Consumer Financial Protection Circular 2022-05: Debt Collection and Consumer Reporting Practices Involving Invalid Nursing Home Debts

Publisher lists this guidance as withdrawn/rescinded: Consumer Financial Protection Circular 2022-05: Debt Collection and Consumer Reporting Practices Involving Invalid Nursing Home Debts, 87 FR 57375 (Sept. 20, 2022); withdrawn on May 12, 2025 .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
57375
Vol. 87, No. 181
Tuesday, September 20, 2022
1
See Public Law 100–203, tit. IV, subtit. C, 101
Stat. 1330 (1987). The Nursing Home Reform Act
imposes requirements for nursing facilities that
participate in Medicaid, see 42 U.S.C. 1396r, and
for skilled nursing facilities that participate in
Medicare, see 42 U.S.C. 1395i–3. For simplicity,
and because the distinction is not relevant to the
Bureau’s analysis, this Circular refers to both
nursing facilities and skilled nursing facilities as
‘‘nursing facilities.’’
2
See 42 CFR 483.1 et seq.
3
See 42 U.S.C. 1395i–3(f)(1), (g)(1)(A), (h); 42
U.S.C. 1396r(f)(1), (g)(1)(A), (h).
4
42 U.S.C. 1395i–3(c)(5)(A)(ii), 1396r(c)(5)(A)(ii);
42 CFR 483.1(b), 483.15(a)(3).
5
56 FR 48826, 48841 (Sept. 26, 1991).
6
See id.; see also Centers for Medicare &
Medicaid Services, State Operations Manual,
Appendix PP, Guidance to § 483.15(a)(3) (Nov. 22,
2017), available at https://www.cms.gov/files/
document/appendix-pp-guidance-surveyor-long-
term-care-facilities.pdf.
7
42 U.S.C. 1395i–3(c)(5)(B)(ii), 1396r(c)(5)(B)(ii);
see also 42 CFR 483.15(a)(3).
8
56 FR 48826, 48841 (Sept. 26, 1991).
9
42 CFR 483.10(g)(18)(v).
10
See, e.g., Manor of Lake City, Inc. v. Hinners,
548 NW2d 573, 576 (Iowa 1996); Village at the
Greene v. Smith, 2020-Ohio-4088, ¶ 25 (Ohio Ct.
App. 2020); Knight v. John Knox Manor, Inc., 92 So.
3d 111, 120 (Ala. Civ. App. 2012).
11
See, e.g., Ala. Admin. Code r. 560–X–10–.02(9);
410 Ind. Admin. Code 16.2–3.1–16(b); see also DC
Mun. Regs. tit. 22, § B3200.1 (incorporating
requirements of Federal regulations implementing
Nursing Home Reform Act).
BUREAU OF CONSUMER FINANCIAL
PROTECTION
12 CFR Chapter X
Consumer Financial Protection
Circular 2022–05: Debt Collection and
Consumer Reporting Practices
Involving Invalid Nursing Home Debts
AGENCY: Bureau of Consumer Financial
Protection.
ACTION: Consumer financial protection
circular.
SUMMARY: The Consumer Financial
Protection Bureau (Bureau or CFPB) has
issued Consumer Financial Protection
Circular 2022–05, titled, ‘‘Debt
collection and consumer reporting
practices involving invalid nursing
home debts.’’ In this circular, the
Bureau responds to the question, ‘‘Can
debt collection and consumer reporting
practices relating to nursing home debts
that are invalid under the Nursing Home
Reform Act violate the Fair Debt
Collection Practices Act (FDCPA) and
Fair Credit Reporting Act (FCRA)?’’
DATES: The Bureau released this circular
on its website on September 8, 2022.
ADDRESSES: Enforcers, and the broader
public, can provide feedback and
comments to Circulars@cfpb.gov.
FOR FURTHER INFORMATION CONTACT:
Colin Reardon or Joshua Johnson,
Senior Counsels, Office of Law & Policy,
at (202) 435–7700. If you require this
document in an alternative electronic
format, please contact
CFPB_Accessibility@cfpb.gov.
SUPPLEMENTARY INFORMATION:
Question Presented
Can debt collection and consumer
reporting practices relating to nursing
home debts that are invalid under the
Nursing Home Reform Act violate the
Fair Debt Collection Practices Act
(FDCPA) and Fair Credit Reporting Act
(FCRA)?
Response
Yes. Under the Nursing Home Reform
Act, a nursing facility may not condition
a resident’s admission or continued stay
on receiving a guarantee of payment
from a third party, such as a relative or
friend. Contractual provisions that
violate that prohibition are illegal and
unenforceable. As detailed in this
Circular, certain practices related to the
collection of nursing home debts that
are invalid under the Nursing Home
Reform Act and its implementing
regulation violate the FDCPA and
FCRA.
Background on the Nursing Home
Reform Act
Enacted in 1987, the Nursing Home
Reform Act establishes a comprehensive
set of requirements that protect the
health, safety, welfare, and rights of
residents of nursing facilities that
participate in Medicaid and Medicare.
1

