On September 7, the Financial Services Committee held hearings on a bill, H.R. 1849: Practice of Law Technical Clarification Act of 2017 (Trott), that seeks to amend the Fair Debt Collection Practices Act.
The current definition of “debt collector” under the FDCPA does not make clear whether it applies to attorneys, especially in the context of judicial proceedings and related communications. In Heintz v. Jenkins, 514 U.S. 291 (1995), the United States Supreme Court interpreted this term to apply to attorneys even when making court filings. The Bill introduced earlier this year seeks to narrow the definition of “debt collector” by exempting “law firms and licensed attorneys to the extent such firm or attorney is: (i) serving, filing, or conveying formal legal pleadings, discovery requests, or other documents pursuant to the applicable rules of civil procedure; or (ii) communicating in connection with a legal action to collect a debt on behalf of a client in, or at the direction of, a court of law (including in depositions or settlement conferences) or in the enforcement of a judgment.
During the hearings, proponents of the Bill explained its purpose, that is, “a technical correction [of the FDCPA] to clarify that there is no liability under the FDCPA when you are litigating.” Unsurprisingly, the opponents—in particular, the National Consumer Law Center that presented both written and live testimony—maintained that such amendment would “eradicate essential protections against abusive and deceptive debt collection practices by collection attorneys.”
If passed, the bill will bring long-awaited clarity for attorneys who engage in collection activities through legal proceedings.