Recently, a debt collector filed a complaint against the CFPB and Director Rohit Chopra, in the U.S. District Court for the District of Columbia, challenging the Bureau’s new debt collection advisory opinion. The plaintiff took issue with the CFPB’s advisory opinion, issued on October 1 (covered by InfoBytes here), which the complaint described as creating new substantive obligation and requirements for debt collectors to substantiate medical debts prior to collection (“New Substantiation Rule”). The plaintiff contended this rulemaking was issued without adhering to the procedural requirements mandated by the APA — specifically the notice-and-comment period.
The complaint asserted the New Substantiation Rule was a legislative rule rather than an interpretive one, as it imposed “significant and substantive new requirements on medical debt collectors.” The plaintiff argued the CFPB’s failure to follow the APA’s notice-and-comment process renders the rule invalid. The plaintiff further alleged that the rule contradicts existing law under the FDCPA, which would not require debt collectors to independently investigate and substantiate debts before attempting to collect them.
The plaintiff seeks a declaration that the New Substantiation Rule is invalid due to the CFPB’s non-compliance with the APA’s procedural requirements. Additionally, the plaintiff requests an injunction to set aside the rule, along with the recovery of attorneys’ fees and costs incurred in relation to the case.