The Centers for Medicare & Medicaid
Services (‘‘CMS’’) and the Department of
Health and Human Services (‘‘HHS’’)
have issued rules implementing the
Nursing Home Reform Act.
2
State
agencies are responsible for surveying
nursing facilities for compliance with
the Nursing Home Reform Act’s
requirements concerning admissions
agreements, and HHS and CMS are
responsible for the enforcement of those
requirements.
3

Among other protections, the Nursing
Home Reform Act and its implementing
regulation prohibit a nursing facility
that participates in Medicaid or
Medicare from requesting or requiring a
third-party guarantee of payment as a
condition of admission, expedited
admission, or continued stay in the
facility.
4
As HHS has explained, this
prohibition prevents a nursing facility
‘‘from requiring a person other than the
resident to assume personal
responsibility for any cost of the
resident’s care.’’
5
The prohibition
applies to all residents and prospective
residents of a nursing facility, regardless
of whether they are eligible for Medicare
or Medicaid.
6
The Nursing Home
Reform Act further provides that a
nursing facility may require a resident’s
representative who has legal access to a
resident’s available income or resources
to sign a contract to provide the facility
payment from the resident’s income or
resources, so long as the representative
does not incur personal financial
liability.
7

Through these provisions, Congress
sought to prohibit nursing facilities
‘‘from requiring a person, such as a
relative, to accept responsibility for the
charges incurred by a resident, unless
that person is authorized by law to
disburse the income or assets of the
resident.’’
8
A nursing facility’s
admissions agreement may not contain
terms that conflict with the Nursing
Home Reform Act and its implementing
regulation,
9
and courts have recognized
that contract terms that conflict with the
Nursing Home Reform Act and its
implementing regulation are
unenforceable.
10

Some States have adopted State law
analogues of the Nursing Home Reform
Act that prohibit nursing facilities from
requiring third-party guarantees, and
admissions agreements can also be
unenforceable if they violate those State
law prohibitions.
11

