Debt collection compliance remains in a state of flux. While federal oversight remains a constant, we are seeing a surge in state level legislative activity that creates a complex, multi-layered compliance environment. State and local compliance and regulatory updates are having a more direct impact on how businesses run their strategies.
While industry professionals are used to navigating the changing compliance landscape, some newer factors are making it uniquely challenging. To help you start 2026 smart, we’ve put together the most important compliance trends to stay on top of to help set your digital debt collections up for success.
Telephone Consumer Protection Act Updates and Uncertainty
The Telephone Consumer Protection Act (TCPA) is primed to have a big role in debt collection compliance this year. For starters, the new “revoke all” rule had its waiver extended by the FCC until January 2027. This new rule makes it so if a consumer replies “stop” or opts out by text message, the collector would have to stop texts, calls, and prerecorded messages to that number. One of the reasons this was delayed is because some financial institutions successfully argued that they would need more time to sync opt outs across channels and business units.
It’s important for debt collectors to keep an eye on when the “revoke all” rule will go into effect. The other rules of TCPA such as honoring keyword-based opt outs (like saying “cancel” instead of “stop”) are not impacted. This extension is a reminder to collectors who are using an omnichannel strategy to make sure their backend systems are prepared to stop communications across channels.
The Debate of if A Text Message Considered a Phone Call Under TCPA
One big debt collection compliance trend to follow is if text messages are considered phone calls under TCPA. This has become a recent point of legal contention. Historically, the FCC has argued that text messages are “calls” which means they would have to follow TCPA restrictions. Following the Supreme Court’s decisions in Loper Bright (2024) and McLaughlin v. McKesson (2025), courts are no longer required to defer to the FCC’s interpretations. This led to the legal distinction being ruled on more by federal courts.
There has recently been a developing split in federal courts regarding whether Do-Not-Call restrictions extend to SMS, making jurisdiction-specific strategies essential. For example, a Florida court dismissed Do-Not-Call claims ruling that a “text message” is not a “phone call” in Davis v. CVS Pharm., Inc. (2025).This court expressed how a normal person thinks of a text message and a phone call as two separate forms of communication. Another court in Ohio ruled similarly in Stockdale v. Skymount Prop. Grp, LLC (2026).
The TCPA landscape is a bit hectic and time will tell how courts will view debt collection text messages in the future. This topic is a developing area of collection compliance that could shift back and forth before a concrete precedent is set.
New York’s FAIR Business Practices Act & Digital Debt Collections
In December of 2025, New York State signed into law the FAIR Business Practices Act. This law specifically expanded the power of the state’s Attorney General to target “abusive” acts along with “deceptive” actions that target consumers. It’s a law that is looking to step in for the diminished CFPB and debt collectors fall into its purview.
There is one element of this law that digital debt collection strategies need to be aware of. To protect consumers, the FAIR Business Practices Act is looking to limit “digital exhaustion”. This is the coined term for when a business inundates a consumer with messages across digital communication channels. Since digital communications don’t always fall under the 7 in 7 rule (depending on the state), this legislation could set a new standard for the acceptable frequency of digital communications.
AI Governance and Transparency Becoming Standard
AI has reached widespread adoption in the debt collection and finance industries, with many businesses using it to optimize their recovery strategies. However, a new focus from regulators is on businesses being able to show how AI arrived at a decision. This makes “explainability logs” more critical than ever for AI tools.
AI tools used in the debt collection industry are also facing increased requirements to run algorithm impact assessments (AIAs). An AIA is a way to prove that AI technology is ethically and fairly making decisions about consumers. This type of AI governance and transparency is becoming the standard for many state level regulations.
The Colorado AI Act & Digital Debt Collection
The Colorado Artificial Intelligence Act (CAIA), is set to take effect on June 30th, 2026. This legislation sets strict regulations for “high-risk” businesses, which debt collection falls into. Even if you don’t do business in Colorado, this one is worth watching as it may provide a blueprint that other states follow. Here’s a list of the some major compliance requirements that will go into effect with this law in Colorado:
- Companies have to create an AI risk management program to help prevent discrimination.
- Annual AI impact assessment will be required which needs to include risks of bias.
- A business has to notify the Colorado Attorney General if an AI action causes discrimination within 90 days.
- You have to disclose to consumers that they’re interacting with an AI system.
To help prepare for these new compliance rules, businesses should be testing their AI for potential discriminatory outcomes. Another best practice is to create a list of all the AI and/or automated tools used by a business to streamline internal training and reviews.
Stay Ahead of Digital Collections Compliance with Retain
Retain white-label debt collection software is built with advanced compliance controls. Plus, it gets support from an expert legal team to help your business stay ahead of compliance and regulatory updates. If you want to recover more while spending less, find the right SaaS solution with the Retain team today.
