Sending Office: Honorable Vicente Gonzalez
Sent By:
Fred.Castro@mail.house.gov

 

Request for Cosponsor(s)

Dear Colleague;

I am writing to ask your support for my amendment to H.R. 4550 (the Practice of Law Technical Clarification Act), a bill that Representative Alex Mooney (R-WV) and I have jointly sponsored. The bill will soon come before the Committee for markup.  Our goal
is to restore traditional state court regulation and oversight of the legal profession by amending the Fair Debt Collection Practices Act (FDCPA) to exclude law firms and licensed attorneys
only while engaged in litigation activities from the definition of a “debt collector.” The amendment preserves liability for attorneys and firms who engage in debt collection in a prohibited manner pre-litigation.  It would also amend the Consumer
Financial Protection Act of 2010 to further clarify that the Consumer Financial Protection Bureau (CFPB) shall no longer exercise supervisory or enforcement authority with respect to creditor attorneys when they are engaged in litigation activities. This is
a very narrowly tailored exception meant to keep the Federal Government out of a position of oversight for the practice of law, and courtroom conduct.

Since its enactment in 1977, there has been long running debate as to whether the FDCPA should apply to attorneys’ conduct in debt collection litigation,
most of which occurs in state court.  Because the FDCPA originally exempted attorneys, a small number of creditors and other owners of debts responded by placing their accounts with certain unscrupulous law firms instead of with non-attorney
debt collectors.  These law firms could engage in deceptive and abusive collection practices without risk of liability under the FDCPA – hearings on the problem cited attorneys using abusive tactics like calling at all hours of the night.  As a result, the
Congress acted in 1986 to protect consumers from the growing harm attributable to this activity by rescinding the attorney exemption.  Congress
did not however cite to problems in attorney litigation conduct to support its decision to revoke the exemption.

When Congress amended the FDCPA in 1986 to remove the original attorney exemption, the bill’s sponsor, Rep. Frank Annunzio (D-IL), explained that the purpose of the change was to regulate only attorneys’ non-litigation collection activities.  Despite
the sponsor’s clear intent
, courts have applied the FDCPA to creditor attorneys even when they are engaged in litigation activities under the watchful eye of the trial judge. This has resulted in a large number of FDCPA lawsuits being filed against small
law firms that are simply utilizing the court system in a legitimate effort to recover unpaid bills owed to local businesses.  Every year between 1998 and 2006, the Federal Trade Commission also recommended that the FDCPA be clarified to exempt creditor attorneys
engaged in litigation.

Under the current system, many creditor attorneys pursuing legitimate and authorized collection actions for clients in state court are routinely sued
in federal court for technical violations of the FDCPA, resulting in harsh statutory penalties and attorney fees.
The American Bar Association and the National Creditors Bar Association are both strongly supporting this bill.

The bill is not “anti-consumer,” it would not create a broad exemption for attorneys’ non-litigation debt collection activities.  Instead it simply reaffirms that
state courts and the judges overseeing collection lawsuits, not the CFPB or other agencies, are in the best position to regulate attorneys engaged in the practice of law.  Attorneys practicing law have long been regulated primarily by the highest
court of the state in which the attorney is licensed, not federal agencies or Congress.  Over time, an extensive and effective system of judicial regulation of attorneys has developed—including admission requirements, ethical codes and disciplinary rules—which
govern virtually every aspect of an attorney’s professional life.  As “officers of the court,” attorneys are subject to strict ethical rules and disciplinary action for any misconduct, including potential suspension or disbarment.

The amendment and supporting documents can be viewed here. Click

If you have any questions regarding the details of this bill, or concerns before the mark up, please contact Fred Castro at 225-2531 or
Fred.Castro@mail.house.gov.  Thank you in advance for your consideration.

Sincerely,

 

Vicente Gonzalez

Member of Congress

Related Legislative Issues
Selected legislative information: Consumer Affairs, Finance
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