whether (and if so, when) it
is subject to revival, and it may impose
ongoing costs both to determine
whether debts are time barred and to
make disclosures when appropriate.
To quantify costs of the proposal to
small entities, the Bureau would need to
estimate the number of small entity debt
collectors that collect time-barred debt,
the number of time-barred accounts they
collect, the cost to such debt collectors
of determining whether a debt is time
barred and whether and when it can be
revived, and the cost of making the
proposed disclosures when appropriate.
The Bureau does not have
representative data that permit it to
estimate the number of small entity debt
collectors that collect time-barred
accounts or the number of time-barred
accounts they collect. The Bureau
understands based on industry outreach
that many debt collectors do not collect
time-barred accounts. Even debt
collectors that do not regularly collect
time-barred debt might need to review
systems to ensure that they are not
communicating about time-barred debts
without providing the appropriate
proposed disclosure in circumstances
when they are required; however, the
Bureau expects that the burden of the
proposed provision on such debt
collectors would be lower than for debt
collectors that regularly collect timebarred accounts.
Among those debt collectors that do
regularly attempt to collect time-barred
accounts, the Bureau understands that

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some currently disclose to consumers
that they cannot sue to collect the debt.
Moreover, debt collectors who are
collecting debt in certain jurisdictions,
such as California and New York,
already must make such disclosures in
at least some circumstances. Also, debt
collectors that litigate accounts must
know whether an account is time barred
to avoid threatening to sue or suing on
time-barred accounts in violation of the
FDCPA as interpreted by existing
FDCPA case law. Thus, some debt
collectors, particularly ones that collect
nationwide or that engage in litigation,
already have a process in place for
identifying time-barred accounts and,
where they do attempt to collect timebarred debt, for providing disclosures to
consumers about the time-barred status
of such accounts.195
The Bureau understands that
determining whether an account is time
barred is not always straightforward,
particularly for debt collectors that
operate in a range of jurisdictions.
Different States have different statutes of
limitations for different types of debt.196
Which statute applies depends on
questions such as where the consumer
resides and the nature of the credit
contract, as well as which State’s law a
court applies to a given case. As noted
above, many debt collectors already
must make decisions about a debt’s
time-barred status to determine whether
a lawsuit is permissible or, in certain
States, whether particular disclosures
are required. Even for these debt
collectors, however, the proposed rule
would increase the importance of
making the correct determination. The
Bureau anticipates that some collection
agencies and debt buyers would incur
legal and programming costs to develop
a system to identify time-barred
accounts and incorporate the
determination into the collection
management system. These costs could
be mitigated somewhat by the proposed
rule’s ‘‘know or should know’’ standard
for the debt’s time-barred status, which
could reduce the likelihood that debt
collectors would be held liable for
failing to identify time-barred debt. Debt
collectors would also incur costs to train
staff to answer consumer questions
about the proposed disclosures and to
incorporate information about the new
disclosures into their systems for
195 Consistent with this, the FTC found that debt
buyers commonly consider the prevalence of timebarred debt when bidding on portfolios of debt,
suggesting that debt buyers and sellers of debt
regularly determine whether debts are time barred.
See FTC Debt Buying Report, supra note 8, at 21.
196 Small Business Review Panel Report, supra
note 51, at 25.

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managing communication with
consumers.
Debt collectors could also incur
ongoing costs of determining whether
debts are time barred. Debt collectors
would need to update systems from
time to time to reflect changes in State
laws regarding statutes of limitations
and might need to perform new legal
analyses when facing fact patterns that
are new to their business, such as when
beginning to collect debt from
consumers in a particular jurisdiction
for the first time.
For accounts that are identified as
time barred, debt collectors would need
to make disclosures with certain written
and oral communications. This would
impose direct costs to make the
disclosures and potentially indirect
costs because consumers may be less
likely to pay debts after being informed
that those debts are time barred.
Debt collectors most often initiate
communication with consumers by
letter, meaning that the majority of
disclosures required by the proposal
would be made in writing.197 The
Bureau does not anticipate that debt
collectors would incur substantial
ongoing costs to provide the proposed
disclosures in written materials because
required disclosures could be
automatically included in written
materials when applicable.
Some debt collectors call consumers
before sending any written material and
would need to make any required
disclosure orally in their first
communication with the consumer. For
oral communications, the Bureau
anticipates that debt collectors or their
vendors would adjust collection
management systems to identify
disclosures that must be made and
prompt debt collector employees to
make oral disclosures when required.
The required disclosure would increase
the length of each conversation about a
time-barred debt by perhaps 5 to 10
seconds, though if consumers have
questions about the disclosure, this
could lengthen some calls considerably.
If the disclosure lengthens initial calls
to collect a time-barred debt by 15
seconds on average, given an assumed
average debt collector labor cost of $22
per hour, this would cost approximately
$0.09 per call.198
Costs may also increase if debt
collectors and creditors increase
monitoring of calls regarding timebarred debt to ensure compliance. Many
debt collectors currently audit
telephone conversations, either by
197 CFPB Debt Collection Operations Study, supra
note 132, at 28.
198 Id. at 17.

