Debt Collection Practices (Regulation F); Pay-to-Pay Fees

Publisher lists this guidance as withdrawn/rescinded: Debt Collection Practices (Regulation F); Pay-to-Pay Fees, 87 FR 39733 (July 05, 2022); withdrawn on May 12, 2025 .

This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents.
Rules and Regulations
Federal Register
39733
Vol. 87, No. 127
Tuesday, July 5, 2022
1
Public Law 95–109, sec. 802(e), 91 Stat. 874, 874
(codified at 15 U.S.C. 1692(e)).
2
15 U.S.C. 1692(a), (b). See also S. Rep. No. 95–
382, at 2 (1977) (stating that ‘‘debt collection abuse
by third party debt collectors [was] a widespread
and serious national problem,’’ which Congress
largely attributed to a ‘‘lack of meaningful
legislation on the State level’’).
3
15 U.S.C. 1692f.
4
15 U.S.C. 1692f(1).
5
See 15 U.S.C. 1692l(a) (2010).
6
Public Law 111–203, sec. 1089, 124 Stat. 1376,
2093 (codified at 15 U.S.C. 1692l(b)(6)).
7
15 U.S.C. 1691l(d).
8
See Debt Collection Practices (Regulation F), 85
FR 76734 (Nov. 30, 2020); Debt Collection Practices
(Regulation F), 86 FR 5766 (Jan. 19, 2021).
9
85 FR 76734, 76833.
10
Id. at 76833, 76892.
11
CFPB Compliance Bulletin 2017–01, 82 FR
35936, 35936 (Aug. 2, 2017).
12
Id. at 35938.
13
Id. (explaining that the CFPB examiners had
instructed the company to collect pay-by-phone
fees only ‘‘where expressly authorized by contract
or state law’’); see also CFPB: Fall 2014 Supervisory
Highlights, at 7, available at https://files.consumer
finance.gov/f/201410_cfpb_supervisory-highlights_
fall-2014.pdf (similar); CFPB: Fall 2015 Supervisory
Highlights, at 20–21, available at https://
Continued
BUREAU OF CONSUMER FINANCIAL
PROTECTION
12 CFR Part 1006
Debt Collection Practices (Regulation
F); Pay-to-Pay Fees
AGENCY: Bureau of Consumer Financial
Protection.
ACTION: Advisory opinion.
SUMMARY: Section 808(1) of the Fair
Debt Collection Practices Act (FDCPA or
Act) prohibits debt collectors from
collecting any amount (including any
interest, fee, charge, or expense
incidental to the principal obligation)
unless that amount is expressly
authorized by the agreement creating
the debt or permitted by law. The
Consumer Financial Protection Bureau
(CFPB) issues this advisory opinion to
affirm that this provision prohibits debt
collectors from collecting pay-to-pay or
‘‘convenience’’ fees, such as fees
imposed for making a payment online or
by phone, when those fees are not
expressly authorized by the agreement
creating the debt or expressly
authorized by law. This advisory
opinion also clarifies that a debt
collector may also violate section 808(1)
when the debt collector collects pay-to-
pay fees through a third-party payment
processor.
DATES: This advisory opinion is
effective on July 5, 2022.
FOR FURTHER INFORMATION CONTACT:
Sonya Pass, Senior Legal Counsel and
Chief of Staff, Legal Division, (202) 435–
7700. If you require this document in an
alternative electronic format, please
contact CFPB_Accessibility@cfpb.gov.
SUPPLEMENTARY INFORMATION:
I. Advisory Opinion
A. Background
Congress enacted the FDCPA in 1977
to ‘‘eliminate abusive debt collection
practices by debt collectors, to insure
that those debt collectors who refrain
from using abusive debt collection
practices are not competitively
disadvantaged, and to promote
consistent State action to protect
consumers against debt collection
abuses.’’
1
The statute was a response to
‘‘abundant evidence of the use of
abusive, deceptive, and unfair debt
collection practices by many debt
collectors,’’ which Congress attributed
to the ‘‘inadequacy’’ of ‘‘existing laws
and procedures,’’ including State laws.
2

