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1/2/21 – CFPB issues Debt Collection Rule – Small Entity Compliance Guide


The first comprehensive federal debt collection regulations interpreting the Fair Debt Collection Practices Act (FDCPA) take effect November 30, 2021. This article summarizes new Consumer Financial Protection Bureau (CFPB) Regulation F with links to free resources providing additional detail on the new regulations. New Regulation F provides new consumer rights but also is likely to lead to new consumer abuses. As with the FDCPA, the regulations apply to debt collectors as defined by the FDCPA, which generally includes debt collection agencies, collection attorneys, debt buyers, and mortgage servicers that obtained the account in default, and generally excludes original creditors.


The first comprehensive federal debt collection regulations interpreting the Fair Debt Collection Practices Act (FDCPA) take effect November 30, 2021. This article summarizes new Consumer Financial Protection Bureau (CFPB) Regulation F with links to free resources providing additional detail on the new regulations. New Regulation F provides new consumer rights but also is likely to lead to new consumer abuses. As with the FDCPA, the regulations apply to debt collectors as defined by the FDCPA, which generally includes debt collection agencies, collection attorneys, debt buyers, and mortgage servicers that obtained the account in default, and generally excludes original creditors.

McAdory v. M.N.S. & Associates, LLC 9th Cir. Ct. Appeals, March 9, 2020 – 18-35923 – Fair Debt Collection Practices Act. Reversing the district court’s dismissal of an action under the Fair Debt Collection Practices Act and remanding, the panel held that a business that bought and profited from consumer debts, but outsourced direct collection activities, qualified as a “debt collector” subject to the requirements of the Act. Joining the Third Circuit, the panel held that an entity that otherwise meets the “principal purpose” definition of debt collector under 15 U.S.C. § 1692(a)(6) (defining debt collector as “any business the principal purpose of which is the collection of any debts”) cannot avoid liability under the FDCPA merely by hiring a third party to perform its debt collection activities. Dissenting, Judge Bea wrote that the complaint failed to allege that defendant acted directly in any way to violate plaintiff’s rights under the FDCPA; plaintiff did not adequately allege that defendant’s “principal purpose” was the “collection of any debts;” and the word “collection” must, in context, describe the action of collecting.

HENSON ET AL. v. SANTANDER CONSUMER USA INC, No. 16–349. (US Supreme Court, argued April 18, 2017—Decided June 12, 2017)  A company may collect debts that it purchased for its own account, like Santander did here, without triggering the statutory definition in dispute. By defining debt collectors to include those who regularly seek to collect debts “owed . . . another,” the statute’s plain language seems to focus on third party collection agents regularly collecting for a debt owner—not on a debt owner seeking to collect debts for itself.

The Fair Debt Collection Practices Act authorizes private lawsuits and weighty fines designed to deter the wayward practices of “debt collector[s],” a term embracing anyone who “regularly collects or attempts to collect . . . debts owed or due . . . another.” 15 U. S. C. §1692a(6). The complaint filed in this case alleges that CitiFinancial Auto loaned money to petitioners seeking to buy cars; that petitioners defaulted on those loans; and that respondent Santander then purchased the defaulted loans from CitiFinancial and sought to collect in ways petitioners believe violated the Act. The district court and Fourth Circuit held that Santander didn’t qualify as a debt collector because it did not regularly seek to collect debts “owed . . . another” but sought instead only to collect debts that it purchased and owned.

But see – Tepper v. Amos Financial LLC, 17-2851 (3d Cir. Aug. 7, 2018) The Third Circuit jumped through a loophole the Supreme Court left open intentionally in Henson v. Santander Consumer USA Inc., 137 S. Ct. 1718 (2017), by holding a debt purchaser is subject to the federal Fair Debt Collection Practices Act, or FDCPA, if its principal business is the collection of debts.

