Alston & Bird Consumer Finance Blog

#FDCPA

CFPB and FTC Amicus Brief Signals Stance on “Pay-to-Pay” Fees under FDCPA

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What Happened?

On February 27, the Consumer Finance Protection Bureau (CFPB) and the Federal Trade Commission (FTC) filed an amicus brief in the 11th Circuit case Glover and Booze v. Ocwen Loan Servicing, LLC arguing that certain convenience fees charged by mortgage servicer debt collectors are prohibited by the Fair Debt Collection Practices Act (FDCPA).  This brief comes on the heels of an amicus brief Alston & Bird LLP filed on behalf of the Mortgage Bankers Association (MBA).  In its brief, the MBA urged the 11th Circuit to uphold the legality of the fees at issue.

While litigation surrounding convenience fees has spiked in recent years, there is no consensus on whether convenience fees violate the FDCPA.  Federal courts split on the issue, as there is little guidance at the circuit court level, and the issue before the 11th Circuit is one of first impression.  Consequently, the 11th Circuit’s ruling could significantly impact what fees a debt collector is permitted to charge, both within that circuit and nationwide.

Why is it Important?

Convenience fees or what the agencies refer to as “pay-to-pay” fees are the fees charged by servicers to borrowers for the use of expedited payment methods like paying online or over the phone.  Borrowers have free alternative payment methods available (e.g., mailing a check) but choose to pay for the convenience of a faster payment method.

Section 1692f(1) of the FDCPA provides that a “debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt,” including the “collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law.”  The CFPB and FTC argues that Section 1692f(1)’s prohibition extends to the collection of pay-to-pay fees by debt collectors unless such fees are expressly authorized by the agreement creating the debt or affirmatively authorized by law.

First, the agencies contend that pay-to-pay fees fit squarely with the provision’s prohibition on collecting “any amount” in connection with a debt and that charging this fee constitutes a “collection” under the FDCPA.  Specifically, the agencies attempt to counter Ocwen’s argument that the fees in question are not “amounts” covered by Section 1692f(1) because the provision is limited to amounts “incidental to” the underlying debt. They argue that fees need not be “incidental to” the debt in order to fall within the scope of Section 1692f(1). In making this point, the agencies claim the term “including” as used is the provision’s parenthetical suggests that the list of examples is not an exhaustive list of all the “amounts” covered by the provision.  Further, the agencies attempt to counter Ocwen’s argument that a “collection” under the FDCPA refers only to the demand for payment of an amount owed (i.e., a debt). They argue that Ocwen’s understanding of “collects” is contrary to the plain meaning of the word; rather, the scope of Section 1692f(1) is much broader and encompasses collection of any amount , not just those which are owed.

Next, focusing on the FDCPA’s exception for fees “permitted by law,” the agencies contend that a fee is not permitted by law if it is authorized by a valid contract (that implicitly authorizes the fee as a matter of state common law). The agencies suggest if such fees could be authorized by any valid agreement, the first category of collectable fees defined by Section 1692(f)(1)—those “expressly authorized by the agreement creating the debt”—would be superfluous. Lastly, the Agencies argue neither the Electronic Funds Transfer Act nor the Truth in Lending Act – the two federal laws Ocwen relies on in its argument – affirmatively authorizes pay-to-pay fees.

What Do You Need to Do?

Stay tuned. The 11th Circuit has jurisdiction over federal cases originating in Alabama, Florida, and Georgia. Its ruling is likely to have a significant impact on whether debt collectors may charge convenience fees to borrowers in those states, and it could be cited as persuasive precedent in courts nationwide.

CFPB’s Message to Mortgage Servicers: Make Sure You Comply with RESPA’s Force-Placed Insurance Requirements

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A&B Abstract:

In Case You Missed It:  At the recent Federal Housing Finance Agency’s Symposium on Property Insurance, CFPB Director Rohit Chopra spoke about force-placed insurance and conveyed the following message: “The CFPB will be carefully monitoring mortgage market participants, especially mortgage servicers to ensure they are meeting all of their obligations to consumers under the law.”

