MA Division of Banks Publishes Regulations for Debt Collection and Loan Servicing

The Massachusetts Division of Banks has finalized amendments to its regulations governing the conduct of debt collectors and third-party loan servicers.  

For third-party loan servicers, the amendments mandate several steps related to loss mitigation and foreclosure.  Servicers are required to establish procedures for evaluating borrowers for loss mitigation options, provide written acknowledgment of all loan modification documentation received, and conclude the loan modification process before any foreclosure proceedings are initiated.  The new rules also enhance communication, requiring servicers to provide borrowers with direct contact information for a designated individual, and maintain accurate, timely procedures for posting payments and imposing any fees on a borrower’s account.

The final amendments also place new restrictions on the communication methods used by debt collectors.  Debt collectors are prohibited from causing expense to any consumer—such as imposing telephone call or text message charges, data usage fees, or download fees—unless the consumer has provided express permission for that manner of communication.  The regulations further clarify that debt collectors may place non-collect calls to a consumer’s cell phone if the consumer provided that number as their personal telephone contact.

The new regulations became effective on September 26, 2025.