CFPB Moves Forward with Flawed Debt Collection Rules 

Nearly One-Third of U.S. Adults with a Credit Report Have Debt in Collection

WASHINGTON, D.C. – On Friday, July 30th, the Consumer Financial Protection Bureau (CFPB) announced that it would not delay the effective date of its debt collection regulations as it had originally proposed this spring. 

Instead, the CFPB will be moving forward with implementation of debt collection regulations containing many elements that will be harmful for consumers. 

“The CFPB indicated that it can still revisit the rules in the future, and we urge them to do so,” said National Consumer Law Center staff attorney April Kuehnhoff. “In the meantime, we call on states to enact additional protections to prevent vulnerable families still recovering from the pandemic from harassing and abusive debt collection practices.”  

Consumer advocates raised concerns about practices that may be allowed under the rules and urged the CFPB to address them. Concerning practices that might be allowed include:

  • Phone Calls. Collectors might harass consumers by making up to seven attempted calls per week per debt, either to the consumer or to friends and family to ask for the consumer’s contact information. A consumer with 5 medical accounts in collection could receive 35 attempted calls per week. 
  • Electronic Communications without Consumer Consent. Collectors can use electronic communications to contact consumers unless the consumer opts out. Requiring an opt-out rather than requiring collectors to obtain consumer consent is more likely to result in missed messages – including critical required disclosures – if collectors use old contact information or communications are sent to spam. Privacy may also be violated if messages are viewed by others, including employers. Procedures to reduce third-party disclosures are currently optional for debt collectors. 
  • Oral Collection Notices. The CFPB has said that collectors can provide required collection disclosure notices orally despite the increased amount of information required in the notice under the regulations. This will make it difficult for consumers to understand or remember important disclosures about the alleged debts and their debt collection rights. 
  • Time-Barred Debt Collection. Collectors can still pressure consumers to pay debts that are beyond the statute of limitations. They are prohibited from suing or threatening to sue on time-barred consumer debts, but they can pressure people to make payments using tactics that are likely to confuse people, and collectors may still be able to sue if a consumer inadvertently revives the statute of limitations through a partial payment or acknowledgment made after pressure from collectors. 

The debt collection rule will impact at least 68 million people in the United States. The Urban Institute has documented that, during the COVID-19 pandemic, 29% of adults in the United States with credit reports have debt in collection. That number goes up to 39% for those residing in communities of color. 

Related Links

  • NCLC’s Debt Collection Rulemaking at the CFPB webpage
  • Group comments supporting CFPB’s Proposed 60-day Delay in Finalizing Debt Collection Regulations, May 19, 2021
  • Letter to CFPB Acting Director Uejio re: Additional Modifications to Debt Collection Rule to Better Protect Consumers, Mar. 3, 2021
  • Letter to CFPB Acting Director Uejio re: Non-Regulatory Actions Needed on Debt Collection, Feb. 1, 2021

Using Consumer Laws to Protect Workers from Corporate Fraud and Misconduct

July 28, 2021

Hosted by the Economic Policy Institute, Harvard Labor and Worklife Program, National Consumer Law Center, and Towards Justice, this webinar provides a lively discussion among advocates, attorneys, academics, and current and former government officials about how consumer laws can be used to protect workers and address corporate abuse in the labor market. Often, workers are exploited in ways that can be addressed through both consumer and workplace laws – or in ways that fall in the cracks between the two:

  • A janitorial company sells franchises to workers, with unfair and fraudulent terms under which no one can make a profit;
  • A trucking company provides training for drivers, while also roping them into lease-to-own contracts requiring excessive repayment if the driver leaves the job;
  • A gig company conceals from workers information about pricing and jobs; or
  • An app-based delivery company promises workers their tips, or represents to customers that tips will go to workers – but instead keeps some or all gratuities for its own use.

Government agencies and worker/consumer advocates alike have begun to rely on laws traditionally used to protect consumers as a way of addressing unfair and deceptive labor market practices that target working people, often immigrants and people of color. (Here’s a blog post on the topic that provides more background.)


Veena Dubal, University of California Hastings College of Law
Seth Frotman, Student Borower Protection Center
Terri Gerstein, Worklife Program, Economic Policy Institute
Patricio Marquez, Washington State Attorney General’s Office
Lorelei Salas, Open Society Foundations Leadership in Government Fellow
Hillary Schwab, Fair Work, P.C.
David Seligman, Towards Justice


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​NCLC ​Advocates Applaud 36% National Rate Cap Bill  to Curb High-Cost, Predatory Loans Across the Nation

National Consumer Law Center contact: Jan Kruse (jkruse@nclc.org)

Washington, D.C. – Attorneys at the National Consumer Law Center praised the introduction yesterday of the Veterans and Consumers Fair Credit Act in the U.S. Senate, led by U.S. Senators Jack Reed (D-RI), Jeff Merkley (D-OR), Sherrod Brown (D-OH), and Chris Van Hollen (D-MD), along with seven other original co-sponsors.