To remedy this, the FDCPA imposes
various requirements and restrictions on
debt collectors’ debt collection activity.
Relevant here is section 808, which
provides that a ‘‘debt collector may not
use unfair or unconscionable means to
collect or attempt to collect any debt.’’
3

Section 808 then states that ‘‘[w]ithout
limiting the general application of the
foregoing, the following conduct is a
violation of this section’’ and
enumerates eight specifically prohibited
practices, including the ‘‘collection of
any amount (including any interest, fee,
charge, or expense incidental to the
principal obligation) unless such
amount is expressly authorized by the
agreement creating the debt or permitted
by law.’’
4

At the time of the FDCPA’s
enactment, the Federal Trade
Commission (FTC) was the agency that
administered, and had primary
responsibility for enforcing, the
FDCPA.
5
Then, in 2010, Congress
passed the Dodd-Frank Wall Street
Reform and Consumer Protection Act,
which created the CFPB and granted it
authority to administer, implement, and
enforce the FDCPA.
6
Congress also
provided the CFPB authority to
prescribe rules under the FDCPA.
7

Pursuant to that authority, in 2020, the
CFPB issued Regulation F, which
implements the FDCPA, to prescribe
rules governing the activities of debt
collectors.
8
The CFPB implemented
FDCPA section 808(1) at 12 CFR
1006.22(b) by ‘‘generally mirror[ing] the
statute, with minor wording and
organizational changes for clarity.’’
9
In
particular, the CFPB stated that the
‘‘term ‘any amount’ includes any
interest, fee, charge, or expense
incidental to the principal
obligation.’’
10

In 2013, the CFPB launched its
supervisory program over certain larger
participants in the consumer debt
collection market. Through these
examinations, the CFPB ascertains
compliance with the FDCPA, and now
Regulation F, as well as other Federal
consumer financial laws. The CFPB also
periodically publishes Supervisory
Highlights with anonymized findings
and analysis from these supervisory
examinations, as well as compliance
bulletins to provide entities with
guidance on complying with certain
legal requirements.
For example, in 2017, the CFPB
issued a compliance bulletin (Bulletin)
that ‘‘provides guidance to debt
collectors about compliance with the
[FDCPA] when assessing phone pay
fees,’’ a type of pay-to-pay fee.
11
The
Bulletin summarizes CFPB staff’s
conclusion that, under section 808(1),
debt collectors may collect such pay-to-
pay fees only if the underlying contract
or state law expressly authorizes those
fees.
12
In particular, the Bulletin states
that in at least one supervisory exam,
CFPB examiners found that a debt
collector ‘‘violated [section 808(1)]
when they charged fees for taking
mortgage payments over the phone’’
where the underlying contracts creating
the debt did not expressly authorize
collecting such fees and where the
relevant State law did not ‘‘expressly
permit collecting such fees.’’
13

VerDate Sep<11>2014 15:56 Jul 01, 2022 Jkt 256001 PO 00000 Frm 00001 Fmt 4700 Sfmt 4700 E:\FR\FM\05JYR1.SGM 05JYR1
lotter on DSK11XQN23PROD with RULES1

