I’m thrilled to announce that Bedard Law Group is the new sponsor for the Compliance Digest. Bedard Law Group, P.C. – Compliance Support – Defense Litigation – Nationwide Complaint Management – Turnkey Speech Analytics. And Our New BLG360 Program – Your Low Monthly Retainer Compliance Solution. Visit www.bedardlawgroup.com, email John H. Bedard, Jr., or call (678) 253-1871.
Every week, AccountsRecovery.net brings you the most important news in the industry. But, with compliance-related articles, context is king. That’s why the brightest and most knowledgable compliance experts are sought to offer their perspectives and insights into the most important news of the day. Read on to hear what the experts have to say this week.
Sen. Warren Introduces Bill to Codify Chevron Into Law
A group of Democratic Senators, including Sen. Elizabeth Warren [D-Mass.] and Sen. Bernie Sanders [I-Vt.], have introduced S. 4749, the Stop Corporate Capture Act (SCCA), which aims to codify the Chevron doctrine into law, thereby restoring and protecting the regulatory authority of federal agencies. The bill is a response to the Supreme Court’s recent ruling in Loper Bright Enterprises v. Raimondo, which overturned 40 years of precedent allowing regulators like the Federal Trade Commission, Federal Communications Commission, and the Consumer Financial Protection Bureau to interpret ambiguous laws. More details here.
WHAT THIS MEANS, FROM JOANN NEEDLEMAN OF CLARK HILL: Since Chevron was decided by the Supreme Court at the end of June, both sides of the aisle have been doing a lot of hand ringing to figure out how to leverage a post-Chevron world to the advantage of their constituents. Senator Warren’s bill, introduced as the Stop Corporate Capture Act, S.4749 (SCCA), is an attempt to “codify the Chevron doctrine and strengthen the rulemaking process” according to the press release on her website. The bill would significantly amend and gut many portions of the Administrative Procedures Act (APA) well beyond the concern of agency deference that was the law under Chevron.
For instance, the bill would require interested persons who submit studies or research as part of the rulemaking process, disclose much they were paid and who hired that person to engage in the study. Another provision of the bill would significantly restrict opportunities for negotiated rulemaking. Another proposal would be to add to the Office of Management and Budget by establishing the Office of Public Advocate who would report directly to the President and assist agencies in the rulemaking process including “developing and coordinating social equity definitions across the executive branch”. Finally, the bill would upend traditional cost-benefit analysis that has been integral to the APA for the past half-century. It would require agencies to consider the “nonquantifiable benefits” or a proposal bill and well as its social equity impact.
Undoubtedly, rather than retreat, Senator Warren and her colleagues are setting up a battle with regard to the future of administrative agencies. While it is unlikely that this bill will be enacted by the close of the 118th Congress, rest assured similar proposals will be put forth in the next session.
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Judge Denies Competing Summary Judgment Motions in Case Over Whether Consumer Disputed Debt
A District Court judge in Florida has denied competing motions for summary judgment in a Fair Debt Collection Practices Act case, in a case that hinges on whether a consumer saying, “Okay. All right. Well, thank you for your assistance then. That’s all I really needed for now. I’ll go ahead and conduct further inquiries about this matter independently” counts as a dispute of the debt after being prompted with the opportunity to dispute the debt by a representative of the defendant. More details here.
WHAT THIS MEANS, FROM COOPER WALKER OF FROST ECHOLS: This is a tough case. Plaintiff sued the agency for not marking a debt as disputed after a phone call. The Court described the underlying phone call as follows – “During a conversation with Defendant’s representative, Plaintiff stated: ‘I’m calling because this bill is a little bit high. Was that accurate? Was the meter correct?’ Defendant’s representative responded: ‘So if you don’t agree with the balance, we could always put in a dispute on our end and request the itemized statement and see exactly what the balance is made up of, but we do not have that information handy.’ Plaintiff then responded: ‘Okay. All right. Well, thank you for your assistance then. That’s all I really needed for now. I’ll go ahead and conduct further inquiries about this matter independently.’”
The Court denied summary judgment for both sides and sent the case to trial.
While it is common knowledge, don’t forget that agencies are regularly receiving phone calls wherein the purpose of the call is not to pay the debt but to create a lawsuit. The reality is that there are consumer attorneys out there coaching their clients to make a dispute as ambiguously as possible in order to create a scenario like this one. Make sure your policies on disputes set you up to bring the most money in the door and keep the most money from leaving as possible.