Holzman v. Malcom S. Gerald & Associates Inc., 16-16511 (11th Cir. April 5, 2019) On a question where the circuits are split, the Eleventh Circuit sided with the majority and held that an attempt to collect a time-barred debt can state a plausible claim for violation of the federal Fair Debt Collection Practices Act, or FDCPA, 15 U.S.C. § 1692-1692p.

No Claim Under Section 1692f.

Section 1692e bars a debt collector from using “any false, deceptive or misleading representation or means in connection with the collection of any debts.” The section includes a nonexclusive list of prohibited conduct, including falsely representing the “legal status of any debts” and threatening “any action that cannot legally be taken or that is not intended to be taken.” Section 1692f bars use of “unfair or unconscionable means to collect or attempt to collect any debt.”

Judge Carnes upheld dismissal of the claim that a collection letter on a time-barred debt was a per se violation of Section 1692f. Although the section bars “unfair or unconscionable means” to collect a debt, she said that “courts generally have recognized that the FDCPA does not impose a bright-line rule prohibiting debt collectors from attempting to collect on time-barred debt.”


The first comprehensive federal debt collection regulations interpreting the Fair Debt Collection Practices Act (FDCPA) take effect November 30, 2021. This article summarizes new Consumer Financial Protection Bureau (CFPB) Regulation F with links to free resources providing additional detail on the new regulations. New Regulation F provides new consumer rights but also is likely to lead to new consumer abuses. As with the FDCPA, the regulations apply to debt collectors as defined by the FDCPA, which generally includes debt collection agencies, collection attorneys, debt buyers, and mortgage servicers that obtained the account in default, and generally excludes original creditors.

Collecting a debt paid in full through chapter 13:

In re Manikan v. Peters & Freedman, LLP,  19-55393 (9th Cir Ct. Appeals, 11/25/20)  Debtor paid pre-petition HOA dues through chapter 13 plan.  HOA filed a notice that pre-petition arrears paid, Trustee filed notice of Final Cure Payment.  Post discharge the HOA’s law firm attempted to collect on the pre-petition debt.

Conclusion: Manikan’s FDCPA claims are based on the wholly independent ground of full payment; they are not premised on a violation of the discharge order. Thus, we conclude that Walls and our discussion in that case about preserving the balance Congress struck in giving the bankruptcy court plenary authority to enforce its discharge orders does not apply here. Accordingly, the district court’s grant of summary judgment is REVERSED and REMANDED for further proceedings.

Non-Judicial Foreclosure:

OBDUSKEY v. MCCARTHY & HOLTHUS LLP  US Supreme Court – No. 17–1307. Argued January 7, 2019—Decided March 20, 2019 The Supreme Court ruled unanimously today that nonjudicial foreclosure is not subject to regulation by the federal Fair Debt Collection Practices Act, known as the FDCPA, 15 U.S.C. § 1692-1692p.

The opinion for the Court by Justice Stephen G. Breyer contained an important caveat: Nonjudicial foreclosure is exempt from the FDCPA only with regard to actions required by state law.

FACTS: After a homeowner defaulted on his mortgage, the lender hired a law firm, which gave notice that it was retained to conduct nonjudicial foreclosure under Colorado law. The homeowner sent with a letter demanding the the debt collector stop collection activities until they receive a “verification of the debt.” (FDCPA Section 1692(g)).  Law firm moved forward with non-judicial foreclosure; homeowner filed lawsuit alleging violation of the FDCPA.

The district court dismissed the suit, finding that the law firm was not a “debt collector” within the purview of the FDCPA. The Tenth Circuit affirmed, holding that merely enforcing a security interest through nonjudicial foreclosure is not governed by the FDCPA.

