Author Topic: SCOTUS dubious about reading FDCPA to reach Debt Buyers  (Read 1385 times)

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biffster7199

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Re: SCOTUS dubious about reading FDCPA to reach Debt Buyers
« Reply #15 on: April 21, 2017 04:55:29 AM »
Furthermore, JDBs DO NOT extend credit to the borrower so, they are , in essence, a "holder" of a debt obligation not a creditor. I would be most curious if Santander ever registered as a debt collector in the state in question or any other state that requires debt collectors to register/have a license.  Finally, if the Supreme Court does rule that Santander and other JDBs (especially those lacking federal banking charters) are NOT debt collectors, tehn will various states start requiring JDBs to be licensed as lending companies?

biffster7199

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Re: SCOTUS dubious about reading FDCPA to reach Debt Buyers
« Reply #16 on: April 21, 2017 04:58:54 AM »
 Valuable information you posted Bellebutton.  I was typing another thought while you were posting. Based on what you just posted, wouldn't a JDB's  "principal purpose" be to COLLECT a debt and NOT to extend credit therefore under subsection "a" the would qualify as a debt collector. Your thoughts?

biffster7199

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Re: SCOTUS dubious about reading FDCPA to reach Debt Buyers
« Reply #17 on: April 21, 2017 05:05:21 AM »
One last point SPECIFIC to this case. Whereas the principal purpose of Santander may be to extend credit to individuals; in cases such as the one being litigated, I would think the plaintiffs could argue that , again, in these particular purchases, Santander is acting as a debt buyer (holder) with NO INTENTION of extending credit to the debtor, unlike, say, Citi, who for many years bought the credit card operations of many Retail Stores, WITH THE INTENT of continuing to extend credit to said credit card holders. Just my two cents ;)  (it's all I've got!! :o))  ) 

Jane007

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Re: SCOTUS dubious about reading FDCPA to reach Debt Buyers
« Reply #18 on: April 21, 2017 05:20:45 AM »
Here's the problem:

• any person who regularly collects debts owed to another (regularly collects test);

JDBs are not collecting debts "owed to another".

I personally believe that debt buyers are debt collectors.  But based upon the fact that debt buyers are not collecting for anyone else, it could be ruled that they do not pass the principal purpose test.
I understand what you're saying. It is a big problem for the borrowers in this case.*

This is why I said that a pure textualist interpretation of the statute could spell doom for the borrowers in this case and consumers in general.  When I say "pure textualist interpretation", I mean not at all looking beyond the text and not at all looking into the intent behind the text and applying that intent to an unforeseen market change. This includes looking to the circuit court attempts to address debt buyers consistent with the FDCPA; all of these attempts are outlined well in the ABA article starting at the paragraph "A Circuit Split Nevertheless Arose".

"Unlike debt collectors, creditors have a “desire to protect their good will when collecting past due accounts,” which acts as an intrinsic restraint against abusive behavior. S. Rep. No. 95-382, at 2 (1977)"

So, do debt buyers have a desire to protect their good will when collecting past due accounts, which acts as an intrinsic restraint against abusive behavior?

Like you say, the outcome will be interesting.

*I'm only about half-way through reading all the supporting briefs in this case.
« Last Edit: April 21, 2017 05:33:21 AM by Jane007 »

BellEbutton

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Re: SCOTUS dubious about reading FDCPA to reach Debt Buyers
« Reply #19 on: April 21, 2017 05:21:50 AM »
Valuable information you posted Bellebutton.  I was typing another thought while you were posting. Based on what you just posted, wouldn't a JDB's  "principal purpose" be to COLLECT a debt and NOT to extend credit therefore under subsection "a" the would qualify as a debt collector. Your thoughts?

Well, the FDCPA's definition of "creditor" is " any person who offers or extends credit creating a debt or to whom a debt is owed". 

That "or" might make a difference.


biffster7199

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Re: SCOTUS dubious about reading FDCPA to reach Debt Buyers
« Reply #20 on: April 21, 2017 05:28:21 AM »
Bravo to both of you: Jane007 and BellEbutton; good points by both of you IMHO. I'm going to have to reread the amended FDCPA myself!

fisthardcheese

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Re: SCOTUS dubious about reading FDCPA to reach Debt Buyers
« Reply #21 on: April 21, 2017 06:07:17 AM »
Even if SCOTUS makes the worst ruling for consumers in this case, there will still be questions and possible FDCPA actions applicable to JDBs.  The reason is that most of the large JDBs have multiple arms.  We simply call it "midland" here, but "Midland Funding LLC" is the JDB, while "Midland Credit Management" is the collector.  The same holds true for most others.

