The appeals court decision indicating that the firm is not defined as a debt collector under the FDCPA in this case should be affirmed, the amicus brief states.
The Bureau of Consumer Financial Protection filed an amicus brief with the U.S. Supreme Court supporting that a law firm hired by a mortgage company after a consumer defaulted on a loan is not defined as a debt collector as outlined in the Fair Debt Collection Practices Act.
In June 2018, the Supreme Court granted certiorari in the case, Obduskey v. McCarthy & Holthus LLP, to determine whether nonjudicial foreclosure proceedings and those who are involved in them are subject to the FDCPA, ACA International previously reported. (Members may read more background on this case on the Industry Advancement Fund website.)
The Supreme Court granted the certiorari “to review the Tenth Circuit’s decision and resolve a circuit split on whether the FDCPA applies to nonjudicial foreclosure proceedings,” according to The National Law Review.
The bureau’s brief states, “initiating a nonjudicial-foreclosure proceeding generally does not constitute debt collection under the FDCPA.”
The National Law Review notes that brief in Obduskey v. McCarthy & Holthus LLP significantly supports the industry’s position. (See ACA International’s report on a BCFP amicus brief filed in the Seventh Circuit here.)
“Because the Supreme Court’s decision in Obduskey will determine whether the FDCPA’s protections apply in countless nonjudicial foreclosure actions, it could have a significant financial impact on the mortgage industry,” according to the article.
The National Law Review also reports, “The CFPB asserts that deeming the initiation of a nonjudicial foreclosure proceeding to be debt collection ‘could bring the FDCPA into conflict with state law and effectively preclude compliance with state foreclosure procedures. No sound basis exists to assume Congress intended that result.’”
Read the complete article from The National Law Review here and ACA International will continue to follow this story and provide updates in ACA Daily.
Related Content from ACA International:
Supreme Court to Decide Whether the FDCPA Applies to Non-Judicial Foreclosure Proceedings (Available to ACA International members only.)
Seventh Circuit Emailed Validation Notice Case Forces Tip-Off between ACA International and the BCFP
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