39734 Federal Register/ Vol. 87, No. 127 / Tuesday, July 5, 2022 / Rules and Regulations
files.consumerfinance.gov/f/201510_cfpb_
supervisory-highlights.pdf (similar).
14
15 U.S.C. 1692f(1) (emphasis added). See also
12 CFR 1006.22(b).
15
Ali v. Fed. Bur. of Prisons, 552 U.S. 214, 219
(2008) (quoting United States v. Gonzales, 520 U.S.
1, 5 (1997), in turn quoting Webster’s Third New
International Dictionary 97 (1976)).
16
Include, Black’s Law Dictionary (11th ed.
2019). Additionally, as the Supreme Court has
stated, ‘‘including’’ is ‘‘not [a term] of all-embracing
definition, but connotes simply an illustrative
application of the general principle.’’ Fed. Land
Bank of St. Paul v. Bismarck Lumber Co., 314 U.S.
95, 100 (1941); see also Arizona State Bd. For
Charter Schools v. Dep’t of Educ., 464 F.3d 1003,
1007 (9th Cir. 2006) (‘‘[T]he word ‘including’ is
ordinarily defined as a term of illustration,
signifying that what follows is an example of the
preceding principle.’’); United States v. Hawley, 919
F.3d 252, 256 (4th Cir. 2019) (explaining that
‘‘including’’ ‘‘is an introductory term for an
incomplete list of examples’’).
17
The CFPB notes that, if a debt collector is
engaged in a truly separate transaction and is not
collecting or attempting to collect a debt covered by
the FDCPA, section 808(1) does not apply.
18
See, e.g., Flores v. Collection Consultants of
Cal., No. SA CV 14–0771–DOC, 2015 WL 4254032,
at 10 (C.D. Cal. Mar. 20, 2015); Shula v. Lawent, 359
F.3d 489, 492–93 (7th Cir. 2004). In Shula, it does
not appear that that court was presented with the
question whether ‘‘any amount’’ included more
than ‘‘fees . . . incidental to the principal
obligation’’; nor did that court analyze the issue.
For the reasons stated above, the CFPB disagrees
with that decision to the extent it suggested that
section 808(1) applies only to amounts that are
incidental to the principal obligation.
19
Section 808(1) of the FDCPA and Regulation F,
12 CFR 1006.22(b), also covers pay-to-pay fees for
the separate reason that such fees are ‘‘incidental
to’’ the principal obligation. While the FDCPA does
not define ‘‘incidental,’’ it is ordinarily understood
as ‘‘related to,’’ see Collins English Dictionary (12th
ed. 2014), or ‘‘[s]ubordinate to something of greater
importance,’’ see Black’s Law Dictionary (11th ed.
2019). Pay-to-pay fees meet these definitions: They
are ‘‘related to’’ the principal obligation because
they are fees charged for paying the principal
obligation. Indeed, if the principal obligation did
not exist, then neither would the pay-to-pay fee.
These fees are also generally minor in comparison
to the outstanding debt and are therefore
‘‘subordinate to’’ the principal obligation.
20
15 U.S.C. 1692f(1) (emphasis added). See also
12 CFR 1006.22(b).
21
Permit, Webster’s Third New International
Dictionary 1683 (1976); see also Permit, Black’s Law
Dictionary (5th ed. 1979) (defining ‘‘permit’’ as ‘‘[t]o
suffer, allow, consent, let; to give leave or license;
to acquiesce, by failure to prevent, or to expressly
assent or agree to the doing of an act’’).
22
Garner’s Dictionary of Legal Usage 46 (3d ed.
2011); see also Alexander v. Carrington Mortgage
Services, 23 F.4th 370, 377 (4th Cir. 2022) (holding
‘‘permitted by law’’ requires affirmative
authorization).
23
King v. Burwell, 576 U.S. 473, 492 (2015).
24
Note that, even if pay-to-pay fees are expressly
authorized in the underlying agreement or
permitted by State law, debt collectors must still
take care to comply with other laws, including
other provisions of the FDCPA and the Consumer
Financial Protection Act’s prohibition on unfair,
deceptive, or abusive acts or practices, when
assessing pay-to-pay fees.
25
The CFPB acknowledges that some district
courts have held otherwise. See, e.g., Thomas-
Lawson v. Carrington Mortg. Servs., LLC, No. 2:20–
cv–07301–ODW, 2021 WL 1253578 (C.D. Cal. Apr.
5, 2021), appeal pending, No. 21–55459 (9th Cir.).
26
See Obduskey v. McCarthy & Holthus LLP, 139
S. Ct. 1029, 1037 (2019) (refusing to interpret the
B. Coverage
This advisory opinion applies to debt
collectors as defined in section 803(6) of
the FDCPA and implemented in
Regulation F, 12 CFR 1006.2(i). As used
in this advisory opinion, pay-to-pay
fees—sometimes called convenience
fees—refers to fees incurred by
consumers to make debt collection
payments through a particular channel,
such as over the telephone or online.
C. Legal Analysis
1. Any Amount
Section 808(1) of the FDCPA prohibits
debt collectors, in relevant part, from
‘‘collect[ing] . . . any amount (including
any interest, fee, charge, or expense
incidental to the principal
obligation).’’
14
As the Supreme Court
has explained, the ‘‘word ‘any’ has an
expansive meaning, that is, ‘one or some
indiscriminately of whatever kind.’ ’’
15

