The new Consumer Financial Protection Bureau Pattern Validation Notice (MVN) formats required under Reg F are now available online through the Bureau.
Newly available alternative formats, in particular the Microsoft Word version, of the MVN are expected to facilitate the integration of the MVN into existing systems and make formatting changes and other permitted changes, such as optional disclosures, by then. Effective November 30 for Reg F. Additional MVN formats provided by CFPB are intended to facilitate compliance with Reg F.
As a reminder, highlights of the new rule on validation information and MVN include:
- The CFPB final debt collection rule imposes new validation notice requirements, which will be codified in 12 CFR 1006.34.
- The final rule provides a safe harbor for debt collectors using the MVN, which will be codified at 12 CFR 1006 Appendix B, Template Form B-1 (“Template Form for Notice of Validation”).
- Those using the MVN or a “substantially similar form,” as the rule allows, will fall under the protections of that safe harbor, although the contours of the “substantially similar” standard will likely be subject to litigation for those who choose. to make changes to the MVN not expressly addressed in the final rule.
- The section-by-section analysis of the CFPB notes in footnote 145 of the December 2020 rule, that the rule’s reference to “specified variants of the model notice” refers to “specifically listed versions of the rule. model notices that receive a safe harbor in accordance with [Section] 1006.34 (d) (2) (i) and (ii) (i.e. notices which are identical or substantially similar to the model notice but to: omit all or part of the optional disclosures that appear on the model notice; including optional disclosures that do not appear on the model notice; or including certain disclosures on a separate page, as permitted by 1006.34 (c) (2) (viii) and (5)) . “
Official Commentary 34 (d) (2) (iii) provides several examples of “permissible modifications” that will fall under the “substantially similar” standard, including:
Amendments to remove language that might suggest debt liability if that language is not applicable. For example, if a collection agent sends a validation notice to a person authorized to act on behalf of the deceased consumer’s estate (see comment 34 (a) (1) -1), and that person is not responsible for the debt, the debt collector may use the name of the deceased consumer instead of “you:”
Move consumer response information required by section 1006.34 (c) (4) to facilitate mailing;
- The addition of barcodes or QR codes, so long as the inclusion of such elements does not violate section 1006.38 (b);
- Addition of the generation date of the form; and
- Embed hyperlinks, if you are sending the form electronically.
- In response to comments from ACA International that the MVN would not work for certain types of debt, such as medical debt, the final rule states that the office has “changed the framework of the port security form template … flexibility customize validation information to suit their business practices and the types of receivables they collect.
- In response to ACA concerns about interest and charge disclosure disputes, the CFPB adopted a formal interpretation — comment 34 (c) (2) (ix-1) —that states that “the current amount of debt is the amount of debt debt as of the date the validation information is provided. This interpretation allows ACA members to meet the requirements of section 1006.34 (c) (2) (ix) without providing a dynamic balance or increasing disclosure of interest or charges.
- Official Commentary 104-1 states that “the FDCPA and the corresponding provisions of Regulation F do not cancel, modify, affect or exempt any person subject to these requirements from complying with a disclosure requirement under the applicable state law that describes additional protections. This comment goes on to state that “a disclosure required by state law is not inconsistent with the FDCPA or Regulation F if the disclosure describes a protection such law affords to any consumer that is greater than the protection provided by FDCPA or regulation F. ”
- The final rule does not adopt mandatory disclosures in Spanish or other foreign languages, although it does note that consumers with limited English proficiency may benefit from translated validation notices. The CFPB specifies, however, that debt collectors who provide “the optional disclosure described in § 1006.34 (d) (3) (vi) must honor a consumer’s request for a translated validation notice or risk violating the article 807 of the FDCPA.
Debt collectors using the MVN should be aware that it includes optional disclosures in Spanish, which the debt collector can remove without sacrificing the safe haven provided by the rule.
The ACA knows that its members have been working to update their policies and procedures to comply with the Reg F and is here to help with its ACA How: Reg F Implementation video series as well as a series of courses on hot topics on Reg F topics in September.
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