The CFPB’s servicing rules set forth in RESPA’s Regulation X specifically regulate force-placed insurance. For purposes of those requirements, the term “force-placed insurance” means hazard insurance obtained by a servicer on behalf of the owner or assignee of a mortgage loan that insures the property securing such loan. In turn, “hazard insurance” means insurance on the property securing a residential mortgage loan that protects the property against loss caused by fire, wind, flood, earthquake, falling objects, freezing, and other similar hazards for which the owner or assignee of such loan requires assistance. However, force-placed insurance excludes, for example, hazard insurance required by the Flood Disaster Protection Act of 1973, or hazard insurance obtained by a borrower but renewed by a company in accordance with normal escrow procedures.

Given the Bureau’s announcement, now is a good time to confirm that your company has adequate controls in place to ensure compliance with all of the technical requirements of RESPA’s force-placed insurance provisions.  Set forth below are some of the many questions to consider:

Escrowed Borrowers:

  • When a borrower maintains an escrow account and is more than 30 days past due, does the company ensure that force-placed insurance is only purchased if the company is unable to disburse funds from the borrower’s escrow account?
    • A company will be considered “unable to disburse funds” when the company has a reasonable basis to believe that (i) the borrower’s hazard insurance has been canceled (or was not renewed) for reasons other than nonpayment of premium charges; or (ii) the borrower’s property is vacant.
    • However, a company will not be “unable to disburse funds” only because the escrow account does not contain sufficient funds to pay the hazards insurance charges.

Required Notices:

  • Does the company ensure that the initial, reminder, and renewal notices required for force-placed insurance strictly conform to the timing, content, format, and delivery requirements of Regulation X?

Charges and Fees:

  • Does the company ensure that no premium charge or fee related to force-placed insurance will be assessed to the borrower unless the company has met the waiting periods following the initial and reminder notices to the borrower that the borrower has failed to comply with the mortgage loan contract’s requirements to maintain hazard insurance, and sufficient time has elapsed?
  • Are the company’s fees and charges bona fide and reasonable? Fees and charges should:
    • Be for services actually performed;
    • Bear a reasonable relationship to the cost of providing the service(s); and
    • Not be prohibited by applicable law.
  • Does the company have an adequate basis to assess any premium charge or fee related to force-placed insurance, meaning that the company has a reasonable basis to believe that the borrower has failed to comply with the mortgage loan contract’s requirement to maintain hazard insurance because the borrower’s coverage is expiring, has expired or is insufficient?
  • Does the company have appropriate controls in place to ensure that the company will not assess any premium charge or fee related to force-place insurance to the borrower if the company receives evidence that the borrower has maintained continuous hazard insurance coverage that complies with the fee requirements of the loan contract prior to the expiration of the waiting periods (at least 45 days have elapsed since the company delivered the initial notice and at least 15 days have elapsed since the company delivered the reminder notice)?
  • Will the company accept any of the following as evidence of continuous hazard insurance coverage:
    • A copy of the borrower’s hazard insurance policy declarations page;
    • The borrower’s insurance certificate;
    • The borrower’s insurance policy; or
    • Another similar form of written confirmation?
  • Does the company recognize that the borrower will be considered to have maintained continuous coverage despite a late payment when applicable law or the borrower’s policy contemplates a grace period for the payment of the hazard insurance premium and a premium payment is made within that period and accepted by the insurance company with no lapse in coverage?
  • Within 15 days of receiving evidence (from any source) demonstrating that the borrower has maintained hazard insurance coverage that complies with the hazard insurance requirements in the loan contract, does the company:
    • Cancel any force-placed insurance that the company has purchased to insure the borrower’s property; and
    • Refund to the borrower all force-placed insurance premium charges and related fees paid by such borrower for any period of overlapping insurance coverage and remove from the borrower’s account all force-placed insurance charges and related fees that the company assessed to the borrower for such period?

And let’s not forget that companies must continue to comply with the above requirements if the company is a debt collector under the Fair Debt Collection Practices Act (“FDCPA”) with respect to a borrower and that borrower has exercised a “cease communication” right under the FDCPA.  Of course, failure to comply with the Regulation X requirements could also result in violations of UDAAP and FDCPA provisions.

Takeaway:

Given that the CFPB is telegraphing its upcoming review of servicers’ force-placed insurance practices, now is a good time for companies to ensure that their compliance management programs are robust enough to ensure compliance with all the technical requirements of RESPA’s force-placed insurance requirements. Alston & Bird’s Consumer Financial Services team is happy to assist with such a review.