  • Jaras v. Equifax Inc., 17-15201 (9th Cir. March 25, 2019) In five consolidated appeals, the plaintiffs alleged that the major credit reporting agencies violated the FCRA and its California counterpart by refusing to change how some debts were reported in view of the confirmation of their chapter 13 plans. The district court reached the merits and dismissed the complaints because the reports were not inaccurate.The majority based its opinion on Spokeo Inc. v. Robins, 136 S. Ct. 1540 (2016), and the Ninth Circuit’s treatment of the case after remand from the Supreme Court.In Spokeo, the high court held that alleging a violation of a statutory right by itself will not establish constitutional standing without alleging an injury-in-fact.On remand, the Ninth Circuit ruled there was a sufficiently concrete injury to justify Article III standing because the reporting agency misrepresented the plaintiff’s age, marital status, education and profession. Robins v. Spokeo Inc., 867 F.3d 1108, 1111 (9th Cir. 2017). The appeals court said that the misrepresentations “were more material than a zip code error,” an example given by the Supreme Court for an allegation that would not show concrete injury.In Juras, the majority found the complaints inadequate because the plaintiffs “gave no indication that they had tried to engage in or were imminently planning to engage in any transactions for which the alleged misstatements in their credit reports made or would make any material difference.” “The absence of allegations that Plaintiffs have suffered or imminently will suffer a concrete injury compels dismissal of the Complaints for lack of standing.” Nonetheless, the majority said, dismissal “should be without prejudice.”

Reprint from The Detroit News –


Debt collection was the top complaint among Michigan consumers in 2018, Attorney General Dana Nessel’s office announced Monday.

To recognize National Consumer Protection Week, her office released a top 10 list compiled by analyzing the nearly 9,000 written complaints filed last year, when the department recovered more than $1.6 million in consumer refunds, forgiven debts and state recoveries.

The highest-ranking categories were:

1. Credit and Financial Concerns: The top category since 2006 and covering areas including credit repair, payday lending, and mortgage brokering. The AG’s Office fielded 911 complaints in 2018 and about half stemmed from credit reporting and collection.
2.    Telecommunications, cable, and satellite TV: Although moving up from No. 3 the year before, complaints involving robocalls, telemarketing, wireless communications, and cable and satellite TV services were down more than 10 percent in 2018, the state said.
3.    Motor vehicles and automobiles: Complaints against used-car dealers continue to top the category, with others involving motor vehicles and car bodies, new car dealers and passenger car rentals.
4.    Internet: Nearly half of the complaints involved online purchases; some were filed against computer communication and internet service providers.
5.    Retail: Up from No. 6 last year, retail complaints included those about general merchandise, food and furniture stores, business services, and eating and drinking places.
6.    Contractors: Consumers filed 20 percent more complaints than in 2017 for issues such as residential building construction services, landscaping services, plumbing, heating and air condition services, and special trade contractors.
7.    Personal service providers: Complaints ranging from dating services and beauty shops to home security and tax preparation services dropped 43 percent from 2017, a year the state saw many complaints against western Michigan-based gym chain Family Fitness.
8. Landlord and tenant: This category had a 15 percent increase with nearly 500 complaints, most involving apartment owners and managers. Complaints against mobile home site operators and condominium associations accounted for about 10 percent each of the total complaints, the AG’s Office said.
9. Health service providers: Complaints involving health-service providers such as doctors, dentists, hospitals and medical clinics declined 7 percent last year.
10. Gasoline, fuel, and energy: The category remained steady in 10th place, with complaints against gasoline service stations as well as gas and electric services.

Steptoe & Johnson LLP – Jared R. ButcherMichael J. BaratzMolly Bruder Fox and Steven K. Davidson

Article Published in The Law Reviews The following is intended for educational use only.

Seizure and evidence

i Securing assets and proceeds

State law governs the procedure for securing assets, either before or after a judgment. Even if the litigation occurs in federal court, the federal rules provide that state law governs enforcement remedies. State laws are not uniform on these remedies. It is useful, however, to consider the example set by New York law because of New York’s status as a financial centre and its robust anti-fraud and pro-judgment enforcement regime.

