The CFPB has filed amicus briefs in two appeals involving the Fair Debt Collection Practices Act–one in the Tenth Circuit and the other in the Eleventh Circuit. As reported by Marty Bryce and Chris Willis, the CFPB filed an amicus brief last month in an appeal before the Tenth Circuit involving the right to rescind a mortgage loan under the Truth in Lending Act. Like its TILA brief, the CFPB’s FDCPA briefs represent expansive interpretations of federal consumer financial protection laws by the CFPB.
In the Tenth Circuit FDCPA case, Marx v. General Revenue Corp., the CFPB filed its amicus brief in support of the plaintiff’s petition for rehearing en banc or rehearing by the panel. The Tenth Circuit ruled in Marx that a fax sent by a debt collector to the plaintiff’s employer was not a “communication” within the meaning of the FDCPA (and thus the debt collector had not “communicated” with third parties in violation of the FDCPA) unless the plaintiff could show that her employer either knew or inferred that the fax involved a debt. The Tenth Circuit also ruled that the debt collector’s right to recover its costs under Federal Rule of Civil Procedure 54(b), which allows the prevailing party to recover costs other than attorneys’ fees, was not superseded by the FDCPA’s costs provision, which allows a court to award attorney’s fees and costs to the defendant if the court finds the lawsuit was brought in bad faith and for the purpose of harassment. (For more information on Marx, see our legal alert.)
In its amicus brief filed in Marx, the CFPB argues that whether a debt collector is “communicating” with a third party should not depend on whether the contact reveals to the third party that it relates to a debt. It also argues that a prevailing defendant in an FDCPA case should not be entitled to costs without a showing of bad faith.
The CFPB’s amicus brief in the Eleventh Circuit case, Birster v. American Home Mortgage Servicing, Inc., was filed in support of the plaintiff’s appeal seeking reversal of the district court’s opinion. The plaintiffs had brought a lawsuit alleging that their mortgage servicer’s conduct following the initiation of a foreclosure action against them violated the FDCPA. The district court held that the FDCPA claim failed as a matter of law because the alleged conduct related to enforcement of a security interest and therefore the servicer was not a “debt collector” under all provisions of the FDCPA. In its amicus brief, the CFPB argues that an entity that regularly collects debts still qualifies as a “debt collector” under all provisions of the FDCPA even if it is attempting to enforce a security interest in a particular case. The CFPB’s brief in Birster has already been cited in at least one reported decision. See, Jara v. Aurora Loan Services, 2012 WL 71736 (N.D. Cal. Jan. 9, 2012).
With the CFPB having said that it’s committed to filing amicus briefs in cases involving federal consumer financial protection laws, we expect to see many more amicus briefs from the CFPB.