Violations of the FDCPA and FCRA
While the CFPB does not enforce
compliance with the Nursing Home
Reform Act and is generally not
responsible for overseeing the activities
of nursing facilities, the CFPB is
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57376 Federal Register/ Vol. 87, No. 181 / Tuesday, September 20, 2022 / Rules and Regulations
12
See, e.g., 12 U.S.C. 5481(12)(F), (H), 5512(b),
5514(c); 15 U.S.C. 1681s(b)(1)(H), (e) (FCRA); 15
U.S.C. 1692l(b)(6), (d) (FDCPA).
13
15 U.S.C. 1681s (FCRA); 15 U.S.C. 1692l
(FDCPA). States can directly bring actions under
FCRA, see 12 U.S.C. 1681s(c), and can also bring
actions under the Consumer Financial Protection
Act (CFPA) against ‘‘covered persons’’ and ‘‘service
providers’’ based upon violations of Federal
consumer financial laws, including the FDCPA and
FCRA, see Authority of States to Enforce the
Consumer Financial Protection Act of 2010, 87 FR
31940 (May 26, 2022).
14
15 U.S.C. 1681n, 1681o (FCRA); 15 U.S.C.
1692k (FDCPA).
15
The Bureau notes that practices involving the
collection of invalid nursing home debts may
violate other laws not discussed in this Circular.
For example, the collection of invalid nursing home
debt may violate State law analogues of the FDCPA
and State laws prohibiting unfair, deceptive, or
abusive acts or practices. In addition, to the extent
that persons collecting nursing home debts are
‘‘covered persons’’ or ‘‘service providers’’ under the
CFPA, see 12 U.S.C. 5481(6), (15)(A)(i), (iv), (x),
(26), the collection of invalid nursing home debts
would typically violate the CFPA’s prohibition on
engaging in any unfair, deceptive, or abusive act or
practice. 12 U.S.C. 5531(a), 5536(a)(1)(B); see also
CFPB v. CashCall, Inc., 35 F.4th 734, 746 (9th Cir.
2022) (affirming ruling that defendant ‘‘engaged in
a deceptive practice by collecting payments on
loans that were invalid’’). Furthermore, actions
taken with respect to nursing home debts may
violate other provisions of the FDCPA and FCRA
not specifically addressed in this Circular.
16
See 15 U.S.C. 1692a(5) (defining ‘‘debt’’ as ‘‘any
obligation or alleged obligation of a consumer to
pay money arising out of a transaction in which the
money, property, insurance, or services which are
the subject of the transaction are primarily for
personal, family, or household purposes, whether
or not such obligation has been reduced to
judgment’’); see also Eades v. Kennedy, PC Law
Offices, 799 F.3d 161, 170 (2d Cir. 2015).
17
15 U.S.C. 1692a(6) (defining ‘‘debt collector’’);
12 CFR 1006.2(i) (same).
18
15 U.S.C. 1692e; 12 CFR 1006.18(a).
19
15 U.S.C. 1692e(2), (5), (10); accord 12 CFR
1006.18(b)(2)(i), (c)(1), (d).
20
Attorneys who regularly engage in collecting
consumer debts, including through litigation, are
‘‘debt collectors’’ under the FDCPA. See Heintz v.
Jenkins, 514 U.S. 291 (1995).
21
Some nursing facilities may claim that family
members are responsible for residents’ costs under
State filial support or necessaries statutes. See
Katherine C. Pearson, Filial Support Laws in the
Modern Era: Domestic and International
Comparison of Enforcement Practices for Laws
Requiring Adult Children to Support Indigent
Parents, 20 Elder L.J. 269 (2013), https://
elibrary.law.psu.edu/cgi/viewcontent.cgi?
article=1034&context=fac_works. This Circular
does not address such claims made under State law.
22
Attorneys collecting debts on behalf of nursing
facilities may also independently violate the
FDCPA’s prohibition on misrepresentations if their
law firm alleges that a third party owes the debt in
pleadings or other communications that the firm’s
attorneys were not ‘‘meaningfully involved’’ in
preparing. Nielsen v. Dickerson, 307 F.3d 623, 635
(7th Cir. 2002); see also Miller v. Wolpoff &
Abramson, L.L.P., 321 F.3d 292, 300–07 (2d Cir.
2003); CFPB v. Frederick J. Hanna & Assocs., 114
F. Supp. 3d 1342, 1362–69 (N.D. Ga. 2015).
23
12 CFR 1022.42(a).
24
15 U.S.C. 1681s–2(a)(8), (b); 12 CFR 1022.43(a).
25
15 U.S.C. 1681s–2(a)(1)(B). The consumer must
send the notice to the address specified by the
furnisher for such notices. Id. If the furnisher has
not specified such an address, then the furnisher is
subject to FCRA’s general prohibition against
‘‘furnish[ing] any information relating to a
consumer to any consumer reporting agency if the
person knows or has reasonable cause to believe
that the information is inaccurate.’’ 15 U.S.C.
1681s–2(a)(1)(A).
26
15 U.S.C. 1681e(b).
27
15 U.S.C. 1681i.
responsible for issuing rules regarding
and enforcing compliance with the
FDCPA and FCRA.
12
The FDCPA and
FCRA can also be enforced by other
Federal government agencies and
States,
13
and through private actions
brought by consumers.
14
The CFPB is
issuing this Circular to emphasize that
certain practices involving the
collection of nursing home debts can
violate the FDCPA and FCRA.
15

Nursing facilities and their third-party
debt collectors at times seek to collect
residents’ debts from relatives and other
third parties when the resident cannot
afford to pay. The nursing facilities
reportedly collect unpaid balances,
often after the resident’s discharge or
death, directly from third parties. If the
third-party refuses to pay the arrears,
some nursing facilities hire debt
collectors to demand payment, report
the debt to consumer reporting
companies as the third party’s personal
debt, and sue the third party in court.
An amount that is owed or allegedly
owed for nursing facility services is a
‘‘debt’’ under the FDCPA because it
arises out of a consumer transaction.
16

When a nursing facility claims that a
resident’s bill has not been paid, it may
engage a third-party debt collector
subject to the FDCPA and Regulation F
to collect the resident’s debt,
17

including when the facility claims that
a third party is personally financially
responsible for the debt. Among other
things, the FDCPA and Regulation F
prohibit the use of ‘‘any false, deceptive,
or misleading representation or means
in connection with the collection of any
debt.’’
18
That prohibition includes, for
example, using a false representation of
the ‘‘character, amount, or legal status of
any debt’’; a ‘‘threat to take any action
that cannot legally be taken or that is
not intended to be taken’’; and ‘‘any
false representation or deceptive means
to collect or attempt to collect any debt
or to obtain information concerning a
consumer.’’
19