Eleventh Circuit Finds Monthly Mortgage Statement Containing Boilerplate “This Is An Attempt To Collect A Debt” Language Constitutes A Communication “In Connection With The Collection of A Debt” Under The FDCPA

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A&B Abstract:

In Daniels v. Select Portfolio Servicing, Inc., 2022 U.S. App. LEXIS 14013 (11th Cir. May 24, 2022) a panel of the Eleventh Circuit addressed the question “whether a required monthly mortgage statement that generally complies with the TILA and its regulations can plausibly be a communication ‘in connection with the collection of a debt’ under the FDCPA…if it contains additional debt-collection language.”  Relying almost exclusively on the single sentence in the monthly mortgage statement that read “[t]his is an attempt to collect a debt,” the panel in a 2-1 decision said “yes” and reversed the granting of a motion to dismiss in favor of the mortgage servicer.  While the majority explained that the decision was not contrary to those from other circuit courts and within its own circuit, the dissent pointed out how this decision was arguably inconsistent with such precedent.  Going forward, mortgage servicers face a risk (at least in the Eleventh Circuit) that monthly mortgage statements that otherwise comply with TILA and its regulations could subject the servicer to liability under FDCPA if the statement contains errors and includes language that “this is an attempt to collect a debt.”

Discussion:

In Daniels, the borrower sued the mortgage servicer under the FDCPA and the Florida Consumer Collection Practices Act alleging that several monthly mortgage statements contained errors.  In particular, the borrower alleged that the statements contained errors in the deferred principal balance, outstanding principal balance and the amount of the interest-only payment that was due.  The statements were consistent with the requirements of TILA and its regulations.  The statements, however, also included the following language – “This is an attempt to collect a debt.  All information obtained will be used for that purpose.”  The district court granted the servicer’s motion to dismiss, and dismissed the case with prejudice on the grounds that the mortgage statements were not communications in connection with the collection of a debt under the FDCPA.

In reversing that decision on appeal, the majority first noted that communications can have “dual purposes” – providing a consumer with information and demanding payment of a debt.  The majority then discussed two prior decisions involving letters from law firms, Reese v. Ellis, Painter, Ratterree & Adams, 678 F.3d 1211 (11th Cir. 2012) and Caceres v. McCalla Raymer, LLC, 755 F.3d 1299 (11th Cir. 2014), where the court concluded that the letters were related debt collection for purposes of the FDCPA.

After reviewing the monthly mortgage statements in Daniels, the majority concluded that “viewed holistically, a communication that expressly states that it is ‘an attempt to collect a debt,’ that asks for payment of a certain amount by a certain date, and that provides for a late fee if the payment is not made on time is plausibly ‘related to debt collection.’”  In several places in the opinion, the majority reiterated that the servicer included the “this is an attempt to collect a debt” language that was not required by TILA or its regulations.  It is clear from the opinion that the inclusion of such language was the critical factor in the decision.  The majority noted that, while some portions of the monthly mortgage statements may have been for informational purposes, the communication can have “dual purposes.”  As such, the mere fact that the monthly mortgage statements were otherwise consistent with TILA and its regulations was not dispositive.

The majority recognized that two prior unpublished district court cases from the Southern District of Florida held that the inclusion of “this is an attempt to collect a debt” language did not convert a monthly mortgage statement into a communication in connection with the collection of a debt under the FDCPA.  See Jones v. Select Portfolio Servicing, Inc., 2018 U.S. Dist. LEXIS 75886 (S.D. Fla. 2018) and Zavala v. Select Portfolio Servicing, Inc., 2018 U.S. Dist. LEXIS 201259 (S.D. Fla. 2018).  The majority, however, “respectfully disagree[d]” with the decision in both cases.

Notably, in a prior unpublished decision, Green v. Specialized Loan Servicing LLC, 766 Fed. App’x 777 (11th Cir. 2019), a prior panel of the Eleventh Circuit held that a servicer’s monthly mortgage statement did not “rise to the level of being unlawful debt collection language” when the statement did not contain any language “beyond what is required by TILA.”  The majority in Daniels distinguished Green by noting that it was unpublished and, most importantly, did not contain the “this is an attempt to collect a debt” language.  (Furthermore, the majority noted that Green reached the merits and held that the statement did not constitute an “unlawful” debt collection language, whereas the decision in Daniels merely held that the plaintiff had plausibly alleged an FDCPA violation.).