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listening to a sample of calls or by using
automated voice-recognition software,
to ensure that individual debt collectors
comply with applicable law and other
standards. A new required disclosure
for time-barred debt could increase the
cost of such monitoring, by adding to
the list of items that must be audited.
E. Identification, to the Extent
Practicable, of All Relevant Federal
Rules That May Duplicate, Overlap, or
Conflict With the Proposed Rule
Certain other Federal laws and
regulations include requirements that
apply to FDCPA-covered debt collectors.
However, consistent with the findings of
the Panel, the Bureau is not aware of
any other Federal regulations that
currently duplicate, overlap, or conflict
with the proposed rule.
The Bureau requests comment on the
intersection between the proposed rule
and other Federal laws and regulations.
The Bureau specifically requests
comment on conflicts that may arise
between the proposed rule and other
Federal laws and regulations and
methods to minimize such conflicts to
the extent they exist.
F. Description of Any Significant
Alternatives to the Proposed Rule That
Accomplish the Stated Objectives of the
Applicable Statutes and Minimize Any
Significant Economic Impact of the
Proposed Rule on Small Entities
Section 603(c) of the RFA requires the
Bureau to describe in the IRFA any
significant alternatives to the proposed
rule that accomplish the stated
objectives of applicable statutes and that
minimize any significant economic
impact of the proposed rule on small
entities.199 In developing the proposed
rule, the Bureau has considered
alternative provisions and believes that
none of the alternatives considered
would be as effective at accomplishing
the stated objectives of the FDCPA and
the applicable provisions of title X of
the Dodd-Frank Act while minimizing
the impact of the proposed rule on small
entities.200
In developing the proposal, the
Bureau considered a number of
alternatives, including those considered
as part of the SBREFA process. In the
Small Business Review Panel Outline,
the Bureau considered an alternative
that would also require debt collectors
to provide a disclosure when collecting
time-barred debt but would prohibit
debt collectors from collecting on timebarred debt that can be revived unless
199 5

U.S.C. 603(c).
alternatives, including those suggested
by commenters, are discussed in part V above.
200 Certain

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they waive the right to sue on the debt.
Under the requirement considered,
subsequent debt collectors would be
bound by the disclosure made by any
previous debt collectors. The Bureau
believes that such a requirement would
be more burdensome for small entities
than the proposed requirement.
The Bureau also considered requiring
a time-barred debt disclosure without
requiring any disclosure about revival.
Such a requirement could be less
burdensome for small entities under
some circumstances. However, the
Bureau’s quantitative disclosure testing
indicates that many consumers who
view a time-barred debt disclosure
without a disclosure about revival fail to
understand that certain actions they
take could revive the debt.201
G. Discussion of Impact on Cost of
Credit for Small Entities
Section 603(d) of the RFA requires the
Bureau to consult with small entities
regarding the potential impact of the
proposed rule on the cost of credit for
small entities and related matters.202 To
satisfy these statutory requirements, the
Bureau provided notification to the
Chief Counsel for Advocacy of the Small
Business Administration (Chief
Counsel) that the Bureau would collect
the advice and recommendations of the
same small entity representatives
identified in consultation with the Chief
Counsel through the SBREFA process
concerning any projected impact and
the proposed rule on the cost of credit
for small entities. The Bureau sought to
collect the advice and recommendations
of the small entity representatives
during the Small Business Review Panel
meeting regarding the potential impact
on the cost of business credit because,
as small debt collectors with credit
needs, the small entity representatives
could provide valuable input on any
such impact related to the proposed
rule.
The Bureau’s Small Business Review
Panel Outline asked small entity
representatives to comment on how the
proposals under consideration would
affect the cost of credit to small entities.
The Bureau believes that the disclosures
in the supplemental proposal will have
little impact on the cost of credit to
small entities. The Bureau does
recognize that consumer credit could
become more expensive and less
available as a result of requirements that
restrict the collection of debt; however,
the Bureau does not anticipate that the
requirements of this supplemental
201 See CFPB Quantitative Testing Report, supra
note 64, at 17–24.
202 5 U.S.C. 603(d).

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proposal would have any significant
impact on the cost or availability of
consumer credit. Many small entities
affected by the disclosures in the
supplemental proposal use consumer
credit as a source of credit and may,
therefore, see costs rise if consumer
credit availability decreases. The Bureau
does not expect this to be a large effect
and does not anticipate measurable
impact.
During the SBREFA process, several
small entity representatives said that the
proposals under consideration at that
time, which included time-barred debt
disclosures among several other
proposals, could have an impact on the
cost of credit for them and for their
small business clients. Some small
entity representatives said that they use
lines of credit in their business and that
regulations that raise their costs or
reduce their revenue could mean they
are unable to meet covenants in their
loan agreements, causing lenders to
reduce access to capital or increase their
borrowing costs.
VIII. Paperwork Reduction Act
Under the Paperwork Reduction Act
of 1995 (PRA),203 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.
As part of its continuing effort to
reduce paperwork and respondent
burden, the Bureau conducts a
preclearance consultation program to
provide the general public and Federal
agencies with an opportunity to
comment on the information collection
requirements in accordance with the
PRA. This helps ensure that the public
understands the Bureau’s requirements
or instructions, respondents can provide
the requested data in the desired format,
reporting burden (time and financial
resources) is minimized, collection
instruments are clearly understood, and
the Bureau can properly assess the
impact of collection requirements on
respondents.
The supplemental proposed rule
would amend 12 CFR part 1006
(Regulation F), which implements the
FDCPA. The Bureau’s OMB control
number for Regulation F is 3170–0056.
This supplemental proposed rule along
with the May 2019 Proposed Rule
203 44

