Amicus Curiae Brief — Dennis Obduskey, Petitioner v. McCarthy & Holthus LLP

No. 17-1307

In the Supreme Court of the United States

DENNIS OBDUSKEY, PETITIONER

v.

MCCARTHY & HOLTHUS LLP, ET AL.

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

BRIEF FOR THE UNITED STATES

AS AMICUS CURIAE SUPPORTING RESPONDENT

MARY MCLEOD

General Counsel

JOHN R. COLEMAN

Deputy General Counsel

STEVEN Y. BRESSLER

Assistant General Counsel

NANDAN M. JOSHI

KRISTIN BATEMAN

Counsel

Bureau of Consumer

Financial Protection

Washington, D.C. 20552

NOEL J. FRANCISCO

Solicitor General

Counsel of Record

JEFFREY B. WALL

Deputy Solicitor General

JONATHAN C. BOND

Assistant to the Solicitor

General

Department of Justice

Washington, D.C. 20530-0001

SupremeCtBriefs@usdoj.gov

(202) 514-2217

QUESTION PRESENTED

The Fair Debt Collection Practices Act (FDCPA),

15 U.S.C. 1692 et seq., imposes various requirements

on “a debt collector * * * in connection with the collection of any debt.” 15 U.S.C. 1692c(a); see 15 U.S.C.

1692c-1692g. The FDCPA generally defines “debt collector” (with various exceptions) as “any person who

uses any instrumentality of interstate commerce or the

mails in any business the principal purpose of which is

the collection of any debts, or who regularly collects or

attempts to collect, directly or indirectly, debts owed or

due or asserted to be owed or due another.” 15 U.S.C.

1692a(6). Debt collectors who fall within that general

definition are subject to all of the FDCPA’s requirements for debt collectors. The Act also contains a

limited-purpose definition of “debt collector,” which

provides that, “[f ]or the purpose of section 1692f(6) of

this title, [the] term also includes any person who uses

any instrumentality of interstate commerce or the mails

in any business the principal purpose of which is the

enforcement of security interests.” Ibid. The question

presented is as follows:

Whether enforcement of a security interest in property through a state-law nonjudicial-foreclosure process constitutes debt collection for all purposes under

the FDCPA.

(I)

TABLE OF CONTENTS

Page

Interest of the United States....................................................... 1

Statutory provisions involved ...................................................... 1

Statement ...................................................................................... 2

Summary of argument ............................................................... 10

Argument:

Enforcement of a security interest through a

nonjudicial foreclosure generally is not debt

collection under the FDCPA ............................................. 12

A. Enforcement of a security interest, without more,

generally is not debt collection under the FDCPA ..... 13

B. Initiating a nonjudicial-foreclosure proceeding

constitutes enforcement of a security interest and

so generally is not debt collection under the

FDCPA ............................................................................. 19

C. Petitioner’s contrary arguments lack merit ................. 26

Conclusion ................................................................................... 33

Appendix — Statutory provisions ........................................... 1a

TABLE OF AUTHORITIES

Cases:

BFP v. Resolution Trust Corp., 511 U.S. 531 (1994) ........... 5

Bank of Am. v. Kosovich,

878 P.2d 65 (Colo. App. 1994) ........................................... 8

Butner v. United States, 440 U.S. 48 (1979) ......................... 4

Clark v. Rameker, 134 S. Ct. 2242 (2014) ......................... 15

Cohen v. Rosicki, Rosicki & Assocs., P.C.,

897 F.3d 75 (2d Cir. 2018) .................................................. 25

Encino Motorcars, LLC v. Navarro,

138 S. Ct. 1134 (2018) ......................................................... 19

Heintz v. Jenkins, 514 U.S. 291 (1995) .................... 11, 18, 19

Kaltenbach v. Richard, 464 F.3d 524 (5th Cir. 2006) ......... 32

(III)

IV

Cases—Continued:

Page

McNair v. Maxwell & Morgan PC,

893 F.3d 680 (9th Cir. 2018) ............................................... 25

Mount Lemmon Fire Dist. v. Guido,

No. 17-587 (Nov. 6, 2018) ................................................... 14

Oncale v. Sundowner Offshore Servs., Inc.,

523 U.S. 75 (1998) ............................................................ 29

Piper v. Portnoff Law Assocs., Ltd.,

396 F.3d 227 (3d Cir. 2005) ................................................ 25

Reese v. Ellis, Painter, Ratterree & Adams, LLP,

678 F.3d 1211 (11th Cir. 2012) ........................................... 25

Roberts v. Sea-Land Servs., Inc., 566 U.S. 93 (2012) ...... 15

Russello v. United States, 464 U.S. 16 (1983) .................. 29

TRW Inc. v. Andrews, 534 U.S. 19 (2001) ..................... 28, 29

Vien-Phuong Thi Ho v. ReconTrust Co.,

858 F.3d 568 (9th Cir.),

cert. denied, 138 S. Ct. 504 (2017) ................... 22, 23, 25, 32

Statutes and rules:

Fair Debt Collection Practices Act, Pub. L. No.

95-109, 91 Stat. 874 (15 U.S.C. 1692 et seq.) .......................... 1

§ 802(a), 91 Stat. 874 (15 U.S.C. 1692(a)) ...... 2, 16, 30, 1a

15 U.S.C. 1692(b) ............................................... 2, 3, 16, 1a

15 U.S.C. 1692(c) ................................................... 2, 16, 1a

15 U.S.C. 1692(e) ................................................... 2, 16, 1a

15 U.S.C. 1692a(5) .....................................................3, 2a

15 U.S.C. 1692a(6) .............................................passim, 2a

15 U.S.C. 1692a(6)(A)-(F) ................................................. 3

15 U.S.C. 1692c-1692g ................................................... 2

15 U.S.C. 1692c-1692h .................................................... 12

15 U.S.C. 1692c(a) ................................................. 2, 12, 6a

15 U.S.C. 1692c(a)(2) .............................................. 23, 6a

15 U.S.C. 1692c(b) ................................................... 23, 6a

V

Statutes and rules—Continued:

Page

15 U.S.C. 1692c(c) .....................................................8, 7a

15 U.S.C. 1692d............................................................ 2, 8a

15 U.S.C. 1692e ............................................................ 2, 9a

15 U.S.C. 1692f .................................................... 2, 14, 11a

15 U.S.C. 1692f(6) ............................................passim, 12a

15 U.S.C. 1692f(6)(A) .......................................... 3, 17, 12a

15 U.S.C. 1692f(6)(B) ...................................................... 17

15 U.S.C. 1692f(6)(C) .............................................. 17, 12a

15 U.S.C. 1692g(a) ..................................................... 2, 13a

15 U.S.C. 1692g(b) ..................................................... 2, 14a

15 U.S.C. 1692i .......................................................10, 12, 16a

15 U.S.C. 1692i(a)(1)................................................ 31, 16a

15 U.S.C. 1692l(a)-(c) ........................................................ 1

15 U.S.C. 1692l(d) ...................................................... 1, 22a

15 U.S.C. 1692n........................................................ 23, 23a

7 U.S.C. 1631(c)(7) ................................................................. 20

11 U.S.C. 101(51) ................................................................... 20

11 U.S.C. 1110(d)(2) ............................................................... 20

11 U.S.C. 1168(d)(2) ............................................................... 20

26 U.S.C. 6323(h)(1) ............................................................... 20

49 U.S.C. 14301(a)(3) ............................................................. 20

Colo. Rev. Stat. (2017):

§ 38-37-101.......................................................................... 7

§ 38-38-100.3(19) ................................................................ 7

§ 38-37-102.......................................................................... 7

§ 38-38-101.......................................................................... 7

§ 38-38-101(14) ................................................................... 7

§ 38-38-102.......................................................................... 7

§ 38-38-102.5....................................................................... 7

§ 38-38-103.......................................................................... 7

§ 38-38-103(5) ..................................................................... 7

VI

Statutes and rules—Continued:

Page

§ 38-38-104.......................................................................... 7

§ 38-38-105(b) ..................................................................... 7

§ 38-38-106(6) ..................................................................... 8

§ 38-38-109(s) ..................................................................... 7

§ 38-38-110.......................................................................... 7

§ 38-38-111.......................................................................... 8

