Congress is considering a bill that has been titled a “technical clarification” for the practice of law. Sounds quite innocent and humdrum, doesn’t it? But the true aim of the bill is much worse. It intends to shield debt collection lawyers from the very laws that outlaw unfair debt collection practices.
This bill, called the Practice of Law Technical Clarification Act of 2017 is not what it sounds like. It is a blatant attempt to give a free pass to debt collectors who happen to be lawyers.
Currently, federal law prevents a variety of unfair debt collection practices. This includes debt collection activity during a lawsuit or collection of a legal judgment. That law is called the Fair Debt Collection Practices Act, or FDCPA, and it was last amended in 2010.
This proposed technical clarification bill would end all that. It would carve out an exception from the FDCPA for debt collection lawyers engaged in certain “litigation activity.” In other words, lawyers who break the FDCPA while suing consumers wouldn’t get penalized.
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In a double whammy, this bill would also eliminate the power of the Consumer Financial Protection Bureau to regulate lawyers in certain legal proceedings. That bureau is America’s “cop on the beat” for consumers. Essentially, this bill would ban the bureau from investigating litigation abuse, when consumers need help in courts now more than ever.
In the past decade, there has been an explosion of debt collection litigation. In that same period, FDCPA claims by consumers have increased. It’s no accident that more rules get broken as more debt lawsuits are filed.
The FDCPA a good tool to punish and deter debt collection violations that occur during debt collection lawsuits. But if this free pass for lawyers becomes law, then the results seem clear. There will be more deception, abuse, and confusion for the cash-strapped consumers who get sued on old debts.
Being the dignified group that it is, one would think the American Bar Association, or ABA, would support the FDCPA. After all, shouldn’t the existing law act as a bare minimum standard for lawyers? Instead, the ABA supports this bill to carve out an exception for lawyers. One can only conclude the ABA favors giving debt collection lawyers immunity from laws that protect the public interest. How disappointing.
Proponents of the bill, including the ABA, emphasize that the FDCPA is a burden for lawyers who are suing on debts. But the court system already gives lawyers a huge built-in advantage. Without limits from the FDCPA, collection lawyers would have free rein in courthouses throughout the country to pursue consumers with near impunity.
Perhaps the ABA and debt collection lawyers who support this idea believe lawyers who use courts to collect debt are somehow different from other debt collectors. This position reminds me of George Orwell’s classic tale, “Animal Farm.” On Animal Farm, “all animals are equal, but some animals are more equal than others.”
Napoleon the pig would be impressed by the doublespeak being used here. The debt collection lobby has proposed a “technical clarification” to create a “narrow exception” for lawyers in litigation. If you ask consumers who are sued or garnished by debt collectors, that exception for lawyers won’t seem so narrow.
If we are being honest, three truths emerge: Fair debt collection laws keep the debt collection system (including the courts) in balance. Debt collection lawyers aren’t “more equal” than all other debt collectors. And lawyers, in general, don’t need this free pass.
Terry Lawson is a consumer protection and debt defense attorney in Kansas City. He is also the current Missouri state chair of the National Association of Consumer Advocates.