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12695

would revise the information collection
requirements contained in Regulation F
that OMB has approved under that OMB
control number.
The supplemental proposal would
require a new information collection
requirement under Regulation F, in
proposed § 1006.26 regarding timebarred debts, which would require debt
collectors to provide a particular
disclosure in certain communications
when attempting to collect time-barred
debt.
This information collection would be
required to provide benefits for
consumers and would be mandatory.
Because the Bureau does not collect any
information, no issue of confidentiality
arises. The likely respondents would be
for-profit businesses that are FDCPAcovered debt collectors.
The collection of information
contained in this supplemental
proposed rule, and identified as such,
has been submitted to OMB for review
under section 3507(d) of the PRA. A
complete description of the information
collection requirement, including the
burden estimate methods, is provided in
the information collection request (ICR)
that the Bureau has submitted to OMB
under the requirements of the PRA.
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: Regulation F: Fair
Debt Collection Practices Act.
OMB Control Number: 3170–0056.
Type of Review: Revision of a
currently approved collection.
Affected Public: Private Sector.
Estimated Number of Respondents:
12,027.204
204 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 proposed 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: 2,360,000.205
Comments are invited on: (a) Whether
the collection of information is
necessary for the proper performance of
the functions of the Bureau, including
whether the information will have
practical utility; (b) the accuracy of the
Bureau’s estimate of the burden of the
collection of information, including the
validity of the methods and the
assumptions used; (c) ways to enhance
the quality, utility, and clarity of the
information to be collected; and (d)
ways to minimize the burden of the
collection of information on
respondents, including through the use
of automated collection techniques or
other forms of information technology.
Comments submitted in response to this
supplemental proposal will be
summarized and/or included in the
request for OMB approval. All
comments will become a matter of
public record.
If applicable, the notice of final rule
will display the control number
assigned by OMB to any information
collection requirements proposed herein
and adopted in the final rule.
List of Subjects in 12 CFR Part 1006
Administrative practice and
procedure, Consumer protection, Credit,
Debt collection, Intergovernmental
relations.
Authority and Issuance
For the reasons set forth above, the
Bureau proposes that Regulation F, 12
CFR part 1006, as proposed to be
amended on May 21, 2019 (84 FR
23274), be further amended as follows:
PART 1006—DEBT COLLECTION
PRACTICES (REGULATION F)
1. The authority citation for part 1006
continues to read as follows:

■

Authority: 12 U.S.C. 5512, 5514(b), 5531,
5532; 15 U.S.C. 1692l(d), 1692o, 7004.

Subpart B—Rules for FDCPA Debt
Collectors
2. Section 1006.26 is amended by
adding paragraph (c) to read as follows:

■

§ 1006.26

Collection of time-barred debts.

lotter on DSKBCFDHB2PROD with PROPOSALS2

*

*
*
*
*
(c) Disclosures required. (1) In
general. A debt collector who knows or
should know that a debt is time barred
when the debt collector makes the
initial communication as defined in

205 The Bureau’s share of burden hours for this
rule is 1,180,000 hours including 150,000 hours of
burden that would be added by the new
information collections added by the supplemental
proposed rule.

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§ 1006.34(b)(2) must, in that initial
communication and on any validation
notice required by § 1006.34(a)(1)(i)(B),
clearly and conspicuously disclose:
(i) That the law limits how long the
consumer can be sued for a debt and
that, because of the age of the debt, the
debt collector will not sue the consumer
to collect it; and
(ii) If, under applicable law, the debt
collector’s right to bring a legal action
against the consumer can be revived, the
fact that revival can occur and the
circumstances in which it can occur.
(2) Additional circumstances in which
disclosures are required. (i) Debts that
become time barred. A debt collector
who knows or should know that a debt
has become time barred after the debt
collector has made the initial
communication as defined in
§ 1006.34(b)(2) but before the debt
collector has sent any validation notice
required by § 1006.34(a)(1)(i)(B) must
provide the disclosures required by
paragraph (c)(1) of this section in the
debt collector’s first communication, if
any, with the consumer on or after the
date on which the debt collector knows
or should know that the debt became
time barred, and on any validation
notice required by § 1006.34(a)(1)(i)(B).
A debt collector who knows or should
know that a debt has become time
barred after the debt collector has made
the initial communication as defined in
§ 1006.34(b)(2) and has sent any
validation notice required by
§ 1006.34(a)(1)(i)(B) must provide the
disclosures required by paragraph (c)(1)
of this section in the debt collector’s
first communication, if any, with the
consumer on or after the date on which
the debt collector knows or should
know that the debt became time barred.
(ii) Change in debt collector’s
knowledge. A debt collector who neither
knows nor should know that a timebarred debt is time barred when the debt
collector makes the initial
communication as defined in
§ 1006.34(b)(2), but who knows or
should know that the debt is time barred
before the debt collector has sent any
validation notice required by
§ 1006.34(a)(1)(i)(B), must provide the
disclosures required by paragraph (c)(1)
of this section in the debt collector’s
first communication, if any, with the
consumer on or after the date on which
the debt collector knows or should
know that the debt is time barred, and
on any validation notice required by
§ 1006.34(a)(1)(i)(B). A debt collector
who neither knows nor should know
that a time-barred debt is time barred
when the debt collector makes the
initial communication as defined in
§ 1006.34(b)(2) and sends any validation