Colo. R. Civ. P.:

Rule 105(a) ......................................................................... 6

Rule 120(a).................................................................7, 23

Rule 120(b) ................................................................7, 23

Rule 120(c) ...................................................................... 7

Rule 120(d) ..................................................................... 7

Rule 120(g) ..................................................................... 8

Miscellaneous:

Black’s Law Dictionary:

(4th ed. 1951) .................................................................... 20

(5th ed. 1979) ................................................................ 4, 20

(10th ed. 2014) .............................................................. 4, 20

Michael Corkery & Jessica Silver-Greenberg,

Miss a Payment? Good Luck Moving That Car,

N.Y. Times, Sept. 24, 2014 ................................................. 27

2 Baxter Dunaway, Law of Distressed Real Estate

(May 2018 update) ..................................................... passim

53 Fed. Reg. 50,097 (Dec. 13, 1988) ..................................... 15

William H. Henning & Fred H. Miller,

66 No. 4 U.C.C. Bulletin 1, Report on the UCC:

2008—Part 1 (Jan. 2009) .................................................. 4

13 Debra Knapp, Colorado Practice Series, Civil

Procedure Forms and Commentary (2d ed. 2005) ........... 6

National Consumer Law Center, Foreclosures and

Mortgage Servicing (5th ed. 2014) .................................. 5, 6

VII

Miscellaneous—Continued:

Page

Office of the Secretary, FTC, Staff Opinion Letter,

1992 WL 12622329 (Oct. 8, 1992) ....................................... 22

S. 918, 95th Cong., 1st Sess. (1977 )...................................... 16

S. 1130, 95th Cong., 1st Sess. (1977 ).................................... 16

Antonin Scalia & Bryan A. Garner, Reading Law:

The Interpretation of Legal Texts (2012) ......................... 29

Restatement (Third) of Property (Mortgages)

(1997) ........................................................................ 4, 5, 6, 21

U.C.C. Art. 9 (2017) ............................................................. 4

§ 9-607(a) .......................................................................... 21

§ 9-609 ............................................................................... 21

§ 9-614 ............................................................................... 27

§ 9-623 ............................................................................... 27

William F. Walsh, Treatise on Mortgages (1934) ............ 21

Webster’s New International Dictionary

(2d ed. 1958) ..................................................................... 20

In the Supreme Court of the United States

No. 17-1307

DENNIS OBDUSKEY, PETITIONER

v.

MCCARTHY & HOLTHUS LLP, ET AL.

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

BRIEF FOR THE UNITED STATES

AS AMICUS CURIAE SUPPORTING RESPONDENT

INTEREST OF THE UNITED STATES

The Fair Debt Collection Practices Act (FDCPA or

Act), 15 U.S.C. 1692 et seq., authorizes the Bureau of

Consumer Financial Protection (Bureau) to “prescribe

rules with respect to the collection of debts by debt collectors, as defined in [the FDCPA].” 15 U.S.C. 1692l(d).

The Bureau, the Federal Trade Commission (FTC), and

other federal agencies are responsible for enforcing the

Act through administrative proceedings and civil litigation. 15 U.S.C. 1692l(a)-(c). The United States therefore has a substantial interest in the Court’s resolution

of the question presented.

STATUTORY PROVISIONS INVOLVED

Pertinent statutory provisions are reprinted in the

appendix to this brief. App., infra, 1a-28a.

(1)

2

STATEMENT

1. a. Congress enacted the FDCPA to address “the

use of abusive, deceptive, and unfair debt collection

practices by many debt collectors.” Pub. L. No. 95-109,

§ 802(a), 91 Stat. 874 (15 U.S.C. 1692(a)). Congress concluded that “[m]eans other than misrepresentation or

other abusive debt collection practices [we]re available

for the effective collection of debts,” and “[e]xisting

laws and procedures * * * [we]re inadequate to protect

consumers.” 15 U.S.C. 1692(b) and (c). The Act’s “purpose[s]” include “eliminat[ing] abusive debt collection

practices by debt collectors” and “insur[ing] that those

debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged.”

15 U.S.C. 1692(e).

The FDCPA pursues those purposes primarily by

imposing various requirements on the activities of “debt

collector[s]” “in connection with the collection of [a] debt.”

15 U.S.C. 1692c(a); see 15 U.S.C. 1692c-1692h. Among

other things, the Act restricts debt collectors’ communications with consumers and third parties “in connection

with the collection of any debt,” 15 U.S.C. 1692c(a) and

(b); prohibits them from “harass[ing], oppress[ing], or

abus[ing] any person,” or from making “false, deceptive, or misleading representation[s],” “in connection

with the collection of any debt,” 15 U.S.C. 1692d, 1692e;

and bans their use of “unfair or unconscionable means

to collect or attempt to collect any debt,” 15 U.S.C. 1692f.

It also requires a debt collector seeking to collect a debt

promptly to provide the consumer certain information

about the debt, 15 U.S.C. 1692g(a), and to “cease collection of the debt” if the consumer “dispute[s]” the debt,

until the debt collector provides verification of the debt.

15 U.S.C. 1692g(b).

3

b. Consistent with its focus on protecting “consumer[s]” from certain abuses, 15 U.S.C. 1692(b), the

FDCPA does not apply to all “debts” or “debt collectors”

in a colloquial sense. It defines “debt” to include only

“an[ ] obligation or alleged obligation of a consumer to

pay money arising out of a transaction in which the

money, property, insurance, or services which are the

subject of the transaction are primarily for personal,

family, or household purposes.” 15 U.S.C. 1692a(5).

Commercial debts thus are not covered.

Similarly, the FDCPA’s provisions do not apply to

every person who might colloquially be described as collecting a debt. The Act does not define “collection,” but

it contains two definitions of “debt collector,” 15 U.S.C.

1692a(6), both subject to an array of exclusions, see

15 U.S.C. 1692a(6)(A)-(F). First, Section 1692a(6) states

that “ ‘debt collector’ means any person who uses any

instrumentality of interstate commerce or the mails in

any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts

to collect, directly or indirectly, debts owed or due or

asserted to be owed or due another.” 15 U.S.C. 1692a(6).

Second, Section 1692a(6) further states that, “[f ]or the

purpose of section 1692f(6) of this title, [the] term also

includes any person who uses any instrumentality of

interstate commerce or the mails in any business the

principal purpose of which is the enforcement of security

interests.” Ibid. Section 1692f(6) prohibits debt collectors from “[t]aking or threatening to take any nonjudicial

action to effect dispossession or disablement of property” if the debt collector lacks a “present right to possession * * * through an enforceable security interest,”

if it does not actually “inten[d]” to take possession, or if

the property is “exempt.” 15 U.S.C. 1692f(6)(A).

4

Taken together, these two definitions establish that

a person engaged in a business whose principal purpose

is enforcing security interests generally falls outside

the Act, except that the person is deemed to be a debt

collector for purposes of Section 1692f(6). The FDCPA

permits such a person to take collateral pursuant to a

security interest, so long as applicable law permits

doing so and the person does not make false threats.

c. The FDCPA does not define “security interest[ ].”

In ordinary usage, the term refers to a property interest

given to a creditor to secure a debt—typically a right to

take or compel the sale of property that the consumer

has pledged as collateral if the consumer does not pay

the debt. See, e.g., Black’s Law Dictionary 1217 (5th ed.

1979) (Black’s Fifth) (“A form of interest in property

which provides that the property may be sold on default

in order to satisfy the obligation for which the security

interest is given.”); Black’s Law Dictionary 1562 (10th

ed. 2014) (Black’s Tenth) (similar).

Security interests are generally governed by state law.

See, e.g., Butner v. United States, 440 U.S. 48, 55-57 (1979).

Security interests in personal property are addressed by

Article 9 of the Uniform Commercial Code (U.C.C.),

which every State has adopted in some form. See William

H. Henning & Fred H. Miller, 66 No. 4 U.C.C. Bulletin 1,

Report on the UCC: 2008—Part 1 (Jan. 2009). Security

interests in real property are known as mortgages. See

Black’s Fifth 1217; 2 Baxter Dunaway, Law of Distressed

Real Estate § 15:1 (May 2018 update) (Dunaway).