The dissent in Daniels took issue with the majority’s reliance on the “this is an attempt to collect a debt” language contained in a monthly mortgage statement that otherwise complied with the TILA and its regulations.  The dissent noted that this language “appears once on each statement, is not physically separated from other information in the statement, is not capitalized or otherwise emphasized and is printed using the same font and font size as the rest of the information contained in the statement.”

The dissent discussed Green and other prior decisions (including the district court decisions in Jones and Zavala) and concluded that the mere inclusion of the “collect a debt” language was not enough to render an otherwise TILA-compliant monthly mortgage statement a communication “in connection with the collection of a debt” for purposes of the FDCPA.  “[T]he majority’s conclusion that, by including this extra language – which is not required but is neither inconsistent with nor materially additive to TILA’s requirements – the periodic mortgage statements have become communications subject to the FDCPA is far too broad.”

The dissent in Daniels then discussed decisions from other circuits, including the Seventh Circuit and Eighth Circuit.  The dissent cited Gburek v. Litton Loan Servicing LP, 614 F.3d 380 (7th Cir. 2010), in which the court held that a communication stating that it was an attempt to collect a debt “does not automatically trigger the protections of the FDCPA, just as the absence of such language does not have dispositive significance.”  The dissent also discussed Heinz v. Carrington Mortgage Services, LLC, 3 F.4th 1107 (8th Cir. 2021).  In Heinz, the court addressed “so-called Mini-Miranda statements” where the communication notes that it is from a debt collector and for the purpose of collecting a debt.  Relying on Gburek, the court in Heinz held that such “boilerplate Mini-Miranda statements” do not trigger the protections of the FDCPA.

Therefore, according to the dissent in Daniels and consistent with these decisions in other circuits, the mortgage servicer’s inclusion of “this is an attempt to collect a debt” language in the monthly mortgage statement should not trigger the protections of the FDCPA.  Instead, the dissent would require “stronger demands for full or partial payment and threats of consequences for failure to do so” before a monthly mortgage statement would give rise to a claim under the FDCPA.

On June 14, 2022, the servicer filed a petition for rehearing and rehearing en banc asking the panel for a rehearing of the case.  In the petition, the servicer recognized that “the majority holds that inclusion of the statement, ‘this is an attempt to collect a debt,’ transforms federal-required mortgage statements into debt-collection communications under the FDCPA.”  The servicer argued that the decision conflicts with prior case law inside and outside of the Eleventh Circuit, and “the well-reasoned dissent” was correct to conclude that such language should not render TILA-compliant monthly mortgage statements subject to the FDCPA.

Takeaway:

A mortgage servicer should strongly consider removing from its monthly mortgage statements any language that reads “this is an attempt to collect a debt.”  The relevant language is not required by the TILA or the CFPB.  At least in the Eleventh Circuit now after Daniels, the inclusion of such language will give borrowers pursuing FDCPA claims a much better chance to survive a motion to dismiss and move the case into the expensive discovery phase.

It should be noted that the majority decision in Daniels included an important qualification in a footnote – “We do not hold that the statements are, as a matter of law, communications in connection with the collection of a debt.  Our ruling is that [the borrower] has plausibly alleged that they are.”  Therefore, the mere inclusion of the “this is an attempt to collect a debt” language does not mean, even in the Eleventh Circuit, that a mortgage servicer’s monthly mortgage statements are necessarily subject to the FDCPA as a matter of law.  That said, as a practical matter, it will be difficult for a mortgage servicer to convince a district court that has already denied a motion to dismiss to change its mind at the summary judgment stage and conclude that the inclusion of such language does not render the mortgage statement a communication in connection with the collection of a debt.

Of course, even if the mortgage statement is a communication in connection with the collection of a debt, the borrower must still establish that the statement otherwise was and violated the substantive provisions of the FDCPA.  See, e.g., 15 U.S.C. §§ 1692d, 1692e and 1692f.  Daniels, however, is likely to help borrowers clear the threshold hurdle at the motion to dismiss stage.

