On April 19, 2021, the CFPB issued an interim final rule (“rule”) aimed at preventing illegal evictions. This measure is intended to support an eviction moratorium issued by the Centers for Disease Control and Prevention (“CDC”), which prevents landlords from evicting tenants for failing to pay rent when the tenant is unable to afford full payments and would likely be driven into homelessness or a shared living setting by the eviction. The rule applies to debt collectors—as defined in the Fair Debt Collection Practices Act (“FDCPA”)—who are collecting debts for landlords. Under the rule’s terms, such collectors must disclose the existence of the CDC moratorium and may not misrepresent tenants’ eligibility for protection under the moratorium.
Dave Uejio, the Bureau’s Acting Director, explained the basis for the interim final rule: “With COVID-19 killing hundreds of Americans every day, kicking families out into the street during this pandemic may literally be a death sentence. No one should be evicted from their home without understanding their rights, and we will hold accountable those debt collectors who move forward with illegal evictions. We encourage debt collectors to work with tenants and landlords to find solutions that work for everyone.” In further support of the interim rule, the Bureau cites “CFPB analysis and other data” suggesting that “9 million households [are] at risk of eviction” (compared to a typical year where there are 900,000 evictions), evidence that “stopping evictions saves lives,” and data from a March CFPB report demonstrating that “evictions increase racial inequality.” In addition to the rule and related press release, the Bureau released sample disclosures illustrating the interim rule’s requirements and a set of Fast Facts about the rule.
The rule amends Regulation F, which implements the FDCPA, and takes effect on May 3, 2021. The CFPB is simultaneously soliciting public comment, which will be due 15 days after publication of the rule in the Federal Register. This interim rule comes in the wake of other CFPB measures intended to protect consumers during the COVID-19 pandemic and prevent them from losing their homes.
The rule was “issued … in support of the [CDC]’s eviction moratorium.” According to the Bureau, “the CDC order generally prohibits landlords from evicting tenants for non-payment of rent, if the tenant submits a written declaration that they are unable to afford full rental payments and would likely become homeless or have to move into a shared living setting” and “[t]his prohibition applies to an agent or attorney acting as a debt collector on behalf of a landlord or owner of the residential property.” The rule incorporates the CDC Order by reference and applies during the CDC Order’s effective period. Under the interim final rule, debt collectors “must provide tenants who may have rights under the CDC order with clear and conspicuous notice of those rights” and they “must provide [it] in writing.” The Bureau further wrote that “debt collectors who evict tenants who may have rights under the moratorium without providing notice of the moratorium or who misrepresent tenants’ rights under the moratorium can be prosecuted by federal agencies and state attorneys general for violations of the Fair Debt Collection Practices Act (FDCPA) and are also subject to private lawsuits by tenants.”
The rule comes two weeks after the Bureau proposed changes to mortgage servicing rules “intended to help prevent avoidable foreclosures” resulting from the “COVID-19 pandemic and ensuing economic crisis.” The Bureau also released a guide to COVID-19 financial relief earlier this month. Taken together, these efforts demonstrate that the Bureau is following through on its promise to seek to ameliorate consumer harm resulting from the COVID-19 pandemic, in line with one of the top policy priorities identified by Acting Director Uejio in his inaugural message to Bureau employees, shared with the public on the Bureau’s blog.