Pre-judgment restraints of assets Pre-judgment attachment of assets

A claimant may seek pre-judgment attachment in state or federal court in aid of an impending litigation or arbitration even before any claims are filed. New York law expressly permits such an action, and in the federal courts, pre-judgment attachment is available to the extent permissible under state law. The substantive requirements for obtaining pre-judgment attachment are:

  1. the existence of a cause of action;
  2. a probability that the plaintiff will succeed on the merits;
  3. that any award will be rendered ineffectual without relief; and
  4. the amount demanded from the defendant exceeds all counterclaims known to the plaintiff.

The additional requirements ordinarily necessary for injunctive relief – irreparable harm and the balance of the equities tipping in the applicant’s favour – are not required to obtain an attachment, if the attachment is sought in aid of a foreign arbitration. If successful, a pre-judgment attachment order can be used to freeze assets belonging to or controlled by the defendant, so long as the assets are within the jurisdictional reach of the court.

Restraining notices

A restraining notice, when available, such as under New York law, can be a powerful enforcement tool. In contrast with attachment and garnishment orders – which are directed at specific property – a restraining notice is similar to an injunction and broadly restrains assets or debts belonging to the judgment debtor. Upon service of a restraining notice on a third party, all of a defendant’s property in the possession or thereafter coming into possession of the third party, as well as all debts then due or thereafter coming due, are subject to the restraining notice. A claimant can use this remedy in conjunction with either a pre-judgment attachment order or a final judgment for the purpose of restraining any assets held by the defendant or third parties.


Garnishment is a mechanism whereby a claimant can enforce the payment of a debt or claim by pursuing assets of the defendant in the possession of third parties. Garnishment is similar to attachment and is used where the assets to be attached are in the possession of someone other than the defendant. The use of garnishment may be particularly effective where a third party owes a debt to the defendant. The debt can be paid to the claimant, with the amount credited toward the outstanding balance of the unpaid claim or debt.


Replevin is an infrequently used remedy that a claimant may invoke to recover specific property that has been wrongfully taken by the defendant. Unlike the more common remedy of money damages, replevin seeks the return of the property itself. This remedy may be appropriate in situations where a defendant has wrongfully taken unique, high-value property. To obtain replevin, a claimant must show that the defendant possesses (either actually or constructively) a specific and identifiable item of personal property in which the claimant has a superior right of possession, that right being both immediate and not contingent on a condition precedent.


Sequestration may be available where a corporation fails to satisfy a judgment against it. A claimant may commence an action and obtain a court order sequestering the corporation’s property and providing for distribution thereof. All of the corporation’s creditors are entitled to share in the distribution. It should be noted that this remedy is only available to claimants with unsatisfied judgments upon proof that other judgment enforcement remedies have been exhausted.

Preliminary injunctions restraining assets

Injunctive relief in the United States is somewhat limited. Most notably, unlike in the United Kingdom and other jurisdictions, the Mareva injunction – a general, worldwide freezing order – has been expressly prohibited by a five-to-four decision of the United States Supreme Court in Grupo Mexicano de Desarrollo SA v. Alliance Bond Fund Inc. The Court held that a US federal court lacks the power to issue pre-judgment injunctions freezing a defendant’s assets in order to ensure their availability for a future judgment of money damages unless the claimant can demonstrate a legal or equitable interest in particular property. Thus, to obtain a pre-judgment restraint of a particular asset, a claimant must demonstrate some nexus between the subject funds or assets to be attached or otherwise restrained and the claim. Federal courts are without authority to issue any sort of worldwide freezing order restraining a defendant’s assets pending adjudication of a claim. As discussed immediately below, however, post-judgment remedies are far broader and do not require the same level of specificity; a general injunction against the judgment debtor and its assets will suffice.