Maryland Regulator Puts Lenders and Servicers on Notice Regarding the Assessment of So-Called “Convenience Fees”

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A&B Abstract:

On May 12, 2022, the Maryland Office of the Commissioner of Financial Regulation (the “OCFR”) issued an Industry Advisory (the “Advisory”) “put[ting] [the] industry on notice” of the recent decision issued by the 4th Circuit Court of Appeals in Ashly Alexander, et. al. v. Carrington Mortgage Services, LLC.  The Advisory directs lenders and servicers to review their practices in charging consumer borrowers loan payment fees (referred to herein as “convenience fees”) both to ensure on-going compliance with the law and to determine whether any improper fees have previously been assessed so that they can undertake appropriate reimbursements to affected borrowers.

The Carrington Decision

In Carrington, the 4th Circuit Court of Appeals held that the Maryland Consumer Debt Collection Act (“MCDCA”) incorporates §§ 804 through 812 of federal Fair Debt Collection Practices Act (“FDCPA”), including the FDCPA’s prohibition on “[t]he collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law,” under § 808(1). Because Maryland law does not expressly permit or authorize the assessment of convenience fees, the court held that such fees must be expressly authorized by the loan documents in order to be permitted under § 808(1).

The Carrington court further clarified that the FDCPA’s substantive provisions apply to any person who meets the broad definition of a “collector” under the MCDCA, even if such person would not be considered a “debt collector” under the FDCPA. Notably, the FCDPA contains important exclusions from the definition of “debt collector”, such as when a person is collecting a debt that was obtained prior to default, or if the person collecting the debt was the original creditor.  On the other hand, as amended effective October 1, 2018, the MCDCA defines a “collector” broadly to include all persons collecting or attempting to collect an alleged debt arising out of a consumer transaction and does not provide for similar exclusions.  We discussed the Carrington decision in greater detail in a prior blog post.

The Advisory

The Advisory reminds Maryland “collectors” of the Carrington court’s ruling, that collecting fees on any form of loan payment violates the MCDCA if the fees are not set forth in the loan documents. As a result, Maryland lenders and servicers are cautioned “that any fee charged, whether for convenience or to recoup actual costs incurred by lenders and servicers for loan payments made through credit cards, debit cards, the automated clearing house (ACH), [or other payment methods], must be specifically authorized by the applicable loan documents.” The Advisory makes clear that “[i]f such a fee is not provided for in the applicable loan documents, it would be deemed illegal.” Further, attempts to circumvent this fee restriction by directing consumers to a payment platform associated with the lender or servicer that collects a loan payment fee or requiring consumers to amend their loan documents for the purposes of inserting such fees could also violate Maryland law.”

The Advisory anticipates that some lenders or servicers may discontinue offering certain payment options as a result of the Carrington decision. However, the Commissioner expressly requests that such lenders or servicers promptly notify their customers of such change and encourages lenders and servicers “to work with consumers to minimize the impact any change in payment options could have, including where possible, continuing such payment options without fees, especially when consumers are attempting to pay their obligations in a timely manner.”

Lenders and servicers are directed to review their records to determine whether any improper fees have previously been assessed and, if so, make appropriate reimbursements to affected borrowers. The OCFR intends to monitor the impact that the Carrington decision has on lender and servicer fee practices and lenders and servicers can expect a follow-up on this topic from the OCFR in the coming months.

Takeaway

The implications of the Carrington decision are numerous. First, lenders and servicers must immediately cease the collection of convenience fees from Maryland borrowers, unless such fees are expressly authorized by the loan documents. Lenders and servicers choosing to discontinue certain payment services as a result of the Carrington decision, must also ensure that affected consumers are promptly notified of such change.  In addition, lenders and servicers who meet the definition of a “collector” under the MCDCA must ensure compliance with §§ 804 through 812 of the federal FDCPA, regardless of whether they meet the FDCPA’s definition of a “debt collector.” Finally, while the Carrington decision was focused on the permissibility of convenience fees, we note that the court also held that “[t]he FDCPA’s far-reaching language [under § 808(1)] straightforwardly applies to the collection of ‘any amount.’” Thus, the implications of the Carrington decision go beyond convenience fees to arguably any other fee that is not expressly authorized by the loan documents or permitted by law, and we understand that Maryland regulators have informally indicated as much.  Accordingly, lenders and servicers should carefully review all fees that are, or may be, assessed to Maryland borrowers to ensure such fees are either expressly authorized by the loan documents or permitted by law.