If a debtor defaults on a mortgage debt, the ordinary

method of enforcing the security interest is “[f ]oreclosure,” i.e., “the process in which property securing a

mortgage is sold to pay off the loan balance due.”

2 Dunaway § 15:1; see Restatement (Third) of Property

5

(Mortgages) § 8.2 (1997) (Restatement). State foreclosure laws vary, but two general types exist. 2 Dunaway

§ 16:1; see BFP v. Resolution Trust Corp., 511 U.S. 531,

541-542 (1994). First, every State permits “judicial”

foreclosure, which requires a creditor to initiate a court

action and obtain a court order to foreclose on the

secured property. See 2 Dunaway § 16:1. The debtor

and other interested parties are typically named as

defendants. Id. § 16:3. Following a sale, most States permit the creditor to obtain a deficiency judgment against

the debtor for any remaining balance. See National Consumer Law Center, Foreclosures and Mortgage Servicing § 12.3.2 (5th ed. 2014) (NCLC).

Second, most States additionally permit “nonjudicial

foreclosure,” also called “power of sale foreclosure,”

“foreclosure by advertisement,” or a “trustee’s sale.”

2 Dunaway § 17:1; see id. App. 17A (listing States). Nonjudicial foreclosures typically enable a creditor to initiate

“a public sale of the property” without “utiliz[ing] court

proceedings to conduct the foreclosure sale unless the

lender wants to obtain a deficiency judgment” for any

shortfall that remains after the property has been sold.

Id. §§ 16:1, 17:1. Where nonjudicial foreclosure is available, “it is normally the preferred method of foreclosure

because, in most instances, the process is less costly and

time-consuming than judicial foreclosure.” Id. § 16:1. In

many States, however, creditors who elect nonjudicial

foreclosure waive or limit their ability to obtain a deficiency judgment against the debtor for any shortfall.

See ibid.; see also NCLC § 12.3.2.

“State non-judicial foreclosure statutes typically set

out both substantive and procedural requirements for

conduct of a foreclosure sale,” and “[c]ompliance with

these requirements is necessary to complete a valid sale”

6

and “to extinguish the borrower’s interest in the property.” NCLC § 7.5.1; see 2 Dunaway § 17:2. These

requirements limit who may initiate nonjudicial foreclosure and typically include procedural protections that

govern “serving and recording pre-sale notices, placing

advertisements, serving and recording notices of sale,

and conducting the sale.” NCLC § 7.5.1; see 2 Dunaway

§ 17:1. A creditor ordinarily may pursue nonjudicial foreclosure only if the mortgage instrument contains a “power

of sale clause” granting it the authority to initiate such a

sale. 2 Dunaway § 17:2. A common practice is to vest the

security interest in a third-party trustee; when trustees

are used, the instrument granting the power of sale is

called a “deed of trust.” Restatement § 8.2 cmt. a.

2. This case involves a real-property security interest

under Colorado law, which generally permits a creditor

who holds a deed of trust to “foreclose on [a] lien either

through a judicial or a non-judicial foreclosure.”

13 Debra Knapp, Colorado Practice Series, Civil Procedure Forms and Commentary § 120.1 (2d ed. 2005). In

a judicial foreclosure, such a creditor may “obtain[ ] a

complete adjudication of the rights of all parties thereto,

with respect to any real property and for damages, if any,

for the withholding of possession,” and “[t]he court in its

decree shall grant full and adequate relief so as to completely determine the controversy and enforce the rights

of the parties.” Colo. R. Civ. P. 105(a).

Colorado’s “nonjudicial” foreclosure process is a misnomer because a court order is required to conduct the

foreclosure sale. But it does not entail a full-blown, trialtype proceeding that adjudicates all of the parties’ claims

(as in judicial foreclosures). And the creditor cannot

obtain a deficiency judgment in the foreclosure proceeding for any debt remaining after the sale. Pet. App. 8a-9a.

7

For residential mortgages, Colorado’s nonjudicialforeclosure process typically begins when the creditor or

its agent sends the debtor certain statutorily required

contact information for Colorado’s foreclosure hotline

and the creditor’s loss-mitigation department. Colo.

Rev. Stat. § 38-38-102.5 (2017). Thirty days thereafter,

the creditor may initiate foreclosure proceedings by filing a “notice of election and demand” with the public

trustee for the county where the property is located. Id.

§ 38-38-101. The public trustee is a state official

appointed by the governor. Id. §§ 38-37-101, 38-37-102.

The public trustee is responsible for recording the notice

of election and demand and mailing notices to the debtor

providing information about the debtor’s rights to cure

the default and the foreclosure sale’s date and location.

Id. §§ 38-38-101(14), 38-38-102, 38-38-103. Notices are

also mailed to interested parties and must be published

in a local newspaper. Id. §§ 38-38-100.3(19), 38-38-103(5).

If the debtor does not cure the default or declare

bankruptcy, a creditor holding a deed of trust may file a

verified motion in court for an order authorizing sale of

the property. Colo. Rev. Stat. §§ 38-38-104, 38-38-105(b),

38-38-109(s) (2017); Colo. R. Civ. P. 120(a). The creditor

must serve the debtor and other interested parties with

notice of the motion and the hearing date, and any interested person who disputes the grounds for the motion

may file a response. Colo. R. Civ. P. 120(b) and (c). The

court will then hold a hearing to determine whether to

order the sale. Colo. R. Civ. P. 120(d).

If the court authorizes the sale, the public trustee or

sheriff may sell the property at a public auction. Colo.

Rev. Stat. § 38-38-110 (2017). The court “shall require a

return of sale” to be filed and “shall enter an order

approving the sale” if it was “conducted in conformity with

8

the [court’s] order.” Colo. R. Civ. P. 120(g). Once the proceeds are distributed to lienholders, “any remaining overbid” is “paid to the owner.” Colo. Rev. Stat. § 38-38-111

(2017). If the sale proceeds are insufficient to pay off the

debt, the creditor cannot recover the balance due in the

same proceeding, but must file a separate suit against

the debtor. See id. § 38-38-106(6); Bank of Am. v. Kosovich, 878 P.2d 65, 66 (Colo. App. 1994).

3. In 2007, petitioner borrowed $329,940 to buy a

home in Colorado, which served as security for the loan.

Pet. App. 2a; see J.A. 37. Wells Fargo Bank, N.A., serviced the loan. Pet. App. 2a. In 2009, petitioner

defaulted. Ibid.

In 2014, Wells Fargo hired respondent McCarthy &

Holthus LLP (McCarthy), a law firm, to foreclose on the

property. Pet. App. 2a. McCarthy sent petitioner an

undated letter stating that it had been “instructed to

commence foreclosure.” J.A. 37. The letter further

stated that McCarthy “may be considered a debt collector attempting to collect a debt” and would “assume this

debt to be valid unless [petitioner] dispute[d]” it within

30 days, in which case McCarthy would send verification

of the debt to petitioner. J.A. 37-38 (capitalization omitted). In a separate undated letter, McCarthy provided

petitioner the required contact information for Colorado’s

foreclosure hotline and McCarthy’s loss-mitigation representatives. See J.A. 42-43. In August 2014, petitioner

wrote to McCarthy disputing the debt and requesting

verification, directing McCarthy to “cease all unauthorized contact” about the debt pursuant to 15 U.S.C.

1692c(c), and stating that he was represented by counsel.

C.A. Supp. App. 124-125.

9

McCarthy did not provide petitioner verification of

the debt. See Pet. App. 2a. Instead, in May 2015, it commenced a nonjudicial-foreclosure proceeding under Colorado law by filing with the public trustee a “notice of

election and demand for sale.” J.A. 39 (capitalization and

emphasis omitted). The notice stated that Wells Fargo

had “elected to accelerate the entire indebtedness”

secured by the deed of trust and directed the trustee to

“sell [the] property for the purpose of paying the indebtedness thereby secured.” J.A. 39-40. It also stated that

McCarthy “may be considered a debt collector attempting to collect a debt.” J.A. 40 (capitalization omitted).

4. a. Petitioner filed this action against McCarthy

and Wells Fargo, asserting claims in part under the

FDCPA. Pet. App. 2a-3a, 16a. The district court dismissed the suit, concluding that “the FDCPA does not

apply to non-judicial foreclosures” because “foreclosure

proceedings are not a collection of a debt” within the

meaning of the FDCPA. Id. at 20a-21a.

b. The court of appeals affirmed. Pet. App. 1a-13a.

