New Rule Requires Notifying Residents Being Evicted
On April 19, the Consumer Financial Protection Bureau (CFPB) issued an interim final rule requiring “debt collectors” to provide written notice to renters of their rights under the CDC’s eviction moratorium order and prohibiting "debt collectors" from misrepresenting renters’ eligibility for protection from eviction under the moratorium. The rule will go into effect on May 3 and last through the duration of the CDC Order, which was recently extended through June 30, 2021.
To understand whether the rule applies to you, it is important to note the CFPB’s definition of “debt collector,” derived from the Fair Debt Collection Practices Act (FDCPA). According to the CFPB, under the FDCPA:
[The interim final rule requirement] may include lawyers who represent landlords or property managers in eviction court to collect unpaid rent, if they start collecting the debt for [a renter’s] landlord after [renters] fall behind on [their] payments.
We understand that there are other considerations as well, including relevant case law that may be more conclusive about whether property managers or management firms are categorized as “debt collectors,” and whether state eviction laws and court processes separate the process to recover possession from actions to cover outstanding rent debt.
We highly encourage all NAA members to seek the advice of a local attorney before proceeding with an eviction to understand whether CFPB’s rule applies.
As an added protection, we suggest all members consider adding the CFPB’s sample disclosure language to your eviction notice. For NAA members who participate in NAA Click & Lease, we are adding a form that contains similar disclosure language for users. Additional resources and compliance training are forthcoming, as well.
CFPB’s Sample Language:
The CFPB’s rule is an unfortunate expansion of the CDC’s Order, and we are continuing conversations with the Administration and federal agency officials about the ongoing challenges that rental housing providers face while the CDC Order and related federal requirements remain in place. In addition to being bad public policy, these efforts make compliance difficult in an area where there is already an abundance and patchwork of legal requirements complicating the CDC’s Order. This interim final ruling only adds to the confusion as federal, state and local eviction moratoria are being applied very differently in courts across the country.
It is time to end federal efforts that interfere with the eviction process. NAA will continue combating these policies and shift focus to the distribution of the almost $50 billion of federal rental assistance.