It's a big assumption that SCOTUS will even rule a certian way, but if they did, it looks like MCM (and similar arms of other JDBs) would still be held accountable under the FDCPA.
11 Arb Settlements (9 AAA, 2 JAMS)
3 JDB Suits Dismissed With Prejudice (2 pro-se, 1 consumer atty)
3 TCPA Settlements (2 pro-se, 1 consumer atty)
2 FCRA Settlements (consumer atty)
1 FDCPA Settlement (w consumer atty)
1 Small Claims Win (pro-se; Landlord/state consumer law violations)
1 State UDAP Settlement (ITS)
1 Federal PTC Settlement (before hearing; pro-se)

Jane007

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Re: SCOTUS dubious about reading FDCPA to reach Debt Buyers
« Reply #22 on: April 21, 2017 07:30:25 AM »
Even if SCOTUS makes the worst ruling for consumers in this case, there will still be questions and possible FDCPA actions applicable to JDBs.  The reason is that most of the large JDBs have multiple arms.  We simply call it "midland" here, but "Midland Funding LLC" is the JDB, while "Midland Credit Management" is the collector.  The same holds true for most others.
I agree.  Currently, "Midland Funding, LLC" assigns accounts for "servicing" to "Midland Credit Management" for pre-suit (or pre-arbitration) collection efforts.  "Cavalry SPV I, LLC" does the same using "Cavalry Portfolio Services, LLC".  As do many others.

Following a "worst ruling", even if these legal entities continue to exist as they do now, the potential for violations may be somewhat reduced to the period when these servicing entities are servicing the account for "another" (the buyer/owner/creditor/whatever).

But do these  legal entities have to be arranged as they are now?  I'm not sure of all the benefits of the structure of these legal entities.  They also often serve as the testimony entity during trials.  But if Midland Funding, LLC could eliminate all potential FDCPA liability by rejiggering their corporate structure and bringing all these functions under the ownership umbrella, why wouldn't they?
 
It's a big assumption that SCOTUS will even rule a certain way
Yes. Hopefully we won't have to speculate for all that long.

Bruno the JDB Killer

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Re: SCOTUS dubious about reading FDCPA to reach Debt Buyers
« Reply #23 on: April 21, 2017 02:10:34 PM »
Congress could fix this in one day. Simply remove  the words "due another" from the statute and apply the FDCPA to anybody who collects a debt period. To do otherwise is to give one group of lenders free reign to violate the statute while others are held to it.

If SCOTUS doesn't see that and rules for the JDBs, they have effectively repealed the statute when they do not have that authority. All the JDBs would have to do is use "in house" collectors to get by the FDCPA. SCOTUS should look to Congressional intent rather than parsing an entire statute down to two words.

If these are publicly held companies, as some are, aren't they collecting for a third party, mainly the stockholders?
I am not an attorney. Any information I post is strictly my opinion and should be treated as such.

11181986

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Re: SCOTUS dubious about reading FDCPA to reach Debt Buyers
« Reply #24 on: April 21, 2017 02:38:31 PM »
Congress could fix this in one day.

You have a Congress and President who are extremely anti-consumer. There is a better chance of Congress repealing the FDCPA than fixing this "in one day."

biffster7199

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Re: SCOTUS dubious about reading FDCPA to reach Debt Buyers
« Reply #25 on: April 21, 2017 07:32:23 PM »
@118...  Yup, I fear you are right. Let's remember that the current occupant of the Whitehouse has called for the ELIMINATION of the CFPB - somehow that doesn't sound like something that would come from the mouth of a President who CLAIMS to be "for" the middle working class :/

Flyingifr

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Re: SCOTUS dubious about reading FDCPA to reach Debt Buyers
« Reply #26 on: April 21, 2017 07:40:11 PM »
Until one party or the other gets 60 votes in the Senate I wouldn't count on this Congress, or any other Congress, to do much of anything.
BTW-the Flyingifr Method does work. (quoted from Hannah on Infinite Credit, September 19, 2006)

I think of a telephone as a Debt Collector's crowbar. With such a device it is possible to pry one's mouth open wide enough to allow the insertion of a foot or two.

Debtors Exams are the perfect place for us Senior Citizens to show off our recently acquired Alzheimers.

Founder of the Credit Terrorist Training Camp (Debtorboards)

Jane007

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Re: SCOTUS dubious about reading FDCPA to reach Debt Buyers
« Reply #27 on: April 21, 2017 09:05:56 PM »
Until one party or the other gets 60 votes in the Senate I wouldn't count on this Congress, or any other Congress, to do much of anything.
That's right. Although I think many of the attempts to neuter the CFPB will pan out, because enough of the minority is also bought off.

Towards the end of the last administration, there was proposed rule-making within the CFPB concerning payday lenders.  The debate was ongoing through the new administration up until about last month.

One way to end the debate (within the CFPB) about payday lenders is to introduce this: choice_2.0_discussion_draft.pdf . Because it strips the CFPB of all authority over payday lenders. This draft was introduced two days ago and has bipartisan support.

kevinmanheim

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Re: SCOTUS dubious about reading FDCPA to reach Debt Buyers
« Reply #28 on: April 22, 2017 10:06:11 AM »
The bankers never lose.

Don't fool yourself into believing otherwise.

Once you accept this reality, it becomes easier to deal with the system as it exists.

Admin0248

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Re: SCOTUS dubious about reading FDCPA to reach Debt Buyers
« Reply #29 on: April 22, 2017 11:50:13 PM »
A warning to all:

Please do not allow this thread to devolve into a POLITICAL discussion.

If it does, the thread will be closed and removed from the board.