As relevant here, the court concluded that, although

petitioner had “sufficiently pled that McCarthy failed to

verify [petitioner’s] debt after it was disputed, in violation of [15 U.S.C.] 1692g,” McCarthy “[wa]s not a debt

collector for purposes of the FDCPA” when it initiated

the nonjudicial-foreclosure proceeding because “McCarthy’s mere act of enforcing a security interest through

a non-judicial foreclosure proceeding does not fall

under the FDCPA.” Id. at 5a, 12a. The court reasoned

that “enforcing a security interest is not an attempt to

collect money from the debtor, and the consumer has no

obligation . . . to pay money.” Id. at 7a (citation and

internal quotation marks omitted). It observed that

10

nonjudicial foreclosures differ in an “obvious and critical” respect from judicial foreclosures: they “do[ ] not

preserve to the trustee the right to collect any deficiency in the loan amount personally against the mortgagor.” Id. at 8a (citations omitted). The court also

expressed concern that, “[i]f the FDCPA applied to

non-judicial foreclosure proceedings in Colorado, it

would conflict with Colorado mortgage foreclosure

law.” Id. at 10a. It rejected the argument that a contrary reading is compelled by 15 U.S.C. 1692i, “a venue

provision” for “ ‘any legal action on a debt’ ” by a debt

collector “ ‘against any consumer.’ ” Pet. App. 9a (citation omitted). The court reserved judgment on whether

“more aggressive collection efforts leveraging the

threat of foreclosure into the payment of money” would

“constitute ‘debt collection’ ” under the Act. Id. at 11a.

SUMMARY OF ARGUMENT

Initiating a nonjudicial-foreclosure proceeding generally does not constitute debt collection under the FDCPA.

A. The FDCPA’s text and structure make clear that

enforcement of a security interest, without more, is not

debt collection except for purposes of one of the Act’s provisions. The Act creates a two-tiered framework that

defines two types of “debt collector” and imposes different obligations on each type. 15 U.S.C. 1692a(6). The

Act’s general definition of “debt collector” includes businesses whose “principal purpose” is the “collection of any

debts.” Ibid. Persons who meet the general definition

(and are not otherwise excluded) are subject to all of the

Act’s requirements. A separate definition covers businesses whose principal purpose is the “enforcement of

security interests,” but only “[f ]or the purpose of ” Section

1692f(6). Ibid. It follows that enforcing a security interest, by itself, is not debt collection, except for purposes of

11

Section 1692f(6). Otherwise, the additional, limitedpurpose definition of debt collector would be superfluous.

That reading comports with the FDCPA’s purposes.

The Act’s express objective is to protect consumers from

certain types of abusive practices. Congress reasonably

determined that enforcing security interests in accordance with applicable law does not present the same risks

as demanding payment from debtors directly. The

enforcement of security interests has long been subject

to an extensive body of state law that provides substantial safeguards. Section 1692f(6) itself reflects that Congress did not view enforcing security interests in general

as posing a concern. Respecting the distinction Congress drew between collecting debts and enforcing security interests is also consistent with Heintz v. Jenkins,

514 U.S. 291 (1995). Heintz did not address whether

enforcing a security interest is debt collection. It held

only that the Act does not exempt lawyers engaged in litigation if their acts otherwise constitute debt collection.

B. McCarthy did not engage in debt collection by

initiating a nonjudicial-foreclosure proceeding under Colorado law. Actions that are legally required to enforce a

security interest are not debt collection under the

FDCPA—except for purposes of 15 U.S.C. 1692f(6),

which is not at issue here. Nonjudicial foreclosure is “the

enforcement of [a] security interest[ ],” 15 U.S.C. 1692a(6),

and filing a notice with a public trustee is undisputedly a

necessary step in that process in Colorado. Deeming such

activities debt collection could bring the FDCPA into conflict with state law and effectively preclude compliance

with state foreclosure procedures. No sound basis exists

to assume Congress intended that result.

C. Petitioner’s contrary arguments lack merit. His

principal contention that foreclosure also constitutes a

12

direct and indirect attempt to collect a debt proves far

too much. On that view, all security-interest enforcement would likewise appear to be debt collection, rendering the additional definition of “debt collector” superfluous. Petitioner errs in contending (Br. 25) that the additional definition can be saved from superfluity by reading

it to reach only “classic ‘repo’ activity.” That ad hoc

interpretation has no grounding in the statute and does

not avoid surplusage in any event. Nor does the

FDCPA’s venue provision, 15 U.S.C. 1692i, classify all

foreclosure as debt collection. And the fact that the

FDCPA does not categorically exclude foreclosure

reflects that persons who undertake nonjudicial foreclosure or other methods of security-interest enforcement

are debt collectors for purposes of Section 1692f(6).

ARGUMENT

ENFORCEMENT OF A SECURITY INTEREST THROUGH A

NONJUDICIAL FORECLOSURE GENERALLY IS NOT

DEBT COLLECTION UNDER THE FDCPA

The FDCPA’s requirements generally apply only to a

“debt collector” engaged in activities “in connection with

the collection of any debt.” 15 U.S.C. 1692c(a); see

15 U.S.C. 1692c-1692g. The question here is whether

McCarthy engaged in debt collection triggering the

FDCPA provisions at issue when it initiated a nonjudicial

foreclosure against petitioner’s property. It did not. The

FDCPA draws a critical distinction between collecting

debts and enforcing security interests. The statute’s

text and structure make clear that enforcement of a

security interest, without more, is not debt collection

except for purposes of 15 U.S.C. 1692f(6), which is not

at issue in this case. Initiating a nonjudicial-foreclosure

proceeding in accordance with state law undisputedly

constitutes enforcement of a security interest. The

13

court of appeals therefore correctly concluded that initiating nonjudicial foreclosure is not debt collection for

purposes of the FDCPA provisions at issue.

A. Enforcement Of A Security Interest, Without More,

Generally Is Not Debt Collection Under The FDCPA

The FDCPA does not define the “collection” of a debt.

Its text and structure make clear, however, that enforcement of a security interest by itself generally is not debt

collection. That conclusion comports with the Act’s purposes and this Court’s precedent.

1. The FDCPA’s text establishes a two-tiered framework by defining two types of “debt collector” and

imposing different statutory requirements on each.

First, Section 1692a(6)’s opening sentence establishes a

general definition stating that “ ‘debt collector’ means

any person who uses any instrumentality of interstate

commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly,

debts owed or due or asserted to be owed or due

another.” 15 U.S.C. 1692a(6). A person who meets that

general definition (and is not otherwise excluded) is subject to all of the FDCPA’s provisions.

Second, Section 1692a(6)’s third sentence sets forth

an additional definition of “debt collector” that applies

only for purposes of one FDCPA provision. 1 It states

that, “[f ]or the purpose of section 1692f(6) of this title,

The second, intervening sentence clarifies that, “[n]otwithstanding” the exclusion in paragraph (F), “debt collector” does “include[ ]

any creditor who, in the process of collecting his own debts, uses any

name other than his own which would indicate that a third person is

collecting or attempting to collect such debts.” 15 U.S.C. 1692a(6).

1

14

such term also includes any person who uses any instrumentality of interstate commerce or the mails in any

business the principal purpose of which is the enforcement of security interests.” 15 U.S.C. 1692a(6). Section

1692f prohibits “debt collector[s]” from “us[ing] unfair

or unconscionable means to collect or attempt to collect

any debt.” 15 U.S.C. 1692f. Subsection (6) makes it “a

violation” of that prohibition to “[t]ak[e] or threaten[ ]

to take nonjudicial action to effect dispossession or disablement of property” if the debt collector lacks a “present right to possession of the property claimed as collateral through an enforceable security interest,” if

“there is no present intention to take possession of the

property,” or if “the property is exempt by law from

such dispossession or disablement.” 15 U.S.C. 1692f(6).

A person who meets Section 1692a(6)’s additional definition, but not the general definition, is a debt collector

only for purposes of Section 1692f(6) and is subject only

to that provision’s requirements.

