Mortgage

The CFPB rule offers tenants the precise to sue debt assortment businesses for evictions

WASHINGTON – The Consumer Financial Protection Bureau enacted a rule Monday that allows tenants to sue debt collection agencies who fail to disclose tenants' rights set in a recent federal eviction moratorium.

The Centers for Disease Control and Prevention announced last year they would freeze evictions due to the coronavirus pandemic. It prevents evictions in cases where tenants have submitted a written declaration of insolvency. A tenant who has not made such a declaration can still be evicted. The moratorium ends on June 30th.

The provisional regulation of the CFPB stipulates that debt collection agencies wishing to evict tenants must notify their rights from the CDC moratorium in writing. The rule also forbids debt collection agencies to misrepresent the tenants' authorization to protect against eviction.

"Nobody should be evicted from their home without understanding their rights, and we will hold debtors accountable who promote illegal evictions," CFPB Acting Director Dave Uejio said in a press release. "We encourage debt collection agencies to work with tenants and landlords to find solutions that work for everyone."

The CFPB rule makes it clear that debt collection agencies that do not inform tenants in writing of their rights under the CDC moratorium are violating the law on fair debt collection practices. The rule, which comes into force on May 3rd, applies to third-party debtors and lawyers acting on behalf of landlords.

On call with reporters, a senior Uejio advisor said there are "likely thousands" of tenants who have been evicted but could have stayed in their homes under the CDC moratorium.

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