The prohibition on
misrepresentations includes
misrepresenting that a consumer must
pay a debt that arises from a contract
provision that is illegal and
unenforceable under Federal or State
law. Thus, a debt collector, including a
law firm in litigation,
20
that represents
that a third party must personally pay
a nursing facility resident’s debt may
violate the prohibition on
misrepresentations where the debt is
invalid under the Nursing Home Reform
Act, its implementing regulation, or one
of its State law analogues.
21

The CFPB is also aware that debt
collectors sometimes claim that a third
party, such as a relative of the resident,
is personally liable for the resident’s
debt because the third party engaged in
financial wrongdoing in relation to the
resident’s resources. In some cases, debt
collectors make such allegations in debt
collection lawsuits without having any
factual basis for the allegations, and the
allegations prove to be false. A debt
collector may violate the FDCPA’s
prohibition on misrepresentations by
making a false, baseless allegation in a
lawsuit that a third party engaged in
financial wrongdoing as a means to hold
them personally liable for a resident’s
debts.
22

The FCRA and its implementing
Regulation V impose obligations on
consumer reporting companies and on
debt collectors who furnish information
to consumer reporting companies,
including obligations relating to the
accuracy of information in consumer
reports. For example, a furnisher must
‘‘establish and implement reasonable
written policies and procedures
regarding the accuracy and integrity of
the information relating to consumers
that it furnishes to a consumer reporting
agency.’’
23
Furnishers must also
investigate consumer disputes
concerning the accuracy of the
information furnished,
24
and are
prohibited from furnishing inaccurate
information to any consumer reporting
company after receiving notice from a
consumer that particular information is
inaccurate.
25
In addition, consumer
reporting companies ‘‘shall follow
reasonable procedures to assure
maximum possible accuracy of the
information concerning the individual
about whom the report relates’’
26
and
must investigate consumer disputes.
27