It follows from those two definitions that enforcement of a security interest, standing alone, generally is

not debt collection under the FDCPA. It is debt collection only for the limited purpose of Section 1692f(6).

Section 1692a(6)’s third sentence, which states that the

term “debt collector” “also includes” businesses whose

principal purpose is “the enforcement of security interests,” establishes an additional definition. See Mount

Lemmon Fire Dist. v. Guido, No. 17-587 (Nov. 6, 2018),

slip op. 4 (“ ‘also’ ” in statutory definition “is a term of

enhancement; it means ‘in addition; besides’ and ‘likewise; too’ ” (citation omitted)). That additional definition

expands the term’s meaning beyond what the first sentence’s general definition covers.

15

A contrary reading would “flout[ ] the rule that ‘a statute should be construed so that effect is given to all its

provisions, so that no part will be inoperative or superfluous.’ ” Clark v. Rameker, 134 S. Ct. 2242, 2248 (2014)

(citation omitted). If “enforcement of security interests” were a form of debt collection, there would have

been no reason for Congress to have enacted that additional definition: every person who met the additional

definition would necessarily also satisfy the general

definition, rendering the additional definition superfluous. Courts are loath to read a statute to render a definition “unnecessary.” Roberts v. Sea-Land Servs., Inc.,

566 U.S. 93, 110 (2012). Congress’s inclusion of both definitions shows that it viewed enforcement of security

interests and debt collection to be distinct.

The FDCPA’s structure powerfully confirms that

conclusion. Congress limited the additional definition

of “debt collector” to one FDCPA provision, Section

1692f(6). As the FTC’s staff explained in commentary

thirty years ago, because the FDCPA’s definition of

debt collector “includes parties whose principal business is enforcing security interests only for [Section

1692f(6)] purposes, such parties (if they do not otherwise fall within the definition) are subject only to this provision and not to the rest of the FDCPA.” 53 Fed. Reg.

50,097, 50,108 (Dec. 13, 1988). Construing “enforcement

of security interests” to be a form of debt collection,

however, would nullify Congress’s decision to impose on

security-interest enforcers only that one requirement,

instead making them subject to the entire Act. See Roberts, 566 U.S. at 111 (rejecting interpretation that

16

would render superfluous a “carefully limited” statutory definition that applied only “[f ]or the purpose of ”

a particular subsection (citation omitted)). 2

2. Construing the FDCPA generally not to regulate

security-interest enforcement as debt collection comports

with the Act’s purposes. Congress made clear that it did

not intend categorically to bar lawful methods of enforcing consumers’ debts. It found that “[m]eans other than

misrepresentation or other abusive debt collection practices are available for the effective collection of debts” and

sought to “insure that those debt collectors who refrain

from using abusive debt collection practices are not competitively disadvantaged.” 15 U.S.C. 1692(c) and (e). Congress was focused on “abusive, deceptive, and unfair debt

collection practices” that “[e]xisting laws and procedures”

were “inadequate” to address. 15 U.S.C. 1692(a) and (b).

Enforcement of security interests in accordance with

applicable law does not implicate those concerns. Permitting security-interest holders to take or sell pledged

collateral provides creditors an alternative remedy that

does not depend on whether consumers agree or are

able to make payments. It therefore poses significantly

less risk than demanding payment from a consumer,

where the creditor or its agent may resort to abusive

tactics to persuade a consumer to pay.

Any risk of abuse is further reduced because enforcement of security interests is governed by an extensive,

The FDCPA’s legislative history indicates that this structure

was a considered compromise. Resp. Br. 25-27. An earlier bill

treated those engaged in “enforcement of security interests” as debt

collectors for all purposes, S. 918, 95th Cong., 1st Sess., § 803(f )

(1977 ), while another excluded them entirely, S. 1130, 95th Cong.,

1st Sess., § 802(8)(E) (1977 ). The enacted law struck a balance,

including such persons only for purposes of Section 1692f(6).

2

17

well-established body of state law, which prescribes

orderly procedures to enforce such interests and provides

substantial safeguards to consumers. See pp. 4-6, supra;

Resp. Br. 42-45. Creditors and their agents must “strictly

adhere to” state-law requirements, or else the foreclosure

will likely be void. 2 Dunaway § 17:2. There is no basis to

assume that Congress deemed those state-law mechanisms inadequate or intended to federalize this traditional area of property law.

To the contrary, the FDCPA’s text and structure

reflect that Congress did not perceive the mere enforcement of security interests in accordance with applicable

law as posing the same risk of consumer harms as the

debt-collection activity to which the Act applies. Section

1692f(6) specifically addresses taking “property claimed

as collateral through an enforceable security interest,”

15 U.S.C. 1692f(6)(A), and it permits a debt collector to

do so as long as the debt collector complies with applicable law and does not threaten to take collateral it does

not actually intend to take. Section 1692f(6) forbids a

debt collector to take “nonjudicial action” to “dispossess[ ]” or “disable[ ]” collateral only if (1) the debt collector is not legally entitled to do so, either because it

lacks a “right to possession” under a security interest

or the collateral is otherwise “exempt,” 15 U.S.C.

1692f(6)(A) and (C); or (2) the debt collector has no

“present intention” to take the property, 15 U.S.C.

1692f(6)(B). And Section 1692f(6) is the only FDCPA provision that applies to persons who are debt collectors

under the additional definition because they enforce

security interests. See 15 U.S.C. 1692a(6). Congress

thus determined that laws governing security-interest

enforcement (supplemented by a prohibition on false

threats) provide adequate protection for consumers.

18

Even petitioner accepts that Congress did not intend

to subject “typical * * * repossession agents (i.e., the

classic ‘repo men’)” to the Act’s other provisions. Pet. Br.

5; see id. at 25-26. That particular, self-help method of

security-interest enforcement often involves no direct state

supervision. If repossession does not implicate the Act’s

core concerns, then a fortiori neither do more formalized

state-law processes for enforcing security interests. 3

3. Heintz v. Jenkins, 514 U.S. 291 (1995), on which

petitioner relies (Br. 19), is not to the contrary. The

“issue before [the Court]” in Heintz “[wa]s whether the

term ‘debt collector’ in the [FDCPA] applies to a lawyer

who ‘regularly,’ through litigation, tries to collect consumer debts.” 514 U.S. at 292 (citation omitted). The

Court held that it does. See id. at 294-299.

Heintz had no occasion to address whether enforcing

a security interest constitutes debt collection, because

the case involved a direct effort to obtain repayment.

The creditor in Heintz sued a consumer to recover the

balance due on a defaulted loan, and the creditor’s lawyer

wrote to the consumer’s lawyer “[a]s part of an effort to

settle the suit,” listing the amount due. 514 U.S. at 293.

The dispute was not whether that communication otherwise constituted debt collection, but whether it was nonetheless exempt from the FDCPA on the ground that the

Act does not “apply to lawyers engaged in litigation.” Id.

at 294. The Court rejected that argument, reasoning

that “a lawyer who regularly tries to obtain payment of

consumer debts through legal proceedings is a lawyer

who regularly ‘attempts’ to ‘collect’ those consumer

debts,” and Congress had enacted but since repealed an

As discussed below, see pp. 29-31, infra, petitioner’s contention

that the additional definition of “debt collector” is confined to repossession agents is incorrect on its own terms.

3

19

exception for lawyers collecting debts on clients’ behalf.

Ibid. (citation omitted). Heintz thus stands only for the

proposition that a lawyer who engages in conduct that

constitutes debt collection in the course of litigation is

not exempt from the Act on that basis. It does not speak

to whether enforcing a security interest is debt collection.

B. Initiating A Nonjudicial-Foreclosure Proceeding

Constitutes Enforcement Of A Security Interest And So

Generally Is Not Debt Collection Under The FDCPA

Because enforcement of a security interest by itself is

not debt collection under the FDCPA (apart from Section

1692f(6)), a person cannot violate the Act by taking actions

that are legally required to enforce a security interest.

