The Consumer Financial Protection Bureau (CFPB) has issued an interim final rule in support of the Centers for Disease Control and Prevention (CDC)’s eviction moratorium. The CFPB’s rule requires debt collectors to provide written notice to tenants of their rights under the eviction moratorium, and prohibits debt collectors from misrepresenting tenants’ eligibility for protection from eviction under the moratorium.
A temporary eviction moratorium ordered by the CDC has been extended through June 30, 2021. 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. This prohibition applies to an agent or attorney acting as a debt collector on behalf of a landlord or owner of the residential property.
According to the CFPB, in December of 2020 about 18% of renter households were behind on their rent, meaning nearly nine million households were at risk of eviction. In a typical year, there are about 900,000 evictions nationwide. Of those nearly nine million households behind on rent, tens of thousands of renters are being evicted weekly, often without being told of their rights under the CDC moratorium. As the CDC has found, tenants who are evicted may end up homeless or in crowded or shared living settings, thus increasing their chances of contracting COVID-19.
The CDC established the eviction moratorium to protect the public health and reduce the spread of COVID-19. 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.
“With COVID-19 killing hundreds of Americans every day, kicking families out into the street during this pandemic may literally be a death sentence,” said CFPB Acting Director Dave Uejio. “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.”
Under the FDCPA interim final rule, debt collectors, including attorneys, seeking to evict tenants for non-payment of rent must provide tenants who may have rights under the CDC order with clear and conspicuous written notice of those rights. The notice must be provided on the same date as the eviction notice, or, if no eviction notice is required by law, on the date that the eviction action is filed.
With the deadline for the foreclosure moratorium inching closer, the CFPB recently proposed changes to help prevent impending foreclosure actions, as the emergency federal foreclosure protections are set to expire come June 30, 2021. Given the urgency of the pandemic crisis, the Interim Final Rule will take effect on May 3, 2021. The CFPB believes this will give debt collectors time to come into full compliance. Debt collectors may begin complying with the rule before the compliance date.
At the upcoming 2021 Single-Family Rental Summit, presented by The Five Star Institute, set for Wednesday, May 12 at the Four Seasons Resort and Club in Irving, Texas, top subject matter experts and skilled single-family rental practitioners will lead discussion panels and training sessions. The 2021 SFRS will answer questions and offer viable solutions related to property acquisition and management, financing, strategies for small, midcap, and large investors, and new developments related to technology and professional services.
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