Judge Grants MTD in FDCPA Class Action Over ‘Dubious and Illogical’ Claims
A District Court judge in Pennsylvania has “resoundingly” granted a defendant’s motion to dismiss a Fair Debt Collection Practices Act class action lawsuit, ruling that the “dubious and illogical legal” theories proposed by the plaintiff. More details here.
WHAT THIS MEANS, FROM JONATHAN ROBBIN OF J. ROBBIN LAW: Courts are more regularly recognizing that the intent of the FDCPA is to solely to protect debtors from abusive practices, and does not concern technical violations of state procedural rules, especially within a legitimate debt collection complaint. This was the conclusion reached last month by the Western District of Pennsylvania in Pochan v. UHG I LLC et al (2:23-cv-01138-MJH).
In Pochan, the creditor filed a collection action in state court and attached certain records to the collection complaint. These records identified the plaintiff as a borrower and included the borrower’s underlying loan agreement. Plaintiff subsequently brought an action in federal court alleging that, in violation of the FDCPA, his private financial information was compromised, and the documents attached to the collection complaint were confidential because the agreement qualified as a loan application requiring the inclusion of a “Confidential Document Form.”
The Western District of Pennsylvania held that a loan agreement or contract is not a “loan application document,” such that the collection attorney’s certification of compliance with statute practice rules was not misleading. But regardless of the attorney’s certification, a creditor’s noncompliance with a state procedural requirement cannot independently give rise to an FDCPA violation. And even if there had been an error or issue with the action in the state court action, plaintiff’s remedy would only be to seek redress in the state court.
Consistent with the recent panoply of cases, Pochan reaffirms the principle that a plaintiff cannot bring an independent FDCPA complaints arising solely out of actions taken by a creditor or attorney in a state court action.
CFPB Warns Against Using NDAs to Block Whistleblowers
The Consumer Financial Protection Bureau yesterday issued a warning to law enforcement agencies and other regulators that companies requiring employees to sign broad confidentiality agreements can potentially violate the Consumer Financial Protection Act. There is a section of the CFPA that protects whistleblower employees, and any action that dissuades employees from reporting suspected violations of federal consumer financial law could impede the CFPB’s ability to enforce these laws. More details here.
WHAT THIS MEANS, FROM ISSA MOE OF MOSS & BARNETT: As if they hadn’t already crashed enough parties without an invite, the Consumer Financial Protection Bureau is branching out again, this time moving into the employment law arena. In that regard, the Bureau just issued a Circular clarifying that employers may not require employees to sign broad nondisclosure or other confidentiality agreements that could subject them to punitive measures (e.g., lawsuits or termination) if they engage in lawful whistleblowing activities.
To be honest, this move by the Bureau is unsurprising. We’ve already seen states and federal agencies push out rules intended to shift power from employers to employees in other areas. That includes, for example, bans on employee noncompetes out of states like Minnesota. The FTC recently followed suit, issuing its own rule banning noncompetes, with the stated intention of protecting the freedom of workers to change jobs, increasing innovation and fostering new business formation. This move by the Bureau has the same feel. In fairness, however, whistleblower protections can serve as a reasonable check on companies in the financial services industry that elect to engage in unlawful business activity. Allowing those companies to silence whistleblowers through threats of litigation or termination gives bad actors an unfair advantage over their law-abiding peers in the space.
So what should businesses be doing in response to the Bureau’s Circular? Assuming they don’t have a desire (or the budget) to challenge any regulatory action by the CFPB in this area — which is fair game by the way following the Supreme Court’s recent decision trashing Chevron deference—businesses should review their employee handbooks and other company policies to ensure they don’t include provisions banning lawful whistleblowing activity. To be clear, nondisclosure and other confidentiality requirements serve a valuable purpose for companies, as they ensure their valuable trade secrets, proprietary rights and other sensitive business information remain protected. But companies should carefully review those policies and consult their counsel as needed to ensure they don’t go too far.
I’m thrilled to announce that Bedard Law Group is the new sponsor for the Compliance Digest. Bedard Law Group, P.C. – Compliance Support – Defense Litigation – Nationwide Complaint Management – Turnkey Speech Analytics. And Our New BLG360 Program – Your Low Monthly Retainer Compliance Solution. Visit www.bedardlawgroup.com, email John H. Bedard, Jr., or call (678) 253-1871.