That is dispositive here because the initiation of a Colorado nonjudicial-foreclosure proceeding undisputedly was

a required step in enforcing a security interest. 4

1. The FDCPA does not define “security interests” or

“enforcement,” so the terms should be given their “ordinary meaning.” Encino Motorcars, LLC v. Navarro,

138 S. Ct. 1134, 1140 (2018) (citation omitted); see

Heintz, 514 U.S. at 294. “Security interest” is a legal

Although not implicated here, actions that are clearly incidental

to the enforcement of a security interest also would not constitute

debt collection (unless they involve an effort to obtain repayment of

the debt) regardless of whether state law strictly requires them. For

example, state law might not require a repossession agent to send a

consumer a notice of the specific time the agent will repossess property, but the agent might do so as a courtesy to the consumer. There

is no basis to conclude that Congress intended to regulate that type

of purely informational communication as debt collection. This case

does not present that question because, as explained below, state law

undisputedly required McCarthy to file the notice with the public

trustee to initiate a nonjudicial foreclosure.

4

20

term, and in ordinary legal usage, it generally refers to

a property interest given to a creditor to secure a debt,

granting the creditor the right to take or sell the property if the debtor does not pay. Black’s Law Dictionary

did not separately define “security interest” when the

FDCPA was enacted, but it explained that the term

“security” “is usually applied to an obligation, pledge,

mortgage, deposit, lien, etc., given by a debtor in order

to make sure the payment or performance of his debt, by

furnishing the creditor with a resource to be used in case

of failure in the principal obligation.” Black’s Law

Dictionary 1522 (4th ed. 1951). Contemporaneous nonlegal dictionaries mirrored that meaning of “security.”

See, e.g., Webster’s New International Dictionary 2263

(2d ed. 1958) (Webster’s Second ) (“Law. a. Something

given, deposited, or pledged, to make secure, or certain,

the fulfillment of an obligation, the payment of debt, etc.;

property given or serving to render secure the enjoyment or enforcement of a right.”). When “security interest” was added to Black’s Law Dictionary two years

after the Act’s enactment, it was defined as (inter alia)

“[a] form of interest in property which provides that the

property may be sold on default in order to satisfy the

obligation for which the security interest is given.”

Black’s Fifth 1217. The term carries a substantially similar meaning today. See Black’s Tenth 1562. 5

“Enforce” means (inter alia) “[t]o put in force,” to

“cause to take effect,” or “to give effect to.” Webster’s

Second 847; see Black’s Fifth 474; Black’s Tenth 645.

“[E]nforcement of security interests,” 15 U.S.C. 1692a(6),

therefore means giving force or effect to a creditor’s

Other federal statutes adopt similar definitions, tailored to their

particular contexts. See 7 U.S.C. 1631(c)(7); 11 U.S.C. 101(51),

1110(d)(2), 1168(d)(2); 26 U.S.C. 6323(h)(1); 49 U.S.C. 14301(a)(3).

5

21

right to take or compel the sale of pledged property

in accordance with applicable law. When Congress

referred to “enforcement of security interests,” it presumably had in mind the methods of giving effect to

such rights then available under state law. For example, in the case of personal property, if a consumer

defaults on the debt, the holder of the security interest

often may take possession of or disable the property in

certain circumstances. U.C.C. § 9-609 (2017); see id.

§ 9-607(a) (describing other actions secured party may

take following a default).

Enforcement of a security interest in real property

has long taken the form of foreclosing on a mortgage—

typically through a proceeding to compel the sale of mortgaged property. See, e.g., William F. Walsh, Treatise on

Mortgages § 67, at 278 (1934). Foreclosure is critically

distinct from an action to recover on a consumer’s

personal liability to repay a debt—including to recover

any amount that remains unpaid after the property has

been sold. See Restatement § 8.2 & cmt. a. As respondent

observes (Br. 4, 21), at common law, actions to foreclose

on a mortgage were distinct from actions to recover a debt

from the mortgagor personally. Today, a State may permit a creditor to do both in one proceeding—i.e., to foreclose on a mortgage, and then to obtain a judgment

against the consumer for any deficiency, or vice versa—

but the two remedies remain distinct. See Restatement

§ 8.2. When foreclosure is divorced from any effort to

recover a remaining deficiency from the consumer, it constitutes enforcement of a security interest and so generally is not debt collection under the FDCPA.

2. Commencing a Colorado nonjudicial-foreclosure

proceeding, as McCarthy did here, is the enforcement of

a security interest. Colorado’s process allows a creditor

22

with a security interest in real property to request that

the public trustee sell the property to enforce that interest. If the sale is approved, the trustee sells the property

and distributes the proceeds—first to lienholders, then

the remainder if any to the owner. Although Colorado’s

procedure involves a court, the creditor cannot obtain a

deficiency judgment in the same proceeding, but must

file a separate suit. See pp. 7-8, supra.

Because Colorado’s nonjudicial-foreclosure process is

a method for enforcing a security interest, action that is

legally required to invoke or prosecute a nonjudicialforeclosure proceeding is not debt collection under the

FDCPA (except for 15 U.S.C. 1692f(6)). In this case,

petitioner has not disputed that filing of the notice of election and demand with a public trustee is a required step

in pursuing nonjudicial foreclosure. McCarthy therefore

did not engage in debt collection triggering the FDCPA

provisions at issue here. 6

That conclusion also avoids potentially substantial but

likely unintended interference by federal law with statelaw processes that do not implicate the problems the

Consistent with this understanding, in a 1992 opinion letter, FTC

staff stated their view that the FDCPA does not apply to “a notice

sent by an attorney collector in connection with a non-judicial foreclosure” that was required “by statute as a condition precedent to the

enforcement of a contractual obligation between a creditor and a

debtor, whether by judicial or non-judicial process.” Office of the Secretary, FTC, Staff Opinion Letter, 1992 WL 12622329, at *3 (Oct. 8,

1992). In Vien-Phuong Thi Ho v. ReconTrust Co., 858 F.3d 568 (9th

Cir.), cert. denied, 138 S. Ct. 504 (2017), the Bureau filed an amicus

brief, at the court of appeals’ invitation, arguing that notices

required by state law to be sent to consumers to effectuate a nonjudicial foreclosure did constitute debt collection under the Act. See Gov’t

Br. at 6-20, Ho, supra (No. 10-56884). The Bureau has reconsidered

that position and now endorses the position set forth in this brief.

6

23

FDCPA states Congress sought to address. For example,

as the court of appeals observed, Pet. App. 10a-11a, the

FDCPA prohibits a debt collector, in connection with a

debt, from communicating with third parties, 15 U.S.C.

1692c(b), or directly with a consumer whom a debt collector knows is represented by an attorney, 15 U.S.C.

1692c(a)(2). But state law—in Colorado and elsewhere—

often requires a party pursuing nonjudicial foreclosure to

do both, by advertising the foreclosure sale and sending

certain notices to the debtor. See Colo. R. Civ. P. 120(a)

and (b); Pet. App. 10a-11a; see also Vien-Phuong Thi Ho

v. ReconTrust Co., 858 F.3d 568, 575 (9th Cir.) (describing

California law), cert. denied, 138 S. Ct. 504 (2017).

It is highly unlikely that Congress intended to preclude creditors from supplying notices to the public and to

consumers that States require. Indeed, in 15 U.S.C.

1692n, Congress disclaimed any intention to “annul, alter,

or affect, or exempt any person subject to the provisions

of [the Act] from complying with the laws of any State

with respect to debt collection practices” unless they are

“inconsistent with” the FDCPA. Ibid. Given that state

law typically requires strict compliance with foreclosure

procedures, see pp. 5-6, supra, construing the FDCPA to

preclude compliance with those procedures could impede

state foreclosures. It is especially improbable that Congress intended the FDCPA to outlaw notices to the consumer and the public required by state law, because such

notices can benefit consumers in multiple ways—for

example, keeping consumers apprised of the proceedings

and their rights, and encouraging competitive bidding on

property to be sold. See Resp. Br. 43-45.

3. Although taking steps legally required to effectuate a nonjudicial foreclosure does not constitute debt

24

collection for most FDCPA provisions, entities that pursue such foreclosures remain subject to important constraints. First, such entities must comply with applicable state law; otherwise, the foreclosure sale will likely

be invalid. See 2 Dunaway § 17:2. Second, entities that

meet the additional definition of “debt collector”

because their principal purpose is enforcing security

interests are subject to the requirements of 15 U.S.C.