In addition, under its ordinary meaning,
the term ‘‘including’’ typically indicates
a partial list.
16
The CFPB interprets the
words ‘‘any’’ and ‘‘including’’ as used in
section 808(1) consistent with their
ordinary meanings. Accordingly, the
CFPB clarifies that FDCPA section
808(1) and Regulation F, 12 CFR
1006.22(b), apply to any amount
collected by a debt collector in
connection with the collection of a
debt,
17
including, but not limited to, any
interest, fee, charge, or expense that is
incidental to the principal obligation.
Consistent with this interpretation,
the CFPB further clarifies that pay-to-
pay fees charged to consumers for
accepting a consumer’s payment on a
debt through a particular payment
channel are an ‘‘amount’’ within the
meaning of FDCPA section 808(1) and
Regulation F, 12 CFR 1006.22(b). The
CFPB acknowledges that some courts
have held otherwise, finding that pay-
to-pay fees do not violate FDCPA
section 808(1) because such fees are not
‘‘incidental to the principal
obligation.’’
18
But, as explained, the
CFPB interprets section 808(1) to apply
to ‘‘any amount,’’ even if such amount
is not ‘‘incidental to’’ the principal
obligation.
19

2. Permitted by Law
Section 808(1) of the FDCPA
prohibits, in relevant part, the collection
of any amount ‘‘unless such amount is
expressly authorized by the agreement
creating the debt or permitted by
law.’’
20
The word ‘‘permit’’ is
susceptible to multiple meanings, but it
tends to refer to ‘‘affirmative
authorization,’’ and the CFPB reads
section 808(1) to use the word in that
sense. Dictionaries provide that
‘‘permit’’ can mean either ‘‘to consent to
expressly or formally,’’ suggesting
affirmative authorization, or to ‘‘allow’’
or ‘‘to acquiesce, by failure to prevent,’’
suggesting that the lack of a prohibition
is sufficient.
21
However, ‘‘allow and
permit have an important connotative
difference. Allow . . . suggests merely
the absence of opposition, or refraining
from a proscription. In contrast, permit
suggests affirmative sanction or
approval.’’
22
Use of the word ‘‘permit,’’
rather than ‘‘allow,’’ therefore suggests
that affirmative authorization, rather
than a mere lack of a prohibition, is
required. Furthermore, as the Supreme
Court has instructed, ‘‘words of a statute
must be read in their context,’’
23
and
here, ‘‘permit’’ is used not in isolation
but as part of the phrase ‘‘permitted by
law.’’ While in some contexts one may
‘‘permit’’ something by failing to
prevent it, it is far less natural to
understand ‘‘permitted by law’’ to mean
‘‘permitted by the absence of any law
prohibiting it.’’
The CFPB therefore interprets FDCPA
section 808(1) to prohibit a debt
collector from collecting any amount
unless such amount either is expressly
authorized by the agreement creating
the debt (and is not prohibited by law)
or is expressly permitted by law. That
is, the CFPB interprets FDCPA section
808(1) to permit collection of an amount
only if: (1) the agreement creating the
debt expressly permits the charge and
some law does not prohibit it; or (2)
some law expressly permits the charge,
even if the agreement creating the debt
is silent. The CFPB’s interpretation of
the phrase ‘‘permitted by law’’ applies
to any ‘‘amount’’ covered under section
808(1), including pay-to-pay fees.
24

Under the CFPB’s interpretation, an
amount is impermissible if both the
agreement creating the debt and other
law are silent. For example, under the
CFPB’s interpretation, amounts,
including pay-to-pay fees, that are
neither expressly authorized by the
agreement creating the debt nor
expressly authorized by law are
impermissible under FDCPA section
808(1) and Regulation F, 12 CFR
1006.22(b), even if such amounts are the
subject of a separate, valid agreement
under State contract law.
25
Although
some courts have adopted this ‘‘separate
agreement’’ interpretation to permit debt
collectors to collect, for example, certain
pay-to-pay fees, the CFPB declines to do
so. Such a reading would render the
part of section 808(1) that refers to
amounts ‘‘expressly authorized by the
agreement creating the debt’’
superfluous
26
because a lawful
VerDate Sep<11>2014 15:56 Jul 01, 2022 Jkt 256001 PO 00000 Frm 00002 Fmt 4700 Sfmt 4700 E:\FR\FM\05JYR1.SGM 05JYR1
lotter on DSK11XQN23PROD with RULES1