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notice required by § 1006.34(a)(1)(i)(B),
but who later knows or should know
that the debt is time barred, must
provide the disclosures required by
paragraph (c)(1) of this section in the
debt collector’s first communication, if
any, with the consumer on or after the
date on which the debt collector knows
or should know that the debt was time
barred.
(3) Form and delivery of disclosures.
(i) In general. When provided on a
validation notice, the content, format,
and placement of the disclosures
required by paragraph (c)(1) of this
section must be substantially similar to
such disclosures on Model Form B–4,
B–5, B–6, or B–7 in appendix B of this
part, as applicable. When provided
orally or in a written communication
that is not a validation notice, the
content of the disclosures required by
paragraph (c)(1) of this section must be
substantially similar to such disclosures
on Model Form B–4, B–5, B–6, or B–7
in appendix B of this part, as applicable.
(ii) Safe harbor. When providing the
disclosures required by paragraph (c)(1)
of this section on a validation notice, a
debt collector who uses Model Form B–
4, B–5, B–6, or B–7 in appendix B of
this part, as applicable, complies with
the requirements of paragraphs (c)(1)
and (3)(i) of this section. When
providing the disclosures required by
paragraph (c)(1) of this section orally or
in a written communication that is not
a validation notice, a debt collector who
uses the relevant content of Model Form
B–4, B–5, B–6, or B–7, as applicable,
complies with the requirements of
paragraphs (c)(1) and (3)(i) of this
section.
(iii) Delivery. When providing the
disclosures required by paragraph (c)(1)
of this section on a validation notice or
a written communication that is not a
validation notice, a debt collector must
do so in a manner permitted by
§ 1006.42.
(iv) Translated disclosures. A debt
collector must make the disclosures
required by paragraph (c)(1) of this
section in the same language or
languages used for the rest of the
communication in which the
disclosures are conveyed. Any
translation of the required disclosures
must be complete and accurate.
■ 3. Section 1006.34 is amended by
adding paragraph (c)(2)(xi) to read as
follows:
§ 1006.34

Notice for validation of debts.

*

*
*
*
*
(c) * * *
(2) * * *
(xi) A time-barred debt disclosure, or
a time-barred debt and a revival

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disclosure, if the debt collector
determines after a reasonable
investigation that such disclosures are
required by § 1006.26(c).
*
*
*
*
*

4. Appendix B to part 1006 is
amended by adding B–4 through B–7 to
read as follows:

■

Appendix B to Part 1006—Model Forms
and Clauses
*

*

*

*

*

BILLING CODE 4810–AM–P

B–4 Model Form for Time-Barred Debt
Disclosure § 1006.26

North South Group
P,Q, Box•t23456
Pa~dena, QA91111,12::14
(800) 123•4567from8am.tQ 8pm EST, Mondayto Saturday
VtfW!;/lf,North$outhG.roup.com

To:

PersonA
2$23.PiarkStreet
Apartment 123
Bi:lthesda; MD 20800

Reference: 584-345

North South Group is a debt coDector. We are frying to coifecta debt thaf you owe to Bank. of
RQckville. Wewm use any iOformatiQn yqu give u1;Jq help coHect the. debt

H9W can ypu cJispµte the del>f?:
You had a.Main Street:Department StQrecredit card from Bank
.otRo.c.kville With ac®Unt nur:nber. 123•45JH89.
Asof January 2, 2009, yol;I owed:
13e~en January 2,.2009.andtoday:
Yoll Wtirecharged thi.sa.n,ountin interest:
You were charged thisan,ount. in tees;
You paid or Wtire credited this an,ount
toward the:debt:

+

$

+

$

75:00
25;00,

-

$

50.:00

• CaH1>tWrite~!JSbyAprtl 30,W1$,t!)di.sputeanor
partofthedebt ff. you do not. wewrn assumethatour
inrotmatlc>n is ec>rrect, ff Y(,u ~.to us byApriL$9, 201s, we
must stop collection on any arnount you dispute until we send
yc>Uinfc>rmatic:m th;a.tshovvs yc>u o'M'J the debt

• You may use the form beloworyou may write tO' uswithoutthe
form.You may a1so include supp6ttrnGt do1;uments. we accept
disputeselectronicailyatwww.NorthSouthGroup.com/dispute,

Whatelse can you do?
• Write to ask for the name and address oftheoriginal
e.reditor. lfyouwrtte by April 30, :WW; \\'&\/vii.I stop oollectipri
untilwesend·youthatinformation.You may use the form
beldili/c>r write.to us wtthoutthe, form.
accept such
requests erecironicaflyatwww. No.rth$Q4thGroqp,comi
request.