“Interest rate limits are the simplest, most effective way to stop predatory lending and to ensure that lenders make responsible loans that people can afford to repay without getting caught in a debt trap,” said National Consumer Law Center Associate Director Lauren Saunders.  “A national 36% interest rate cap that covers all lenders, including banks, and all borrowers, including veterans and other consumers, will prevent predatory lenders from evading state interest rate limits and give everyone the same protections that our active military families already enjoy. The 36% interest rate limit is the broadly accepted dividing line between responsible lending and destructive credit that harms lives and destroys financial inclusion.”

The Veterans and Consumers Fair Credit Act would eliminate high-cost, predatory payday loans, auto-title loans, and similar forms of toxic credit across the nation by:

  • Establishing a simple, common sense limit that is broadly supported by the public on a bipartisan basis.
  • Preventing hidden fees and loopholes.
  • Simplifying compliance by adopting a standard that lenders already understand and use.
  • Upholding the ability of states to adopt stronger protections as needed, such as lower rates for larger loans.

The Veterans and Consumers Fair Credit Act extends the federal Military Lending Act’s (MLA) 36% interest rate cap on consumer loans to all Americans, including veterans and Gold Star Families

Polling data show that voters across the political spectrum strongly support interest rate limits. Many states already have a reasonable rate cap. For example, in November 2020, 83% of Nebraska voters approved a 36% interest rate limit. Similar strong bipartisan majorities of voters or legislatures in recent years have approved 36% or lower rate caps in many other states, including Arkansas, Arizona, Illinois, Colorado, Montana, and Ohio, but some lenders are evading those laws through rent-a-bank schemes. Currently, 32 states and the District of Columbia impose an interest rate limit of 36% or less on a $2,000, 2-year installment loan, though some have loopholes for short-term payday loans or other types of loans.

Related NCLC Resources
> Why 36%? The History, Use, and Purpose of the 36% Interest Rate Cap, April 2013
> State Rate Caps for $500 and $2,000 Loans, March 2021
> After Payday Loans: How Do Consumers Fare When States Restrict High Cost Loans?, October 2018

Approaching Consumer Work with a Racial Justice Lens: Session 3

July 27, 2021

Understanding history is crucial to appreciating how racism permeates our work. During this session advocates will discuss how specific regional histories of indigenous oppression in New Mexico and sharecropping in Mississippi have informed their understanding of the predatory pay day lending landscape in their state. Contextualizing pay day lending in this way surfaced new issues and presented different approaches in two unique communities within different political environments.


Lindsay Cutler, New Mexico Center on Law and Poverty
Charles Lee, Mississippi Center for Justice


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Additional Resource: Race Equity at the Core of Consumer Law Report

TransUnion v. Ramirez: Part 2

July 21, 2021

NCLC is proud to partner with the National Association of Consumer Advocates (NACA) and Public Justice to host the following webinars for legal aid, government, and non-profit lawyers, and private attorneys who are NACA or Public Justice members. In this series, you will learn how the Ramirez decision alters the approach to standing established by the Supreme Court in Spokeo, and how to select and plead cases to establish standing in FCRA cases after Ramirez.


James Francis, Francis Mailman Soumilas
Cassandra P. Miller, Edelman Combs Latturner & Goodwin
Dick Rubin, Gupta Wessler
April Kuehnhoff, Staff Attorney at the National Consumer Law Center


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TransUnion v. Ramirez: Part 1

July 15, 2021

NCLC is proud to partner with the National Association of Consumer Advocates (NACA) and Public Justice to host the following webinars for legal aid, government, and non-profit lawyers, and private attorneys who are NACA or Public Justice members. In this series, you will learn how the Ramirez decision alters the approach to standing established by the Supreme Court in Spokeo, and how to select and plead cases to establish standing in FCRA cases after Ramirez.


