NARRATOR (00:00): Welcome to module 2 on credit and housing rights. This module is part of a series called Helping Clients Explore Their Personal Finance Rights from the Consumer Financial Protection Bureau. This presentation is being made by a Consumer Financial Protection Bureau representative on behalf of the Bureau. It does not constitute legal interpretation, guidance, or advice of the Consumer Financial Protection Bureau. Any opinions or views stated by the presenter are the presenter's own and may not represent the Bureau's views. NARRATOR (00:35): The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. CFPB FinEx is a place where financial educators, practitioners, counselors, researchers, and others can share information and best practices, learn from one another, advance their work, and see what CFPB is doing to help consumers. NARRATOR (01:08): Welcome to module 2 on credit and housing rights. This module is part of a series designed to help you, as a practitioner, help your clients learn about their rights. After watching this module, check out the other two modules in the series to learn more. NARRATOR (01:24): In module 2, we will learn about consumer rights related to credit cards, debt collection, and housing, partner with clients facing eviction, and explore additional resources to help you in your work. DAVID (01:38): Hi again. As I work with clients, they have been asking me more questions about consumer rights related to credit cards, payday loans, and housing. We will start by learning about credit card rights. A client I'm working with told me their credit card company changed their interest rate. The client wanted to know if that was allowed. Let's get started. DAVID (02:00): I learned that a credit card company can change the terms of a credit card agreement. For significant changes, the card issuer must give the person notice 45 days in advance. Significant changes generally include: certain interest rates and fees, increases to the minimum amount due, or changes to the grace period or the way interest is calculated. Consumers have the right to opt out of the newly changed terms, but if they do, the credit card company might close their account. DAVID (02:30): I also learned that there are times when a card issuer can increase an interest rate on an existing balance. For example, if a person is 60 days late paying their required minimum amount. DAVID (02:43): Another client got a notice that their credit card will now be owned by a new credit card company. I learned that most card holder agreements allow the credit card company to sell their accounts to another company. When that happens, the new card company will mail a person a new card, and often a new account number. Consumers also have rights under the Equal Credit Opportunity Act. As a reminder, the Equal Credit Opportunity Act bars discrimination based on race, color, age, sex, including sexual orientation and gender identity, religion, national origin, marital status, receiving money from any public assistance program, and exercising their rights under certain consumer protection laws when deciding the terms, like interest rate or credit limit, or in any other aspect of a credit transaction. DAVID (03:34): The Equal Credit Opportunity Act was covered in depth in module 1. Revisit that module to learn more. DAVID (03:41): I'm going to share with clients how to visit consumerfinance.gov and explore consumer rights by money topic. DAVID (03:48): Let's learn about payday loan rights and other consumer rights. NARRATOR (03:53): A payday lender can only garnish a person's wages if it has a court order resulting from a lawsuit. If a person doesn't repay their loan, the payday lender or a debt collector generally can sue them to collect. If the lender wins, or if the borrower does not dispute the lawsuit or claim, the court will enter an order or judgment against the borrower. The order or judgment will state the amount of money the person owes. The lender or collector can then get a garnishment order against the borrower. NARRATOR (04:25): Borrowers may be worried about arrests, but a person cannot be arrested for defaulting on a payday loan. However, if a person is sued or a court judgment has been entered against them and they ignore a court order to appear, a judge may issue a warrant for their arrest. For that reason, a person should never ignore a court order. A lender can't threaten to have a person arrested. If this happens, a person should report the lender's threat to their state Attorney General. They can also submit a complaint with the Consumer Financial Protection Bureau. NARRATOR (05:01): The Fair Debt Collection Practices Act, FDCPA, is a federal law that provides limitations on what debt collectors can do when collecting certain types of debt. The FDCPA covers the collection of mortgages, credit cards, medical debts, and other debts mainly for personal, family, or household purposes. Debt collectors, including lawyers who collect rent for landlords, must now follow the Fair Debt Collection Practices Act. NARRATOR (05:30): Under the FDCPA, there are restrictions on communication. Consumers have the right to report collectors that violate restrictions related to time and place. Debt collectors cannot contact a person at an unusual time or place, or at a time or place the collector knows is inconvenient for the person. Collectors generally cannot contact a person before 8:00 AM or after 9:00 PM. Harassment. Debt collectors cannot harass a person over the phone or through any other form of contact. And representation by attorney. If the debt collectors know that the consumers being represented by an attorney, they must stop contacting the person and must contact the attorney instead. NARRATOR (06:18): A debt collector has to share certain information with the consumer, including the name of the creditor and amount owed. That the debt can be disputed. That if the consumer doesn't dispute the debt within 30 days, the debt collector will assume the debt is valid. That if the consumer disputes the debt in writing within 30 days, the debt collector will provide verification of the debt. That if the consumer requests the name and address of the original creditor within 30 days, if different from the current creditor, the debt collector will provide that information. If the debt collector doesn't provide the above information in the initial contact with a person, the debt collector is required to send them a written notice, including that information, within five days of the initial contact. NARRATOR (07:06): The CFPB debt collection rule helps ensure consumers get information through a debt collection validation notice and protects consumers in four other ways. Let's take a look. NARRATOR (07:19): The Fair Debt Collection Practices Act makes it illegal for debt collectors to harass or threaten a person when trying to collect on a debt. In addition, CFPB's debt collection rule clarifies how debt collectors can communicate with a person. NARRATOR (07:35): There are five key things to know about the CFPB's debt collection rule. First, a debt collection validation notice includes details clients may need to know and can be provided in writing or electronically. NARRATOR (07:49): Second, a debt collector is now assumed