House Subcommittee Considers Legislation to Amend FDCPA and the Consumer Financial Protection Act Regulations of Debt Collection Attorneys


9/7/2017 8:15:00 PM

The Practice of Law Technical Clarification Act, sponsored by U.S. Rep. Dave Trott, was among several bills reviewed during a hearing on “Legislative Proposals for a More Efficient Federal Financial Regulatory Regime.”

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The House Financial Services Subcommittee on Financial Institutions and Consumer Credit, during a hearing on Thursday, discussed legislation that would amend the Fair Debt Collection Practices Act to exclude law firms and licensed attorneys who are engaged in activities related to legal proceedings from the definition of debt collector.

The bill also amends the Consumer Financial Protection Act of 2010 to prevent the Consumer Financial Protection Bureau from exercising supervisory or enforcement authority with respect to attorneys when undertaking certain actions related to legal proceedings.

The Practice of Law Technical Clarification Act of 2017, H.R. 1849, is sponsored by U.S. Rep. Dave Trott, R-Mich., a former owner of a debt collection law firm and member of the House Financial Services Subcommittee on Financial Institutions and Consumer Credit in the 115th Congress.

“This limited targeted and common-sense bill clarifies that attorneys engaged in litigation should not be subject to interference by federal agencies,” Trott said in his opening remarks. “We must protect the system against any attempts to tip the scales of justice by interference with our independent judiciary.”

Speaking in support of the legislation during the hearing, Anne Fortney, partner emerita at Hudson Cook LLP, stressed the dichotomy between debt collection and practicing law.

“This is especially true when an attorney is filing a lawsuit on behalf of a client engaged in litigation,” Fortney, a former associate director for credit practices at the Federal Trade Commission’s Bureau of Consumer Protection, said. “Preparing documents for litigation and communicating in connection with the litigation are very different activities from sending dunning letters and calling debtors. In addition, attorneys in litigation are subject to standards of conduct overseen by local courts and any state bar while a debt collector is not. For these reasons, the FDCPA originally exempted these attorneys from this coverage.”

ACA maintains that this bill is important to ensure that federal regulators do not impermissibly use their authority to regulate the practice of law, an authority that is properly left to the judicial branch. This bill is particularly critical to put a stop to the CFPB’s unauthorized overreach into the practice of law, a strategy that has substantially harmed debt collection attorneys.

ACA International will continue to monitor this legislation and keep members apprised of any updates.

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