Lauren KW Brennan, Francis Mailman Soumilas
E. Michelle Drake, Berger Montague
John Soumilas, Francis Mailman Soumilas
Ariel Nelson, Staff Attorney at the National Consumer Law Center


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Approaching Consumer Work with a Racial Justice Lens: Session 2

July 20, 2021

Promoting racial justice in consumer advocacy may require organizational realignment and forging closer partnerships with community. Join this session to hear from both advocates and community members about how Legal Aid of Arkansas changed their approach to consumer advocacy to better support a vibrant community of Marshallese in-migrants being targeted by predatory consumer practices.


Eldon Alik, Marshallese Consulate
Melisa Laelan, Arkansas Coalition of Marshallese
Susan Purtle, Legal Aid of Arkansas
Mallory Sanders, Legal Aid of Arkansas


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Additional Resource: Race Equity at the Core of Consumer Law Report

TransUnion L.L.C. v. Ramirez

On June 25, 2021 in TransUnion L.L.C. v. Ramirez, 2021 WL 2599472 (U.S. June 25, 2021) the Supreme Court issued a 5-4 decision addressing whether consumers suffered concrete harm due to violations of the Fair Credit Reporting Act (FCRA), including inaccurate credit reports, that met the requirement for Article III standing. Ramirez follows up on the Court’s 2016 decision in Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016), which also addressed FCRA violations. These decisions control standing in federal court generally.

This webpage provides resources to consumer attorneys and will be updated as more materials become available. Please email ramirez@nclc.org with any submissions of relevant materials.

Sample Ramirez Briefing

  • Maddox v. The Bank of New York Mellon Trust Co., 997 F.3d 436 (2d Cir. 2021) (Supplemental Ramirez Briefing). Class action seeking penalties authorized by state statute for untimely filing mortgage loan satisfactions of record. Includes argument of analogue to common law defamation of title.
  • TeWinkle v. Capital One, N.A., Case No. 20-2049 (2d Cir. 2021) (Supplemental Ramirez Briefing). Claim under ECOA. Includes argument of analogue to common law duty of good faith and fair dealing in contracts.

Articles Discussing Case Development

Additional Resources

Standing Discussions found in NCLC Treatises (Subscription Required)

Links are to the existing sections of books in NCLC’s Consumer Law Practice Series. NCLC treatises discussing standing. Discussions of Ramirez and cases interpreting Ramirez will be added.

The treatises in the Consumer Law Practice Series cover every facet of consumer law, and are available in print and continuously updated digital format. Learn more at www.nclc.org/library.

Bipartisan Legislation in Congress Would Ban Forced Arbitration Clauses that Protect Sexual Predators

National Consumer Law Center contacts: Jan Kruse (jkruse@nclc.org) or Lauren Saunders (lsaunders@nclc.org)

Washington, D.C. – Advocates at the National Consumer Law Center applauded bipartisan and bicameral legislation announced yesterday by U.S. Senator Kirsten Gillibrand (D-NY),  Senator Lindsey Graham (R-SC) and Dick Durbin (D-IL), chair of the Senate Judiciary Committee, along with U.S. Representatives Cheri Bustos (D-IL), Morgan Griffith (R-VA) and Pramila Jayapal (D-WA). The legislation would restore access to justice and help prevent sexual harassment and assault in the workplace, at nursing homes, and in other settings. The Ending Forced Arbitration of Sexual Harassment Act would void forced arbitration provisions as they apply to sexual assault and harassment survivors, allowing survivors to seek justice, discuss their cases publicly, and eliminate institutional protection for harassers.

“We applaud this bipartisan effort to ban forced arbitration clauses that protect sexual predators and shield them from justice. Forced arbitration is a get-out-of-jail card for sexual predators and others that denies survivors’ right to their day in court,” said National Consumer Law Center Associate Director Lauren Saunders.

Sexual harassment of former Fox News anchor Gretchen Carlson and widespread sexual harassment of Kay Jewelers employees show how forced arbitration clauses help companies hide illegal conduct and avoid accountability for their wrongdoing,” explained Saunders. “Much of the evidence of apparent rampant sexual abuse of female Kay Jewelers employees was kept from the public, and even other victims, through the gag orders imposed in forced arbitration.”

New D.C. Study Shows How Arrearage Management Programs Are a Win-Win for Companies and Customers Alike

COVID and Utility Arrearages

The COVID-19 pandemic has brought into sharp focus the fact that millions of Americans cannot afford the bills for utility service that keep the lights on, the food in the refrigerator cold, the air conditioning running in the summer, and the heating system running in the winter.  In order to protect public health, states around the country passed moratoriums on utility terminations.  According to the National Energy Directors Association, about three dozen states had mandatory termination moratoriums for at least some period of time in 2020.  Those moratoriums varied in their duration and the types of utility service covered (e.g., electricity, gas, water), but all of them implicitly recognized a truth noted in 1978 by the Supreme Court of the United States: “Utility service is a necessity of modern life; indeed, the discontinuance of water or heating for even short periods of time may threaten health and safety.” (Memphis Light, Gas & Water Div. v. Craft, 436 U.S. 1, 18).