we

• Learn· moreaboutyourr1gtits undertedera.1 laW,.Fcir
instance, youhavetherighfto stop or lii'l'lit how.wecontact·
.you. Go,towww,consumerfinance:gov,

• CMtact .us.abOut your payroentoptr6ii!'/.
•• Review.state. law disclosures on reverse skle; if:applicabre.
•· P6ngaseen contactocon nosotros parasoiicitar una copfa'de
este fotmulari6 en.espanoL

How do youwant to respond?
(;~ a/I that apply:
1:1 !Want fodisputethe debtbecause I think:

Maffthiis torm to;
North $out11 Group
P.O. Efox 123456
Pasadena, bA 91fH~i2j4

□

This is. not my debt
The amocmt is v,,(On{t.
Cl Other(pleasedescdbe.on reverse or
attach additional inforr:rtation).
□

1:1 l\iiiintyou to send methe.nam-e and

tl !enclosed this amount

~I$_·----~.

Make.your c.he<;kpayable.to Bank.of Rockville.
[ncludethe.reference.number584,M5.

Md20800

□ Quiero estaformularfoen.espafiol.

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EP03MR20.003

lotter on DSKBCFDHB2PROD with PROPOSALS2

address of the.original creditor.
persotrA
.'2323 Park street
.A;partment123 Bethesda,

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Federal Register / Vol. 85, No. 42 / Tuesday, March 3, 2020 / Proposed Rules

B–5 Model Form for Time-Barred Debt
and Revival Disclosure (Payment and
Written Acknowledgement) § 1006.26
North South Group
P.O. Box 123456
Pasadena, CA 91111-1234
(800} 123•4567 from 8am to 8pm EST, Monday to Saturday
www. NorthSouthGroup~com

To:

Person.A
2323 Park street
Apartment 123
Bethesda, MD 20800

Reference: 584-345

North South Group is a debt collector. We are trying to collect a debt that you owe to Bank of
Rockville. Wewill use any information you give us to help collect the debt
Our information shows:

How can YQU dispute the d~bt?

You had a Main Street Department store credit card from Bank

• can or write tous byApnl 30, 2019, -to dispute all or
part ofthe. debt If you do not, we will assume that our
information is correct If you~ to us by April 30, 2tm:l; we
must stop collection on any amount you.dispute until we send
yocdnformation that shows you owe the ttebt.

of Rockville with account nl!mber 123•456•789.
As of Januai:y 2, 2009, you owed:

$ 2,234.56

Between January 2, 2000-and today:
You were charged this amount in in~erest:

+

$

75.00

You were charged this amount in fees;

+

$

25.00

You paid or were credited_ this amount
toward the.debt:

• You may use the form below or you may write to us without the
form. You may also·include.supporting documents. We accept
disputes electronlea Uy at W'-NIN. NorthSouthGrouf).Com/dispute.

50.00

What else can you do?
• Write to ask for the name-and address of the original
creditor. If you write by April 30, 2019, ~ will stop collection
until we·send you thafinformation, You may use the form
below.or write to us withoutthe form: We accept such
requestselectronica!ly-at_www.NorthSouthGroup.com/
regue§t.
• Learn more aboutyour rtghts uni:terfederal law. For
instance, you have the right to stop or timit how Wf: contact
you. Go to www,consumerfinance.-gov.
• Contact .usabout your payment options.
• Review state law disclosures on reverse side; if applicable:
• Pongase en contacto.con nosotros para solicitar una cop[a de
este formulariO en espaflol.

How do you want to respond?
Che<;kall that apply:
□ I want to dispute the debt because I think:

Mail thisform-to:
North South Group
P.O. Box 123456
Pasadena, CA-S1111·1234

□

This is not my debt
The amount is wrong.
□ Other (please describe on reverse or
attacihadditiohal information},
□

0 lWantyoUtoserid met-heriamearid
address of tile original creditor.

□

I$-~~---'

I enclosed f11is-amount ..

Make your .oheolc payable to. Bank ofRoc;kvJ/le,
Include the reference:number5$4-345,
□ Quiero esta formularlo en espai'ioi.

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Person A
2323 Park Street
f.\partrnent 123
Bethesda, MD 20800

12699

Federal Register / Vol. 85, No. 42 / Tuesday, March 3, 2020 / Proposed Rules
B–6 Model Form for Time-Barred Debt
and Revival Disclosure (Payment)
§ 1006.26
North South Group

To:

Person A

.P.O. Box 123456
Pasadena, GA 91111·1234
.(800} 123-4567 from .Sam to 8pm EST,. Monday to Saturday

2323 Park.street
Apartment 123
Bethesda,

www.. NorthSouthGroup.-com

MD 20800

Reference: 584~345

North South Group is a debt collector. We are trying to collect a debt that you owe to Bank of
Rockville. ~will use any information you give usto help collect the debt.

Our infonnation shows:

How can you dispute the debt?