Fourth Circuit Rules That a Mortgage Servicer Can Be Liable for FDCPA Violations Even if Not Subject to the FDCPA

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A&B ABstract:

Putative class action plaintiffs recently prevailed on appeal in a case involving mortgage servicing fees charged to Maryland borrowers. In doing so, the opinion opens the door for FDCPA liability for all mortgage servicing activity and other collection activity in Maryland, even if such activity is otherwise exempt from FDCPA liability.

The Maryland Consumer Debt Collection Act

The case is a putative class action challenging certain fees charged by the borrowers’ mortgage servicer in the ordinary course of business. Among other claims, the plaintiffs alleged that the servicer violated the Maryland Consumer Debt Collection Act (MCDCA). Specifically, the MCDCA prohibits a “collector” from “engag[ing] in any conduct that violates §§ 804 through 812 of the federal Fair Debt Collection Practices Act.” The plaintiffs alleged that the attempt to collect certain mortgage servicing fees violated the FDCPA’s proscription for a “debt collector” to engage in “[t]he collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law.”

The MCDCA applies to any “collector,” defined as any “person collecting or attempting to collect an alleged debt arising out of a consumer transaction.” The FDCPA, on the other hand, uses the term “debt collector” which is defined with several limitations and exceptions, including for debt that was not in default when obtained. Despite the narrower scope of the FDCPA, plaintiffs in the case argued that a servicer could engage in conduct that violated the FDCPA, and thereby be in violation of the MCDCA, even if the servicer was not a “debt collector” subject to the FDCPA.

The district court dismissed the case before considering class certification, determining that the servicer was not a “collector” under the MCDCA and, likewise, was not a “debt collector” under the FDCPA.

The Fourth Circuit’s Decision

On appeal, the Fourth Circuit reversed and remanded the case for further proceedings, finding that the servicer was a collector under the MCDCA. Critically, the court determined that the servicer could be held liable for engaging in conduct that violated the FDCPA, even if it was not actually subject to the FDCPA. The court reasoned that even though the FDCPA only applies to “debt collectors” and, even though the MCDCA, in turn, only prohibits conduct that violates the FDCPA, an entity could still be in violation of the MCDCA even if it was not engaging in debt collection under the FDCPA. The court concluded that “[t]he MCDCA’s broader definition controls here, as it is not displaced by the federal definition.” The court stated that the MCDCA only incorporated the FDCPA’s “substantive provisions” contained in §§ 804 through 812, thus the FDCPA’s applicable definitions and exemptions, contained in §§ 803, 818 were to be disregarded in determining if a violation of the FDCPA occurred for purposes of the Maryland law.

Takeaway

This decision subjects several otherwise exempt and excluded actors to potential liability for FDCPA violations via the MCDCA within Maryland. In addition to mortgage servicers, who are typically exempt from the FDCPA under normal circumstances, the FDCPA contains a number of other exemptions including for entities collecting their owns debts, process servers, and certain nonprofit organizations performing credit counseling. Under the reasoning of the Fourth Circuit’s decision, all of these actors could now potentially be held liable under the MCDCA for FDCPA violations within Maryland. Furthermore, all such actors arguably need to comply with the strictures of the FDCPA in communicating with consumers. This would include restrictions on the timing, frequency, and format of communications with consumers that do not apply to communications outside the scope of the FDCPA. On February 15, 2022, the court denied a Motion for Rehearing and Rehearing En Banc, thus finalizing the decision.

Following this decision, recent legislation introduced in the Maryland General Assembly may delay foreclosure proceedings in Maryland. On February 3, 2022 a delegate introduced HB 803, which would allow borrowers to file counterclaims in response to foreclosure proceedings, would make additional procedural requirements applicable to such actions, and would prevent a foreclosure from proceeding if a borrower files such a counterclaim. Under the Fourth Circuit’s decision, servicers could experience increased MCDCA challenges alleging violations of the FDCPA that would otherwise not apply, and, combined with the additional procedural requirements and delays contemplated by HB 803, foreclosure proceedings could face significant delays as a result.

While some state laws offer state remedies for a violation of federal law, we are unaware of any case that has interpreted such a law to expand the scope of liability under the incorporated federal law. While states can and have adopted consumer statutes that are more expansive than federal law, it remains to be seen if other courts will now interpret simple incorporation of federal law as something more expansive as well.