39735 Federal Register/ Vol. 87, No. 127 / Tuesday, July 5, 2022 / Rules and Regulations
FDCPA in a way that would render a provision
‘‘superfluous’’).
27
Accord Alexander, 23 F.4th at 379 (rejecting
the separate agreement interpretation in part
because it would render section 808(1)’s other
prong superfluous). The separate agreement
interpretation also would conflict with the FDCPA’s
use of the phrase ‘‘expressly authorized,’’ since
general principles of State contract law allow
parties to agree to express or implied terms as part
of any agreement. See Restatement (Second) of
Contracts § 4 cmt. a (1981). If general principles of
contract law counted as a ‘‘law’’ that ‘‘permitted’’
the collection of amounts, debt collectors would be
free to collect not only those amounts authorized
by separate agreements, but also to collect amounts
that are only implicitly authorized by the agreement
creating the debt—further rendering section 808(1)’s
‘‘express’’ requirement meaningless.
28
See Johnson v. Riddle, 305 F.3d 1107, 1118
(10th Cir. 2002) (‘‘The statute does not ask whether
[the debt collector’s] actions were permitted by law
..., it asks whether the amount he sought to
collect was permitted by law.’’ (emphasis in
original)).
29
While a contract might, consistent with
contract law, permit an amount, section 808(1) only
permits collecting amounts authorized by contract
when the amount is expressly authorized by the
contract ‘‘creating the debt.’’
30
See, e.g., Alexander, 23 F.4th at 376–77
(holding, in a case regarding pay-to-pay fees, that
‘‘ ’permitted by law’ requires affirmative sanction or
approval’’); Seeger v. AFNI, Inc., 548 F.3d 1107,
1111, 1112 (7th Cir. 2008) (finding that, to be
entitled to collect a fee, debt collectors ‘‘must show
that the fee is either authorized by the governing
contract or that it is permitted by Wisconsin law’’
and that, in that case, that neither an agreement nor
a law expressly permitting a collection fee existed);
Tuttle v. Equifax Check, 190 F.3d 9, 13 (2d Cir.
1999) (explaining that if ‘‘state law neither
affirmatively permits nor expressly prohibits
service charges, a service charge can be imposed
only if the customer expressly agrees to it in the
[underlying] contract’’).
31
See Staff Commentary on the Fair Debt
Collection Practices Act, 53 FR 50097, 50101 (Dec.
13, 1988).
32
Id. at 50108.
33
Id.
34
See, e.g., Ballentine’s Law Dictionary (3d ed.
2010) (defining ‘‘collect’’ as ‘‘to receive payment’’);
cf. 15 U.S.C. 1692a(6) (defining debt collector to
include persons who ‘‘directly or indirectly’’ collect
debts).
35
12 U.S.C. 5512(b)(1); 5481(14); 5481(12)(H).
36
5 U.S.C. 553(b).
37
5 U.S.C. 603(a), 604(a).
38
44 U.S.C. 3501–3521.
39
5 U.S.C. 801 et seq.
agreement creating the debt is, by
definition, an agreement valid under
State contract law.
27
In addition, the
separate agreement interpretation
ignores section 808(1)’s focus on the
‘‘amount’’ being ‘‘expressly authorized
by the agreement creating the debt’’ or
‘‘permitted by law.’’
28
Under section
808(1), it is not enough for the
agreement to be ‘‘permitted by law’’;
rather, the ‘‘amount’’ itself must be.
Contract law standing alone does not
provide for the collection of any specific
amounts—and no principle of contract
law says debt collectors may collect
pay-to-pay fees.
29
Thus, while it may
have been permissible under contract
law for a debt collector to enter into
separate agreements with consumers,
contract law does not permit the
‘‘amount’’ at issue, i.e., the pay-to-pay
fees.
The CFPB’s interpretation of
‘‘permitted by law’’ in FDCPA section
808(1) is consistent with the previous
interpretation in a CFPB compliance
bulletin as discussed in part I.A., as well
as with the prior interpretation of FTC
staff and the holdings of the majority of
courts to address the issue.
30
In
particular, in 1988, FTC staff issued
Commentary that set forth ‘‘staff
interpretations’’ of the FDCPA.
31
As
relevant here, FTC staff stated that,
under section 808(1), a ‘‘debt collector
may attempt to collect a fee or charge in
addition to the debt if . . . the contract
[creating the debt] is silent but the
charge is otherwise expressly permitted
by state law.’’
32
Conversely, FTC staff
stated that ‘‘a debt collector may not
collect an additional amount if . . . the
contract does not provide for collection
of the amount and state law is silent.’’
33

