The Consumer Financial Protection Bureau on Friday proposed establishing a national standard for how debt collectors must inform borrowers when they cannot be sued for expired debt, Reuters reported. The proposed mandatory language would also inform borrowers about actions they could take to legally revive so-called “time-barred” debt, the agency said. The CFPB measure, which is subject to public consultation, comes amid a broader overhaul of its debt-collection rules. The changes have sparked industry complaints that they clash with state laws and could drastically complicate the process of recouping owed money. Last May, the CFPB proposed a rule clarifying the methods by which debt collectors can contact borrowers. It also proposed banning collectors from suing or threatening to sue borrowers for debt that the collector knows, or should know, has expired. The agency said on Friday that it had already received comments on the potential ban, but wanted more public input “as a part of the process of taking final action.” Under the Fair Debt Collection Practices Act (FDCPA), states can set limits on how long collectors have to sue, which can range from three to 15 years. Borrowers can still owe on debts older than that, but collectors cannot take them to court to collect on it.