to violate the Fair Debt Collection Practices Act if they contact a person by telephone more than seven times in seven days or within seven days after having had a telephone conversation with the person in connection with the collection of the debt. A debt collector also must not contact a person at unusual times or places. NARRATOR (08:13): Third, a debt collector must speak to a person by telephone or in person about a debt or mail a letter or send an electronic communication before reporting a debt to a credit reporting company. NARRATOR (08:26): Fourth, if a debt collector contacts a person using social media, they must keep the messages private, identify themselves as a debt collector, and provide a way for the person to opt out of their communication. NARRATOR (08:40): Last, a limited content message is a type of voicemail that a debt collector may leave. Limited content messages must include certain information. To learn more about the CFPB debt rule, explore the source listed on the slide. NARRATOR (08:56): Knowledge check. Borrowers must be told the name of the creditor and the amount they owe when they are contacted by a debt collector. True or false? NARRATOR (09:08): If you said true, you are correct. A debt collector has to share certain information, including the name of the creditor, the amount owed, and that the debt can be disputed. NARRATOR (09:20): Service members have additional rights. The Military Lending Act, MLA, applies to active-duty servicemembers, including those on active Guard or active Reserve duty, and their covered dependents. NARRATOR (09:33): Rights under the MLA include a 36% interest rate cap. This means a service member can't be charged more than the 36% Military Annual Percentage Rate (MAPR) which includes the following costs with some exceptions: finance charges, credit insurance premiums or fees, add-on products sold in connection with the credit, and other fees, like application or participation fees with some exceptions. Additional rights include: no mandatory waivers of consumer protection laws, no mandatory allotments, and no pre-payment penalty. NARRATOR (10:12): A creditor can't require a service member to submit a mandatory arbitration or give up certain rights they have under state or federal laws like the Servicemember's Civil Relief Act. A creditor can't require a service member to create a voluntary military allotment in order to get the loan. NARRATOR (10:30): An allotment is an automatic amount of money taken from a person's paycheck to pay back their loan. And a creditor can't charge a penalty if a service member pays back part or all of the loan early. DAVID (10:44): Clients have also been asking questions about housing. Whether they are owners or renters, they have questions about mortgages, foreclosure, or eviction rights. DAVID (10:55): Jane is a long-term client. She recently called because she is facing eviction. I want to learn more about housing rights for both homeowners and renters. Let's take a look. DAVID (11:07): Mortgage borrowers have a variety of rights. The Equal Credit Opportunity Act prevents discrimination. The Truth-in-Lending Act requires lenders to provide loan estimates and Closing Disclosures. The Home Mortgage Disclosure Act requires certain institutions to collect, report, and disclose their mortgage lending activity. DAVID (11:27): I share basic information with clients on mortgage rights, but I also refer clients to HUD certified housing counselors and the CFPB's buying a house page that has tools and resources for homebuyers. NARRATOR (11:41): Foreclosure happens when the lender takes back property after the homeowner fails to make payments on a mortgage. Foreclosure processes differ by state. There are generally two processes. Judicial foreclosure. This requires that the process go through a court where the borrower can raise defenses. And non-judicial foreclosure. This is done without filing a court action and is carried out by a series of steps, including written notices. NARRATOR (12:11): Foreclosure processes require that borrowers be notified regarding the proceedings and generally involve giving public notice. If a person is having trouble paying their mortgage, they can call the Hope Hotline. It is open 24 hours a day, seven days a week. The hotline offers personalized advice from housing counseling agencies approved by the US Department of Housing and Urban Development (HUD). DAVID (12:37): I'm going to send all clients with mortgages information about Hope Hotline so that they know about the resource. Now I want to learn more about eviction so I can provide Jane with information. DAVID (12:50): Remember, the Fair Debt Collection Practices Act says that debt collectors can't harass someone or use misleading statements to collect a debt. The Fair Debt Collection Practices Act applies to many lawyers who regularly collect debt, including those who represent landlords or property managers in eviction court to collect unpaid rent. DAVID (13:12): As debt collectors, these lawyers can violate the Fair Debt Collections Practices Act if they make false or misleading statements in order to collect rent. DAVID (13:21): If a person is behind on rent, they can use an interactive CFPB tool to see what they can do based on their situation. I pulled up what to do if you're facing eviction, so I can prepare for my appointment with Jane. Now, before I meet with Jane, let's review. NARRATOR (13:39): Knowledge check, a lawyer who collects debts on behalf of a landlord needs to comply with the Fair Debt Collection Practices Act. True or false? If you said true, then you are correct. Lawyers who collect debts on behalf of landlords are considered debt collectors. DAVID (13:59): Jane is coming in for her appointment today. I have the Bureau website up on my computer so we can explore her options together. Jane has not had an eviction lawsuit filed. Here is what she can do. She can learn more about rental assistance programs to see if she can apply for help with her housing cost. She can talk with her landlord about making a repayment plan, and she can explore state and local rules that may protect her from eviction. Jane was able to get the help that she needed. DAVID (14:32): In the future, I know I can use this website, even if clients are in situations where an eviction lawsuit has been filed or the court has ruled that they can be evicted. NARRATOR (14:44): Don't forget, you can always access resources and learn more. On consumerfinance.gov, look for information you need to help clients explore their personal finance rights. NARRATOR (14:56): Our slides featured a variety of resources. Use these links to visit sources. NARRATOR (15:32): As you can see, there is a wealth of resources available in consumerfinance.gov. To continue to learn more, join the CFPB FinEx community. You'll receive updates by email and engage with a large network of practitioners. You can also access the LinkedIn discussion group for news, research, and best practices. Plus, stay up to date with webinars, regional meetings, and conferences all while meeting CFPB presenters who can work with your organization. Use the link to join today. NARRATOR (16:08): Thank you for joining us as we explored personal finance rights. Module three is up next. 2