You had a Main Street Department store credit.card from Bank

• Call or write tous byApril.30, 2019, to dispute au or
part of the debt. If youdp not, wewi.11 assume that our
information is correct. Ifyou ~ to us by April 30, 2019; we
must stop collection on any amount you dispute until we send

cf .Rockville with account numlier 123-456-789..
As of January 2, 2009, you owed:

$ 2;234,56

youinformation thatsh-Ows you

Between January 2, 2009 and today:
You were charged this amount in interest:

+

$

You were charged this a.mount in fees;

+

$

75.00
25.00

-

$

50.00

You paid or were credited .this amount
toward the debt:

• You

owe the debt

may use the form below or you may write to us without the

form.You may a~ includesupportlng documents. We.accept
.dlSJjutes electronically at www.NorthSouthGroup.com/di$pute.

What else can you do?
• Write to ask for the name and address of the original
creditor. lfyouwrite by April 30, 2019, v,;e will $top collaction
untit we sendyou that information. You may use the form
bekiw or write to us.without the form. We accept such.
requests electronicaUyat www. NorthSouthG roup. comf ·

request.

• Learn more a.bout your rights under federal law. For
instance, you have the right to $top or limit how we contact
you. Go to www.consumerfinance.gov.
• Gohtact .us about your payment options.
• Review state law disclo$ure$.Qlt reverse side, if applicable.
" P6ngase en contacto con no$0tro$ para $Olicitar una copra de
este for mu lario en e$panol.

How do you want to respond?
Check all. that apply:
□ I wantto dispute the debt because I think:

Mall this form to:
North South Group

P.O. Box 1'.2345$
Pas:adena,·CA91111-1234

□

Thi$ i$ not my debt.

□

The amount is wrong.

0 Other (please des;cribe on reverre or
attach additional information).

o twilntyou to send rnethenameai:td.
address of the. origii:tal creditor.
PersohA

'tJ

2323 Park Street

$

·

1

MIJ20800

ti Quiero esta formula no en espai'iof.

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I

Malllect the debt.
Our information shows:

How can you dispute the debt?

You had a Main Street'Oepartment Store credit card from.Sank

• can or write to us byApril30, 2019, to dispute a:u or
part:ofthe:debt If you do not, weWi.ll assume that our

of RockVilf€! With acco1.m.tnumber 123•456,789.

informatbn is correct.
$ 2,234,56

As.of January 2, 2009, you owed:

If you ~ t o us by April30; 20i9, we

must stop collection on any amount you dispute until we send
you information that shows you owe the debt

Between January 2, 2000 and today:
You were charged this amotmt in interest:

+

$

75.00

You were charged this amount in fees:

+

$

25.00

-

$

50:00

You paid or were credited this amount
toward the debt:

• You may use the rorm below or you may write to us Without the

form, You may atso Include supporting documents. we accept
-disputes electronicaHy atwww. NorthSouthGroup.corh/dlspute.

What else can you do?
• Write to ask for the: name and address of the original
creditor. If you write by April 30, 2019, we will stop collection.
until we send you that.information. You may use the form
below or write to

us Without the fOrm. We accept such

requesls etectronicallyatwww.NorthSouthGroup.com/
request.
• Learn more about Y<>tif tights under federal 1aw, For
instance,

you have:fhe righfto stop or limit how we contact

you. Go to www.consumerfinance.gov.
• Cohtacfos.about your payment Options.
• Review .state law disclosures on reverse side, if applicable.
• P6ngase en contacto con ·nosotros para solicitar una copia de
este fotmulario

en espaflol.

How do you want to te$pond?
Check all that apply:

MaH this form to:

D I want to dispute the debt because I think:

North South Group

□ This is

P.(L Box 123456

□

Pasadena, CA 911.11-1234

Cl

not my debt.

The amount is wrong.
Other (please describe on reverse or

attadh ..additional information).

o

1.wanty.ou to.se:nct

met.he name arid

address of the original creditor.

I$__··.-'---""----"

f'Eii's_Oii A

Cl I enclosed thisamount: ...

2323 Park Street

Makeyout cneok payable. to Bank of Rockville.
lnclucfethereferencenumber!'584•M5.

Apartment 123

Cl Quiercresta tormulario en espanoL
BILLING CODE 4810–AM–C

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Bethesda, MD,20000

Federal Register / Vol. 85, No. 42 / Tuesday, March 3, 2020 / Proposed Rules
5. In Supplement I to Part 1006—
Official Interpretations, new Section
1006.26—Collection of Time-Barred
Debt is added to read as follows:

