CFPB Issues Advisory Opinion on FDCPA Compliance for Medical Debt

Regulatory Developments

CFPB Issues Advisory Opinion on FDCPA Compliance for Medical Debt
On October 1, the CFPB issued an advisory opinion reminding debt collectors of their obligation to comply with the FDCPA and Regulation F’s prohibition of false, deceptive, or misleading representations or practices when collecting on medical debt. The CFPB noted that medical providers are increasingly outsourcing collection to third-party collectors who do not have access to the providers’ payment and billing data, increasing the likelihood of inaccuracies in the collection process. The CFPB advises debt collectors that they are strictly liable under the FDCPA and Regulation F for misrepresenting a consumer’s legal obligations or collecting on: (1) payments already made, including those by insurance or government programs; (2) amounts not owed or above what can be charged under state or federal laws; (3) services the consumer did not receive; or (4) bills that the debt collector cannot substantiate with corroborating information, such as payment records.

CFPB Reports on Challenges Facing Servicemembers and Veterans with Student Loans
On September 24, the CFPB released its annual report on the top financial concerns facing servicemembers, veterans, and military families in 2023. The CFPB saw an increase in complaints by servicemembers across all major products (credit reporting, debt collection, credit cards, etc.), up 98% from 2021 and 27% from 2022. In particular, servicemembers reported problems with student loan servicers, including challenges contacting or getting help from student loan servicers and receiving incorrect calculations of payments due under income-driven repayment plans. Servicemembers also reported colleges and universities withholding official academic records due to unpaid loans. The CFPB also noted an increase in complaints from older veterans who were the target of fraud and scams.

CFPB Releases Chart for Determining Whether to Register an Order Under the CFPB’s Nonbank Registration Regulation
On October 3, the CFPB released a chart that summarizes how an entity may determine if it is required to register an order under the CFPB’s Nonbank Registration Regulation. Additional resources to assist with an entity’s compliance with the regulation are available here. The registration submission period for larger participant CFPB-supervised covered nonbanks begins on October 16, 2024 and extends through January 14, 2025.

Federal and State Bank Regulators Issue Interagency Statement on Supervisory Practices Regarding Financial Institutions Affected by Hurricane Helene
On October 2, in the wake of Hurricane Helene, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, the National Credit Union Administration, the Office of the Comptroller of the Currency, and state financial regulators (collectively, Agencies) issued a statement (Statement) outlining supervisory practices that the Agencies intend to observe with respect to institutions operating in affected areas, including specifically with respect to lending, temporary facilities, publishing requirements, regulatory reporting requirements, the Community Reinvestment Act, and investments. The Statement includes links to resources offered by each Agency to financial institutions operating in areas affected by a major disaster.

Check Out Goodwin's Latest Industry Insights

New Client Alert: SEC Rulemaking Returns After Quiet Stretch: Assessing the SEC “Reg. Flex” Agenda for BDs and Exchanges
In July 2024, the federal Office of Information and Regulatory Affairs, or “OIRA,” published the SEC’s Spring 2024 “Reg. Flex” agenda. Under Chair Gensler, the SEC has already adopted 40+ final rulemakings, has formally proposed an additional dozen-plus rulemakings that it expects to adopt soon, and plans on proposing more than a dozen fresh proposals on top of that. The 70+ total rulemakings targeted by Chair Gensler compares to a total of 43 adopted rulemakings under prior Chair Clayton and 22 adopted rulemakings under former Chair White. The anticipated dates in the agenda are merely projections, and it is possible that some of these rulemakings will not proceed. However, with the election approaching, the Chair’s sense of urgency must be high, which is only one of several reasons why the agency’s rulemaking schedule has returned after a significant lull the past several months. To read the full alert, click here.

New Client Alert: A New Safeguarding Regime: Five Points for Payments and E-money Firms
For any UK fintech business involved with payments of electronic money (e-money) and any (experienced) investor in these businesses, safeguarding client funds is a key regulatory issue. The Financial Conduct Authority (FCA) consultation on changes to the safeguarding rules for FCA-authorised payments and e-money firms, “CP24/20: Changes to the safeguarding regime for payments and e-money firms” (Consultation), is therefore noteworthy. To read the full alert, click here.

New Fintech Flash: Double Clicking on Innovation in Consumer Finance: Responsible Use of AI
Artificial intelligence (AI) is becoming ubiquitous across sectors, and the financial services industry is no exception. With the rise of AI, there is also an increase in scrutiny by regulators over its use. This Fintech Flash addresses, and provides recommendations regarding, the responsible use of AI in credit underwriting, marketing, and “chatbots.” To read the full flash, click here.

Upcoming Event: Goodwin & Wells Fargo Host a Tea Party During Boston Fintech Week
Please join Goodwin and Wells Fargo as they “spill the tea” in a discussion about enterprise partnerships and partnership readiness on October 16th from 2:30 - 4:30 PM during Boston Fintech Week. For more information and to RSVP, click here.

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