It’s going to be an interesting week for the credit and collection industry, with the Supreme Court scheduled to hear arguments in a case that seeks to determine how to calculate when the statute of limitations on a Fair Debt Collection Practices Act case starts, and with Kathy Kraninger, the Director of the Consumer Financial Protection Bureau, scheduled to appear before the House Financial Services Committee and the Senate Banking Committee.
Arguments in Rotkiske v. Klemm will be heard before the Supreme Court on Wednesday. The legal issue at play here is whether Congress intended to use something known as the discovery rule, which delays the beginning of a limitations period until the plaintiff knew of or should have known of his injury, or the occurrence rule, which is when the actual violation happened, when it enacted the FDCPA. If the Supreme Court decides the discovery rule is what determines when the statute of limitations clock starts ticking, it could open up companies in the credit and collection industry to more lawsuits from individuals claiming violations of the FDCPA.
All of the industry’s trade groups, along with the federal government, believe the Supreme Court should decide that the statute of limitations clock starts running when the violation occurs, not when it is discovered.
At the same time that the Supreme Court will be hearing its arguments, Kraninger will be sitting down for one of two congressional hearings. It is likely that she will face some questions about the CFPB’s proposed debt collection rule. Democrats will want to challenge what they believe to be a lack of consumer protections in the proposed rule, while Republicans will hold the proposed rule up as an attempt to modernize a law that is out of date with today’s technology. More than likely, though, the bulk of the questions that Kraninger will face will likely have to do with deciding that the CFPB’s leadership structure is unconstitutional.
One consumer advocacy has published a list of questions