lotter on DSKBCFDHB2PROD with PROPOSALS2

■

Section 1006.26—Collection of TimeBarred Debt
26(c) Disclosures required.
26(c)(1) In general.
1. Clearly and conspicuously. The
disclosures required by § 1006.26(c)(1)
must be provided clearly and
conspicuously. The term ‘‘clear and
conspicuous’’ is defined in
§ 1006.34(b)(1).
2. Validation notice in initial
communication. The disclosures
required by § 1006.26(c)(1) must be
provided in the initial communication
as defined in § 1006.34(b)(2) and on any
validation notice required by
§ 1006.34(a)(1)(i)(B). A debt collector
who sends a validation notice in the
initial communication pursuant to
§ 1006.34(a)(1)(i)(A) complies with
§ 1006.26(c)(1) by providing the
required disclosures on the validation
notice.
Paragraph 26(c)(1)(ii).
1. Revival disclosures. If a debt
collector’s right to bring a legal action
against a consumer to collect a debt can
be revived under applicable law,
§ 1006.26(c)(1)(ii) requires a debt
collector who collects a debt that the
debt collector knows or should know is
time barred to disclose the fact that
revival can occur and the circumstances
in which it can occur. To satisfy the
§ 1006.26(c)(1)(ii) disclosure
requirement, a debt collector first must
determine which State’s law applies and
the circumstances under which that
State permits revival, if any. Then, for
example, if a debt collector determines
that applicable State law permits revival
only if the consumer makes a payment,
the debt collector must provide the
time-barred debt and revival disclosure
shown on Model Form B–6 in appendix
B of this part, or a substantially similar
disclosure. If, on the other hand, a debt
collector determines that applicable
State law does not permit revival
§ 1006.26(c)(1)(ii) does not apply and
the debt collector must provide the
time-barred debt disclosure shown on
Model Form B–4 in appendix B of this
part, or a substantially similar
disclosure.
26(c)(2) Additional circumstances in
which disclosures are required.
26(c)(2)(i) Debts that become time
barred.
1. Debts that become time barred after
the debt collector has made the initial
communication but before the debt
collector has sent the validation notice.
Under § 1006.26(c)(2)(i), a debt collector

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who knows or should know that a debt
has become time barred after the debt
collector has made the initial
communication as defined in
§ 1006.34(b)(2) but before the debt
collector has sent any validation notice
required by § 1006.34(a)(1)(i)(B) must
provide the disclosures required by
§ 1006.26(c)(1) in the debt collector’s
first communication, if any, with the
consumer on or after the date on which
the debt collector knows or should
know that the debt became time barred,
and on any validation notice required
by § 1006.34(a)(1)(i)(B). The following
example illustrates the rule:
i. A creditor hires ABC debt collector
to collect a debt that ABC debt collector
knows will become time barred on June
30. ABC debt collector’s initial
communication with the consumer
takes place by telephone on June 27.
ABC debt collector’s next
communication with the consumer
takes place by telephone on July 1.
Under § 1006.26(c)(2)(i), ABC debt
collector must provide the disclosures
required by § 1006.26(c)(1) in that
telephone conversation. The following
day, ABC debt collector sends a
validation notice to the consumer.
Under § 1006.26(c)(2)(i), the validation
notice must include the disclosures
required by § 1006.26(c)(1).
2. Debts that become time barred after
the debt collector has made the initial
communication and has sent the
validation notice. Under
§ 1006.26(c)(2)(i), a debt collector who
knows or should know that a debt has
become time barred after the debt
collector has made the initial
communication as defined in
§ 1006.34(b)(2) and has sent any
validation notice required by
§ 1006.34(a)(1)(i)(B) must provide the
disclosures required by § 1006.26(c)(1)
in the debt collector’s first
communication, if any, with the
consumer on or after the date on which
the debt collector knows or should
know that the debt became time barred.
The following example illustrates the
rule:
i. A creditor hires ABC debt collector
to collect a debt. ABC debt collector
knows that the applicable statute of
limitations will expire in one month
and promptly sends the consumer a
validation notice, which is the debt
collector’s initial communication with
the consumer. The next communication
between ABC debt collector and the
consumer takes place over the telephone
two weeks after the statute of limitations
has expired. Under § 1006.26(c)(2)(i),
ABC debt collector must provide the
disclosures required by § 1006.26(c)(1)
in that telephone communication.

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26(c)(2)(ii) Change in debt collector’s
knowledge.
1. Change in debt collector’s
knowledge after the debt collector has
made the initial communication but
before the debt collector has sent the
validation notice. Under
§ 1006.26(c)(2)(ii), a debt collector who
neither knows nor should know that a
time-barred debt is time barred when
the debt collector makes the initial
communication as defined in
§ 1006.34(b)(2), but who knows or
should know that the debt is time barred
before the debt collector has sent any
validation notice required by
§ 1006.34(a)(1)(i)(B), must provide the
disclosures required by § 1006.26(c)(1)
in the debt collector’s first
communication, if any, with the
consumer on or after the date on which
the debt collector knows or should
know that the debt is time barred, and
on any validation notice required by
§ 1006.34(a)(1)(i)(B). The following
example illustrates the rule.
i. A creditor hires ABC debt collector
to collect a debt. Although the debt is
time barred, ABC debt collector neither
knows nor should know that the debt is
time barred. ABC debt collector has an
initial communication with the
consumer that does not include the
disclosures required by § 1006.26(c)(1).
Because ABC debt collector neither
knew nor should have known that the
debt was time barred, ABC debt
collector has not violated
§ 1006.26(c)(1). The next day, before
sending the validation notice required
by § 1006.34(a)(1)(i)(B), ABC debt
collector learns that the debt was, in
fact, time barred at the time of the initial
communication. Under
§ 1006.26(c)(2)(ii), ABC debt collector
must provide the disclosures required
by § 1006.26(c)(1) in its next
communication, if any, with the
consumer, and on any validation notice
required by § 1006.34(a)(1)(i)(B).
2. Change in debt collector’s
knowledge after the debt collector has
made the initial communication and
has sent the validation notice. Under
§ 1006.26(c)(2)(ii), a debt collector who
neither knows nor should know that a
time-barred debt is time barred when
the debt collector makes the initial
communication as defined in
§ 1006.34(b)(2) and sends any validation
notice required by § 1006.34(a)(1)(i)(B),
but who later knows or should know
that the debt is time barred, must
provide the disclosures required by
§ 1006.26(c)(1) in the debt collector’s
first communication, if any, with the
consumer on or after the date on which
the debt collector knows or should