The CFPB’s interpretation is also
consistent with the FDCPA’s statutory
purposes. As noted in part I.A, Congress
passed the FDCPA because it found that
existing laws and procedures, including
at the state level, were inadequate to
protect consumers. Given this concern,
it would be particularly unnatural to
understand ‘‘permitted by law’’ to mean
‘‘permitted because no law prohibits it.’’
Accordingly, the CFPB interprets
FDCPA section 808(1) and Regulation F,
12 CFR 1006.22(b), to prohibit debt
collectors from collecting any amount,
including any pay-to-pay fee, not
expressly authorized in the agreement
creating the debt unless there is some
law that affirmatively authorizes the
collection of that amount.
3. Payment Processors
Debt collectors may violate FDCPA
section 808(1) and Regulation F, 12 CFR
1006.22(b), when using payment
processors who charge consumers pay-
to-pay fees. For instance, a debt
collector collects an amount under
section 808(1) at a minimum when a
third-party payment processor collects a
pay-to-pay fee from a consumer and
remits to the debt collector any amount
in connection with that fee, whether in
installments or in a lump sum.
34

II. Regulatory Matters
This is an advisory opinion issued
under the CFPB’s authority to interpret
the FDCPA, including under section
1022(b)(1) of the Consumer Financial
Protection Act, which authorizes
guidance as may be necessary or
appropriate to enable the CFPB to
administer and carry out the purposes
and objectives of Federal consumer
financial laws, such as the FDCPA.
35

An advisory opinion is a type of
interpretive rule. As an interpretive
rule, this advisory opinion is exempt
from the notice-and-comment
rulemaking requirements of the
Administrative Procedure Act.
36

Because no notice of proposed
rulemaking is required, the Regulatory
Flexibility Act does not require an
initial or final regulatory flexibility
analysis.
37
The CFPB has also
determined that this advisory opinion
does not impose any new or revise any
existing recordkeeping, reporting, or
disclosure requirements on covered
entities or members of the public that
would be collections of information
requiring approval by the Office of
Management and Budget under the
Paperwork Reduction Act.
38

Pursuant to the Congressional Review
Act,
39
the CFPB will submit a report
containing this advisory opinion and
other required information to the United
States Senate, the United States House
of Representatives, and the Comptroller
General of the United States prior to the
opinion’s published effective date. The
Office of Information and Regulatory
Affairs has designated this advisory
opinion as not a ‘‘major rule’’ as defined
by 5 U.S.C. 804(2).
Rohit Chopra,
Director, Consumer Financial Protection
Bureau.
[FR Doc. 2022–14230 Filed 7–1–22; 8:45 am]
BILLING CODE 4810–AM–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. FAA–2022–0382; Project
Identifier MCAI–2021–01452–T; Amendment
39–22099; AD 2022–13–13]
RIN 2120–AA64
Airworthiness Directives; Airbus SAS
Airplanes
AGENCY: Federal Aviation
Administration (FAA), Department of
Transportation (DOT).
ACTION: Final rule.
SUMMARY: The FAA is adopting a new
airworthiness directive (AD) for all
Airbus SAS Model A350–941 and –1041
airplanes. This AD was prompted by
reports that passenger door stop screws
were found with missing screw heads.
VerDate Sep<11>2014 15:56 Jul 01, 2022 Jkt 256001 PO 00000 Frm 00003 Fmt 4700 Sfmt 4700 E:\FR\FM\05JYR1.SGM 05JYR1
lotter on DSK11XQN23PROD with RULES1