Post-judgment enforcement Writ of execution

A money judgment is enforced by a writ of execution, unless the court directs otherwise. A writ of execution is the process by which a court aids a judgment creditor by seizing a judgment debtor’s non-exempt property or assets, up to an amount sufficient to satisfy the judgment. The writ of execution orders a duly authorized officer of the state – a US marshal, a sheriff or other agent acting under the colour of law – to seize real or personal property, sell it and transfer the proceeds (fewer costs).

The writ is available against third parties who are in possession of a debtor’s assets. In this circumstance, the debtor must be notified of the creditor’s intent to proceed against the assets. A third party who violates a writ, or otherwise assists the debtor to avoid execution thereof, may be held liable to the creditor for the value of any assets that were dissipated or otherwise made unavailable for execution of the writ.

Turnover orders

Post-judgment, turnover orders are particularly useful tools because they can require a judgment debtor to transfer and turn over to the judgment creditor enough assets to satisfy a judgment regardless of where those assets are located, potentially including assets located outside the United States. Turnover orders can also be directed to third parties, such as banks, who possess the defendant’s assets, as long as those third parties are subject to the court’s jurisdiction. The New York Court of Appeals has held that a turnover order directed at a third party is effective against specific property, even if that property is located outside New York or the United States. The precise reach of these orders remains an unresolved issue.


If a judgment is obtained by the claimant and remains unpaid, a receiver may be appointed by the court to take charge of assets in which the defendant has an interest. This remedy may be appropriate in situations where merely seizing and selling the assets is not workable. For example, a receiver may be appointed to manage distressed assets, collect rents due or arrange for liquidation of assets. In certain circumstances, a receiver can also be appointed before trial to preserve the status quo.

Invoking a court’s equitable powers for post-judgment enforcement

Even though a writ of execution is the primary means by which money judgments are enforced in the United States, federal courts have equitable powers to enforce judgments under ‘extraordinary circumstances’. Such relief is not common, perhaps because, as one court has observed, the ordinary ‘difficulties in enforcing the judgment due to the location of the assets and the uncooperativeness of the judgment debtor are not the types of extraordinary circumstances that warrant departure from the general rule that money judgments are enforced by means of writs of execution rather than by resort to the contempt powers of the courts’.

ii Obtaining evidence

US courts allow broad discovery in litigation. Information that is relevant or that may lead to the discovery of admissible evidence is ordinarily discoverable. Moreover, discovery from third parties is available by subpoena, which can be issued by the claimant’s attorney, although third parties are not expected to provide the same broad discovery required of the parties themselves.

Assuming the claimant obtains a judgment, additional discovery, including third-party discovery, is permitted in aid of judgment enforcement. A claimant may seek discovery from the defendant or third parties such as banks (where the defendant may keep cash and other assets). If the defendant is an entity, discovery may include its owners and subsidiaries in an effort to locate assets (or information leading to assets) that could be executed against. Notably, the United States’ Supreme Court has held that sovereign immunity does not restrict the normal post-judgment discovery available in United States courts, meaning that broad discovery should be available to claimants even if their judgments involve foreign sovereigns.

Objections to discovery include overbreadth, undue burden or expense, and privilege and privacy concerns. Privilege concerns allow the producing party to withhold documents and information entirely, subject to objection by the requesting party, which may be resolved by the court. Other objections can sometimes be resolved through the parties’ negotiation. If not, the requesting party may file a motion to compel production of the documents and information at issue.

The State of the Netherlands v. MD Helicopters, INC, CV 20-0112-PR (Az Supreme Court, 12/30/20) OPINION: Arizona’s version of the Uniform Foreign-Country Money Judgments Recognition Act, A.R.S. §§ 12-3251 to -3254 (“Act”), authorizes courts to recognize judgments originating from a foreign country with a “reciprocal law” that is “similar” to the Act. § 12-3252(B)(2). We are asked whether reciprocity requires a legislative act or if court decisions authorizing such procedures can be considered. We hold that court authorized procedures recognizing foreign-country money judgments in a manner similar to the Act can satisfy the reciprocity requirement.