As the pandemic approaches the 18-month mark, only a small handful of states still have a mandatory moratorium in place.  For example, on June 24, California extended its moratorium on electricity and gas terminations through September 30, 2021.  Other states with moratoriums that extend beyond the end of July include Arizona (October 15), Maryland (November 1), New Mexico (August 12), New Jersey (December 31), and Washington (September 30).   But the underlying problem remains: far too many families cannot afford essential utility service and will face service termination unless other policies are in place to protect them.

Policies to Help Financially Struggling Customers

There are a variety of existing policies that states have adopted to minimize the likelihood that vulnerable households will lose utility service simply because those bills are unaffordable, including:

Many states require their utilities to invest in energy efficiency measures, often with a focus on serving lower income customers, in order to reduce consumption, make the bills more affordable, and reduce greenhouse gas emissions.

► Many states also have adopted discounted rates for low-income customers —which can be offered as a flat discount for all income-eligible customers, or as tiered discounts which provide sliding discounts that increase as income decreases — and Percentage of Income Payment Plans, under which the amount the customer pays is set at an affordable percentage of the customer’s income, e.g., 6%.

►Yet another approach is for a utility to offer financially struggling customers an Arrearage Management Program, or AMP.  The basic AMP model requires the customer in arrears simply to pay the ongoing bills as they come due, with the amount in arrears held in abeyance.  The company rewards the customer for each timely monthly payment by reducing the arrearage by a specified amount, usually 1/12 of the full arrearage amount.  Thus, a customer on an AMP can reduce the arrearage to zero by making 12 timely payments of monthly bills.  (See NCLC’s report on AMPs).

AMPs, which are offered in about 10 states, recently expanded to two new jurisdictions, California and the District of Columbia.  A recent report on the D.C. program demonstrates how AMPs can not only help struggling customers avoid termination of their utility service but also help companies successfully collect revenues in a more humane way.

D.C. AMP Reports Good Results for Customer and Company Alike

In June 2017, the D.C. Public Service Commission approved the adoption of an AMP that NCLC had first advocated in Commission proceedings regarding the merger of utility companies Pepco and Exelon. D.C. PSC Order No. 18799 in Formal Case 1119.  After protracted multi-party discussions over program design, Pepco began enrolling recipients in October 2019; by May 2020, 107 participants were enrolled.  Before the program launched, Pepco retained the nonprofit research institute APPRISE to carefully monitor implementation and prepare periodic evaluations.  The first evaluation report was filed with the Commission on May 24, 2021.

The APPRISE evaluation considers the AMP to be a success and recommends that it continue and be expanded to more customers. While the AMP participants had exceedingly low household income — $15,653 on average —  90% of the participants noted that they were trying harder to pay their bills, 83% said that the AMP made it easier to pay their bills, and the data showed that these customers measurably increased their “bill coverage ratio” (the percent of billed amounts actually paid) compared to a control group of equally poor customers.  Twenty-six percent (26%) of those who enrolled in the AMP had been shut-off at the time they enrolled, yet 93% of those enrollees were still in the program as of August 2020.  Thus, the AMP program took a cohort of very low-income customers who struggled to afford their utility bills, including many who had service terminated, and supported the customers’ efforts to make more consistent payments and stay connected to their utilities.  Moreover, the very structure of the AMP —  where the company reduces the arrearage balance every time a monthly bill is promptly paid —  resulted in participants significantly reducing their arrearages.  APPRISE’s twelve-month review showed that while AMP participants started with an average arrearage of $1,451, they reduced that by $897 over the course of 12 months, ending with an average arrearage of $554.

As Penni Conner, a senior vice-president at Eversource (a major electric and gas utility in the Northeast) and a strong AMP supporter, noted in an article promoting AMPs, they are a “win-win” for customers and companies alike.  Participating customers avoid termination and see their arrearages decline; other ratepayers benefit from more frequent payments by the participating customers; and companies have a new, more humane and effective tool in working with payment-troubled customers.

The National Consumer Law Center will gladly work with any advocates who are interested in seeking to have an AMP adopted in their state.  Contact Charlie Harak at charak@nclc.org.