1692f(6). Such entities therefore may take or threaten

nonjudicial action to dispossess or disable property only

if they have an enforceable security interest, have the

present intention to do so, and doing so is not otherwise

barred by law. Ibid. 7

Third, a person who engages in security-interest

enforcement but who goes further and undertakes other

In a footnote, the court of appeals stated that those who engage

in nonjudicial foreclosures are not subject to Section 1692f(6). Pet.

App. 7a-8a n.4. The court observed that “[Section] 1692f(6) prohibits

‘dispossession or disablement of property’ when the security

enforcer has no ‘present right to possession of the property,’ or

when the enforcer has no ‘present intention to take possession of the

property.’ ” Id. at 8a n.4. It stated that “[a] non-judicial foreclosure

proceeding does not fit this bill” because the security-interest

enforcer “has no present right to possession of the property,” and

instead “[i]t is the public trustee who holds the deed of trust and sells

the property.” Ibid. That statement was not necessary to the court’s

judgment, but it is incorrect. A person does not violate Section

1692f(6) by taking steps to carry out a nonjudicial foreclosure in

accordance with state law simply because a trustee, rather than the

person commencing foreclosure, formally holds the present right to

possession. In any event, the court appears to have conflated whether

a person carrying out a nonjudicial foreclosure is subject to Section

1692f(6) with whether the person’s conduct violates that provision.

Under the Act’s plain terms, all debt collectors—including enforcers

of security interests, who are covered only under Section 1692a(6)’s

additional definition—are subject to, and must comply with, Section

1692f(6).

7

25

acts that themselves constitute debt collection may be

subject to the FDCPA like anyone else. For example, a

firm hired to pursue nonjudicial foreclosure that sends

the required pre-sale notices to a consumer—but also

sends letters demanding payment or using the threat of

foreclosure to pressure the consumer to pay—engages

in debt collection, even though the foreclosure itself is

not debt collection. Similarly, if an entity that seeks

foreclosure also pursues a deficiency judgment, the latter conduct would be debt collection. See, e.g., McNair

v. Maxwell & Morgan PC, 893 F.3d 680, 683 (9th Cir.

2018); Cohen v. Rosicki, Rosicki & Assocs., P.C.,

897 F.3d 75, 81 n.7 (2d Cir. 2018). The FDCPA does not

immunize persons who enforce security interests from

its requirements when they regularly engage in additional conduct that constitutes debt collection under the

Act.

Petitioner contends that “it is difficult to draw an administrable line” between enforcement of security interests and “ ‘more aggressive collection efforts.’ ” Pet. Br.

18 (quoting Pet. App. 12a). But drawing that line has not

proven too hard for federal courts in practice. 8 Most

States define precisely when the nonjudicial-foreclosure

process begins—typically, when a notice of default or

See, e.g., Ho, 858 F.3d at 574 (communications that were “limited to the foreclosure process,” “didn’t request payment,” and

“merely informed” consumer about foreclosure process were not

debt collection); Reese v. Ellis, Painter, Ratterree & Adams, LLP,

678 F.3d 1211, 1218 (11th Cir. 2012) (defendant was engaged in debt

collection because, rather than strictly adhering to state notice

requirements, it made a demand for payment that was not required

to effectuate nonjudicial foreclosure); Piper v. Portnoff Law

Assocs., Ltd., 396 F.3d 227, 233-234 (3d Cir. 2005) (letters that

“demanded the personal payment of money” were debt collection

even though debt collector purportedly sought to “enforce a lien”).

8

26

similar document is served or recorded. 2 Dunaway

§ 17:1. If communications occur before the process may

commence, they likely are not enforcement of a security

interest.

C. Petitioner’s Contrary Arguments Lack Merit

1. a. Petitioner principally contends (Br. 14-20,

24-26) that, regardless of whether nonjudicial foreclosure constitutes enforcement of a security interest, it is

also debt collection and thus falls under the FDCPA. In

his view (Br. 25), the Act applies to persons who collect

debts by means of enforcing a security interest, and

nonjudicial foreclosure constitutes both a “ ‘direct[ ]

[and] indirect[ ]’ method of collecting a debt.” Id. at 14

(quoting 15 U.S.C. 1692a(6)). That is incorrect.

Petitioner first argues (Br. 14-15) that “[n]on-judicial

foreclosure is a ‘direct’ attempt to collect a debt”

because state law generally requires a party seeking

foreclosure to send notices to the consumer that send a

“message” equivalent to a demand for repayment. That

is mistaken. The FDCPA’s text makes the person’s

actual conduct, not an implicit “message” a consumer

might perceive from it, the touchstone in identifying

who is a debt collector. See 15 U.S.C. 1692a(6). In any

event, although those required notices advise debtors of

their right to avoid foreclosure by paying the debt,

advising consumers of that state-law right is not tantamount to a demand for repayment. Such a notice

apprises the consumer that the creditor intends to pursue foreclosure instead of seeking repayment from the

consumer directly of part or all of the debt and that the

consumer has the option of repaying.

Moreover, other methods of enforcing security interests exist that similarly require sending notices to con-

27

sumers and that even petitioner does not contend constitute debt collection. For example, petitioner holds

out “classic ‘repo’ activity,” such as repossession of a

vehicle, as the paradigmatic means of enforcing security

interests that is not debt collection. Pet. Br. 25. But in

the case of vehicle repossession, the model U.C.C.

requires that notice be provided to consumers after the

collateral is taken but before it is disposed of, which

informs the consumer of his rights to redeem the collateral by paying the balance owed. U.C.C. § 9-614 (2017);

see id. § 9-623 (redemption rights). Petitioner’s theory

cannot explain why those notices are not debt collection

but notices initiating nonjudicial foreclosure are.

Petitioner’s argument also proves far too much. If

he were correct that nonjudicial foreclosure constitutes

debt collection because it has the intent or effect of persuading the consumer to repay the debt, the same would

appear to be true of any other form of enforcing security

interests. For example, petitioner acknowledges (Br.

25-26) that “changing locks” is the enforcement of a

security interest and is not “debt collection” under the

Act. But physically disabling a consumer’s property

(e.g., a vehicle) is at least equally likely to have the

intent and effect of inducing the consumer to pay, and it

provides a much more powerful inducement to pay than

a “classic dunning letter[ ].” Pet. Br. 16; see generally

Michael Corkery & Jessica Silver-Greenberg, Miss a

Payment? Good Luck Moving That Car, N.Y. Times,

Sept. 24, 2014 (addressing modern electronic-disabling

technology). Even if formal notices are not required, a

tow truck removing a consumer’s vehicle from his driveway sends at least as strong a “message” to an “ordinary

consumer” (Pet. Br. 15) as a notice initiating a nonjudicialforeclosure proceeding.

28

Petitioner also contends that “non-judicial foreclosure

is an ‘indirect’ attempt to collect a debt” because a “foreclosure sells the house to pay the debt” and thereby “liquidat[es] the borrower’s debt.” Pet. Br. 19-20 (emphasis

omitted). 9 That argument likewise proves too much.

Every enforcement of a security interest—whether by

repossession or by power of sale—necessarily entails

“payment or liquidation” of a debt in the same sense as

foreclosure. The purpose of a security interest is to

secure the consumer’s obligation to repay by giving the

creditor recourse against particular property if the consumer defaults. See pp. 4-6, 19-21, supra. And the

intended result of repossessing property is that either

the security-interest holder will recoup some or all the

value of the defaulted debt (e.g., by selling the repossessed property) or the consumer will pay the debt.

Either way, repossession (if successful) results in satisfying part or all of the outstanding debt. The fact that

the repossession agent itself may not sell the property

is equally immaterial. Once a consumer’s property has

been taken from him, whether the creditor keeps or

sells the property—and if it is sold, who conducts the

sale—has no bearing on whether the debt has been liquidated.

Petitioner’s direct and indirect debt-collection arguments thus would appear to apply to all security-interest

enforcement. The FDCPA should not be construed to

render Section 1692a(6)’s additional definition of “debt

collector” “superfluous in all but the most unusual circumstances.” TRW Inc. v. Andrews, 534 U.S. 19, 29

The general definition of “debt collector” refers to “indirect[ ]”

efforts to collect debts only with respect to persons who “regularly

collect[ ]” debts, not with respect to persons engaged in a business the

“principal purpose” of which is to collect debts. 15 U.S.C. 1692a(6).

