ACA International and Collection Bureau Services, Inc., the plaintiffs in a suit seeking to nullify an advisory opinion on medical debt collection issued by the Consumer Financial Protection Bureau, have filed an emergency motion for a preliminary injunction and temporary restraining order seeking to prevent the requirements from taking effect on December 3.
The plaintiffs claim the CFPB’s guidance fundamentally changes the rules around medical debt collection without due process. The suit claims that the timing of the CFPB’s action is politically motivated, that it was issued without the standard notice-and-comment period, bypassing the usual administrative procedures, and that it imposes significant financial and operational burdens on debt collectors — estimated at $400,000 per year for many companies.
The motion for an injunction and temporary restraining order aims to prevent the new rules from taking effect while the court considers the broader lawsuit. The plaintiffs argue that without such an injunction, debt collectors will face immediate and irreparable harm due to the financial burden and operational upheaval required to comply with the new standards.
In the motion, the plaintiffs contend that the CFPB’s new requirements exceed the agency’s statutory authority and violates the Administrative Procedure Act (APA). The motion emphasizes that the Advisory Opinion effectively introduces new regulations without adhering to proper rulemaking procedures, including the notice-and-comment period. The plaintiffs contend that the new requirements are burdensome, forcing debt collectors to take on roles traditionally handled by healthcare providers and medical experts, which will significantly increase costs and compliance challenges. The motion also highlights the CFPB’s disregard for existing laws, such as the Fair Debt Collection Practices Act and Regulation F, which already establish clear guidelines for debt collection practices.
“The complex problems inherent in the American healthcare payments system deserve a comprehensive analysis, Congressional directives, and the opportunity for public notice and comment,” the plaintiffs wrote in their motion. “The CFPB deprived Plaintiffs and the American public of this right when it issued the Advisory Opinion.”