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Federal Register / Vol. 85, No. 42 / Tuesday, March 3, 2020 / Proposed Rules

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know that the debt was time barred. The
following example illustrates the rule:
i. A creditor hires ABC debt collector
to collect a debt. Although the debt is
time barred, ABC debt collector neither
knows nor should know that the debt is
time barred. ABC debt collector has an
initial communication with the
consumer and sends a validation notice
to the consumer, neither of which
includes the disclosures required by
§ 1006.26(c)(1). Because ABC debt
collector neither knew nor should have
known that the debt was time barred,
ABC debt collector has not violated
§ 1006.26(c)(1). Several weeks later,
however, ABC debt collector learns that
the debt was, in fact, time barred when
ABC debt collector sent the validation
notice. Under § 1006.26(c)(2)(ii), ABC
debt collector must provide the
disclosures required by § 1006.26(c)(1)
in its next communication, if any, with
the consumer.
26(c)(3) Form and delivery of
disclosures.
26(c)(3)(i) In general.
1. Disclosures required by other
applicable law. Section 1006.26(c)(3)(i)
requires that, when provided on a
validation notice, the content, format,
and placement of the disclosures
required by § 1006.26(c)(1) must be
substantially similar to such disclosures
on Model Form B–4, B–5, B–6, or B–7
in appendix B of this part, as applicable.
A debt collector who uses a validation
notice that otherwise is substantially
similar to Model Form B–4, B–5, B–6, or
B–7, as applicable, may include any
additional disclosures required by other
applicable law on the reverse of the
validation notice and will continue to
be in compliance with the requirements
of § 1006.26(c)(1) and (3)(i). Disclosures
required by other applicable law may

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include, for example, a State law
requirement to disclose that a debt is
time barred or that a debt collector’s
right to bring a legal action on a timebarred debt can be revived. See
comments 26(c)(3)(ii)–2 and
34(d)(3)(iv)–1 for further guidance
concerning disclosures required by
other applicable law.
26(c)(3)(ii) Safe harbor.
1. Safe harbor provided by use of
model form. Although the use of Model
Form B–4, B–5, B–6, or B–7 in appendix
B of this part is not required, a debt
collector who uses the applicable model
form complies with the requirements of
§ 1006.26(c)(1) and (3)(i). For example,
if under applicable law only a payment
on a time-barred debt revives a debt
collector’s right to bring a legal action
against the consumer to collect the debt,
a debt collector who uses Model Form
B–6, which refers to payment but not
written acknowledgement, to provide
the disclosure on the validation notice
complies with the requirements of
§ 1006.26(c)(1) and (3)(i).
2. Disclosures required by other
applicable law. When providing the
disclosures required by § 1006.26(c)(1)
on a validation notice, a debt collector
who uses Model Form B–4, B–5, B–6, or
B–7 in appendix B of this part, as
applicable, may include any additional
disclosures required by other applicable
law on the reverse of the validation
notice and will continue to be in
compliance with the requirements of
§ 1006.26(c)(1) and (3)(i). See comments
26(c)(3)(i)–1 and 34(d)(3)(iv)–1 for
further guidance concerning disclosures
required by other applicable law.
26(c)(3)(iv) Translated disclosures.
1. Examples. Section 1006.26(c)(3)(iv)
provides that a debt collector must make
the disclosures required by

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§ 1006.26(c)(1) in the same language or
languages used for the rest of the
communication in which they are
conveyed. The following examples
illustrate the rule:
i. ABC debt collector is collecting
time-barred debt. ABC debt collector’s
initial communication with the
consumer takes place in Spanish. Under
§ 1006.26(c)(1), the initial
communication must contain the
disclosures described in that section, as
applicable. Under § 1006.26(c)(3)(iv),
ABC debt collector must provide the
disclosures in Spanish.
ii. XYZ debt collector is collecting a
time-barred debt. XYZ debt collector’s
initial communication with the
consumer takes place partly in English
and partly in Spanish. Under
§ 1006.26(c)(1), the initial
communication must contain the
disclosures described in that section, as
applicable. Under § 1006.26(c)(3)(iv),
XYZ debt collector must provide the
disclosures in both Spanish and
English.
2. Complete and accurate translation.
Under § 1006.26(e)(3)(iv), any
translation of the disclosures required
by § 1006.26(c)(1) must be complete and
accurate. The language of a disclosure
that a debt collector obtains from the
Bureau’s website is considered a
complete and accurate translation,
although debt collectors are permitted to
use other translations so long as they are
complete and accurate.
Dated: February 13, 2020.
Kathleen L. Kraninger,
Director, Bureau of Consumer Financial
Protection.
[FR Doc. 2020–03838 Filed 3–2–20; 8:45 am]
BILLING CODE 4810–AM–P

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