It is inaccurate to report that a
consumer owes a debt when the debt is
based on an illegal contract term. Thus,
a debt collector who furnishes
information about nursing home debts,
or a consumer reporting company that
includes such information in a
consumer report, may violate FCRA and
Regulation V if those debts are invalid
and unenforceable under the Nursing
Home Reform Act, its implementing
regulation, or one of its State law
analogues. A furnisher or consumer
reporting company also violates FCRA
or Regulation V if it fails to meet its
dispute obligations with respect to
information related to such debts.
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57377 Federal Register/ Vol. 87, No. 181 / Tuesday, September 20, 2022 / Rules and Regulations
About Consumer Financial Protection
Circulars
Consumer Financial Protection
Circulars are issued to all parties with
authority to enforce Federal consumer
financial law. The CFPB is the principal
Federal regulator responsible for
administering Federal consumer
financial law, see 12 U.S.C. 5511,
including the Consumer Financial
Protection Act’s prohibition on unfair,
deceptive, and abusive acts or practices,
12 U.S.C. 5536(a)(1)(B), and 18 other
‘‘enumerated consumer laws,’’ 12 U.S.C.
5481(12). However, these laws are also
enforced by State attorneys general and
State regulators, 12 U.S.C. 5552, and
prudential regulators including the
Federal Deposit Insurance Corporation,
the Office of the Comptroller of the
Currency, the Board of Governors of the
Federal Reserve System, and the
National Credit Union Administration.
See, e.g., 12 U.S.C. 5516(d), 5581(c)(2)
(exclusive enforcement authority for
banks and credit unions with $10
billion or less in assets). Some Federal
consumer financial laws are also
enforceable by other Federal agencies,
including the Department of Justice and
the Federal Trade Commission, the
Farm Credit Administration, the
Department of Transportation, and the
Department of Agriculture. In addition,
some of these laws provide for private
enforcement.
Consumer Financial Protection
Circulars are intended to promote
consistency in approach across the
various enforcement agencies and
parties, pursuant to the CFPB’s statutory
objective to ensure Federal consumer
financial law is enforced consistently.
12 U.S.C. 5511(b)(4).
Consumer Financial Protection
Circulars are also intended to provide
transparency to partner agencies
regarding the CFPB’s intended approach
when cooperating in enforcement
actions. See, e.g., 12 U.S.C. 5552(b)
(consultation with CFPB by State
attorneys general and regulators); 12
U.S.C. 5562(a) (joint investigatory work
between CFPB and other agencies).
Consumer Financial Protection
Circulars are general statements of
policy under the Administrative
Procedure Act. 5 U.S.C. 553(b). They
provide background information about
applicable law, articulate considerations
relevant to the Bureau’s exercise of its
authorities, and, in the interest of
maintaining consistency, advise other
parties with authority to enforce Federal
consumer financial law. They do not
restrict the Bureau’s exercise of its
authorities, impose any legal
requirements on external parties, or
create or confer any rights on external
parties that could be enforceable in any
administrative or civil proceeding. The
CFPB Director is instructing CFPB staff
as described herein, and the CFPB will
then make final decisions on individual
matters based on an assessment of the
factual record, applicable law, and
factors relevant to prosecutorial
discretion.
Rohit Chopra,
Director, Consumer Financial Protection
Bureau.
[FR Doc. 2022–20324 Filed 9–19–22; 8:45 am]
BILLING CODE 4810–AM–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. FAA–2022–0587; Project
Identifier AD–2022–00394–E; Amendment
39–22170; AD 2022–19–01]
RIN 2120–AA64
Airworthiness Directives; General
Electric Company Turbofan Engines
AGENCY: Federal Aviation
Administration (FAA), DOT.
ACTION: Final rule.
SUMMARY: The FAA is adopting a new
airworthiness directive (AD) for certain
General Electric Company (GE) GEnx-
2B67/P model turbofan engines. This
AD was prompted by the detection of an
iron inclusion in a forging, which may
reduce the fatigue life of certain low-
pressure turbine rotor (LPTR) stage 4
disks and LPTR stage 6 disks. This AD
requires the removal of certain LPTR
stage 4 disks and LPTR stage 6 disks
from service and replacement with parts
eligible for installation. The FAA is
issuing this AD to address the unsafe
condition on these products.
DATES: This AD is effective October 25,
2022.
ADDRESSES: AD Docket: You may
examine the AD docket at
regulations.gov by searching for and
locating Docket No. FAA–2022–0587; or
in person at Docket Operations between
9 a.m. and 5 p.m., Monday through
Friday, except Federal holidays. The AD
docket contains this final rule, any
comments received, and other
information. The address for Docket
Operations is U.S. Department of
Transportation, Docket Operations, M–
30, West Building Ground Floor, Room
W12–140, 1200 New Jersey Avenue SE,
Washington, DC 20590.
FOR FURTHER INFORMATION CONTACT:
Alexei Marqueen, Aviation Safety
Engineer, ECO Branch, FAA, 1200
District Avenue, Burlington, MA 01803;
phone: (781) 238–7178; email:
Alexei.T.Marqueen@faa.gov.
SUPPLEMENTARY INFORMATION:
Background
The FAA issued a notice of proposed
rulemaking (NPRM) to amend 14 CFR
part 39 by adding an AD that would
apply to certain GE GEnx-2B67/P model
turbofan engines with an affected LPTR
stage 4 disk or LPTR stage 6 disk
installed, identified by part number and
serial number. The NPRM published in
the Federal Register on June 22, 2022
(87 FR 37247). The NPRM was
prompted by the engine manufacturer
notifying the FAA of the detection of an
iron inclusion in a forging, which may
reduce the fatigue life of certain LPTR
stage 4 disks and LPTR stage 6 disks.
The manufacturer’s investigation
determined that the inclusion is a melt-
related defect and that, as a result of the
inclusion forming in the forging, certain
LPTR stage 4 disks and LPTR stage 6
disks may have reduced material
properties and a lower fatigue life
capability. Reduced material properties
may cause premature LPTR stage 4 disk
and LPTR stage 6 disk fracture, which
could result in uncontained debris
release. As a result of its investigation,
the manufacturer published service
information that specifies procedures
for the removal and replacement of
certain LPTR stage 4 disks and LPTR
stage 6 disks installed on GEnx-2B67/P
model turbofan engines. This condition,
if not addressed, could result in
uncontained debris release, damage to
the engine, and damage to the airplane.
In the NPRM, the FAA proposed to
require the removal of certain LPTR
stage 4 disks and LPTR stage 6 disks
from service and replacement with parts
eligible for installation. The FAA is
issuing this AD to address the unsafe
condition on these products.
Discussion of Final Airworthiness
Directive
Comments
The FAA received one comment, from
The Boeing Company (Boeing). Boeing
concurred with the contents of the
NPRM.
Conclusion
The FAA reviewed the relevant data,
considered the comment received, and
determined that air safety requires
adopting the AD as proposed.
Accordingly, the FAA is issuing this AD
to address the unsafe condition on these
products. Except for minor editorial
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