Bill to Exclude Law Firms and Licensed Attorneys from the FDCPA Definition of “Debt Collector” Introduced in Senate

On May 13, 2014, S. 2328 was introduced into the Senate by Senator Pat Toomey (R-PA). The legislation seeks to amend the Fair Debt Collection Practices Act (“FDCPA”) to preclude law firms and licensed attorneys from the definition of a debt collector when taking certain actions. The bill is identical to that of House Bill HR 2892- the “Fair Debt Collection Practices Technical Clarification Act of 2013,” which was introduced last summer by Representative Ed Perlmutter (D-CO) with a co-sponsor Representative Spencer Bachus (R-AL). 

Both initiatives seek to amend the FDCPA definition of “debt collector” by excluding any licensed attorney or a law firm who is:

1)  Serving, filing, or conveying formal legal proceedings, discovery requests, or other documents pursuant to the applicable rules of civil procedure; or

2)  Communicating in, or at the direction of, a court of law or in depositions or settlement conferences, in connection with a pending legal action to collect a debt on behalf of a client.

Several consumer groups, including the National Consumer Law Center, sent correspondence to Members of the Banking Committee urging them to oppose S. 2328 alleging it would open “the floodgates” of abusive debt collection practices by attorneys. The bill has gained significant support in the collection industry, however, including support from the National Association of Retail Collection Attorneys (“NARCA”), which has encouraged attorneys and law firms involved in debt collection to support the S.2328 bill by sending letters to their respective Senators.

For more information on the legislation, FDCPA and debt collection related matters you may contact Nicole Strickler of Messer Strickler, Ltd. at (312) 334-3442 or at nstrickler@messerstrickler.com