9

29

(2001); see id. at 31 (rejecting interpretation under

which an “express exception would be rendered ‘insignificant, if not wholly superfluous’ ” (citation omitted)).

b. Petitioner argues (Br. 25) that his position would

not render Section 1692a(6)’s additional definition of

“debt collector” superfluous if that definition is construed

to cover only “classic ‘repo’ activity.” That arbitrarily narrow reading of the additional definition lacks any basis in

text or logic, and does not even save the additional definition from superfluity under petitioner’s theory.

Petitioner’s argument requires reading “the enforcement of security interests” in Section 1692a(6) as a

cryptic euphemism for one specific form of self-help.

But “enforcement” and “security interests” are general

terms whose ordinary meanings sweep far beyond

repossession of the type petitioner describes. See

pp. 19-21, supra. “Without some indication to the contrary, general words * * * are to be accorded their full

and fair scope” and thus “must be given general effect,”

and not “arbitrarily limited.” Antonin Scalia & Bryan

A. Garner, Reading Law: The Interpretation of Legal

Texts 101 (2012); see id. at 101-106; see, e.g., Oncale v.

Sundowner Offshore Servs., Inc., 523 U.S. 75, 79-80

(1998). In addition, Congress referred specifically to

“dispossession” and “disablement” elsewhere in the

same statute, 15 U.S.C. 1692f(6), and petitioner reads

those words (Br. 25-26) to apply only to “classic ‘repo’

activity.” The “presum[ption] that Congress acts intentionally and purposely” in “includ[ing] particular language in one section of [the] statute but omit[ting] it in

another section of the same Act,” Russello v. United

States, 464 U.S. 16, 23 (1983) (citation omitted), counsels

strongly against reading the different, broader phrase

“enforcement of security interests” in Section 1692a(6)

30

narrowly to encompass only “classic ‘repo’ activity.” Pet.

Br. 25.

Moreover, construing Section 1692a(6)’s definition to

encompass only “classic ‘repo’ activity,” Pet. Br. 25, and

thus to exempt only that activity from nearly all of the

FDCPA’s provisions, would turn the Act upside-down.

A repossession agency that physically removes pledged

collateral from a consumer’s residence is if anything

more naturally described as “collect[ing]” from the consumer than a creditor’s agent hired to file foreclosure

papers. 15 U.S.C. 1692a(6). And the abusive practices

and other problems that concerned Congress, see

15 U.S.C. 1692(a), seem more likely to arise if a repossession agency interacts with consumers in person. It

would be incongruous to impose fewer or no restrictions

on repossession that may involve face-to-face confrontations with consumers than on filing papers with a

state official to commence a proceeding to sell collateral

in an orderly manner—which may involve no personal

interaction with the consumer at all.

Petitioner’s interpretation would also likely leave a significant and unexplained gap in the Act’s coverage.

Properly construed, the FDCPA applies to persons who

demand repayment of a debt in kind (rather than in cash),

or who take a consumer’s unsecured property to satisfy

such a debt, because neither of those constitutes enforcing

a security interest. But on petitioner’s reading, such persons would appear to be exempt: in petitioner’s view,

repossessing property is not debt collection—so long as

the repossession agent does not communicate with the

consumer and does not itself sell the property—and

repossessing unsecured property is not enforcement of

a security interest. It is implausible that Congress left

a loophole in the statute for debt collectors who do not

31

deal in cash and intended to leave consumers unprotected from efforts to reclaim unsecured property, yet

intended to subject foreclosure pursuant to state law to

all of the FDCPA’s requirements.

In any event, petitioner’s atextual reading of

“enforcement of security interests” to mean only “classic ‘repo’ activity” (Br. 25) does not even save the additional definition of “debt collector” from becoming surplusage on his theory. Petitioner’s arguments that nonjudicial foreclosure constitutes a direct and indirect

method of debt collection apply with full force to repossession. See pp. 27-29, supra. Repossession has the intent and effect of inducing repayment to at least the

same extent as nonjudicial foreclosure, and its intended

result is that either the debtor will repay the debt or the

collateral will be sold to satisfy part or all of the debt.

If the collateral is sold, the FDCPA’s application cannot

sensibly turn on whether the repossession agent itself

sells the collateral or turns it over to the creditor to sell.

Petitioner’s ad hoc interpretation of the additional,

limited-purpose definition of debt collector leaves it a

dead letter.

2. Petitioner also incorrectly contends (Br. 21) that

the venue requirement in 15 U.S.C. 1692i(a)(1) supports

his view that “foreclosure constitutes ‘debt collection.’ ”

Section 1692i(a)(1) provides that “[a]ny debt collector

who brings any legal action on a debt against any consumer shall[,] * * * in the case of an action to enforce

an interest in real property securing the consumer’s

obligation, bring such action only in a judicial district or

similar legal entity in which such real property is

located.” Ibid. That text does not classify an “action to

enforce an interest in real property securing the consumer’s obligation” as “debt collection.” It simply

32

requires persons who are otherwise “debt collectors” to

bring actions to enforce security interests in real property in specified venues. See Kaltenbach v. Richard,

464 F.3d 524, 529 (5th Cir. 2006).

That reading does not leave Section 1692i with “no

realistic application.” Pet. Br. 21. Many entities that satisfy the general definition of “debt collector” engage in the

type of legal actions that Section 1692i governs. In particular, the provision often would apply to entities whose

principal purpose is carrying out judicial foreclosures—

which in some States is the exclusive means of foreclosing on residential mortgages. Moreover, Section 1692i

does not speak to nonjudicial foreclosures at all, which do

not involve bringing a “legal action on a debt against [a]

consumer.” Pet. App. 9a (citation omitted); see 2 Dunaway § 16:1; Ho, 858 F.3d at 570-571.

3. Finally, petitioner contends (Br. 21) that Congress

“excluded certain groups, but not entities pursuing foreclosures, from the FDCPA’s scope,” and infers that nonjudicial foreclosure therefore must be covered. But the

absence of such an exclusion reflects that persons who

engage in nonjudicial foreclosure (and other enforcement of security interests) are debt collectors for purposes of one FDCPA provision, Section 1692f(6). Petitioner’s assertion (Br. 23-24) that the Act’s history shows

Congress did not intend to exempt mortgages fails for

the same reason: mortgage debt is not categorically

exempt from the Act, and debt collection in connection

with a mortgage may trigger the FDCPA. Congress

simply made clear that it did not consider the enforcement of security interests by itself to be debt collection.

33

CONCLUSION

The judgment of the court of appeals should be

affirmed.

Respectfully submitted.

MARY MCLEOD

General Counsel

JOHN R. COLEMAN

Deputy General Counsel

STEVEN Y. BRESSLER

Assistant General Counsel

NANDAN M. JOSHI

KRISTIN BATEMAN

Counsel

Bureau of Consumer

Financial Protection

NOVEMBER 2018

NOEL J. FRANCISCO

Solicitor General

JEFFREY B. WALL

Deputy Solicitor General

JONATHAN C. BOND

Assistant to the Solicitor

General

APPENDIX

1.

15 U.S.C. 1692 provides:

Congressional findings and declaration of purpose

(a)

Abusive practices

There is abundant evidence of the use of abusive,

deceptive, and unfair debt collection practices by many

debt collectors. Abusive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of

individual privacy.

(b)

Inadequacy of laws

Existing laws and procedures for redressing these

injuries are inadequate to protect consumers.

(c)

Available non-abusive collection methods

Means other than misrepresentation or other abusive debt collection practices are available for the

effective collection of debts.

(d)

Interstate commerce

Abusive debt collection practices are carried on to a

substantial extent in interstate commerce and through

means and instrumentalities of such commerce. Even

where abusive debt collection practices are purely intrastate in character, they nevertheless directly affect

interstate commerce.

(e)

Purposes

It is the purpose of this subchapter to eliminate

abusive debt collection practices by debt collectors, to

insure that those debt collectors who refrain from using

abusive debt collection practices are not competitively

(1a)

2a

disadvantaged, and to promote consistent State action

to protect consumers against debt collection abuses.

2.

15 U.S.C. 1692a provides:

Definitions

As used in this subchapter—

(1) The term “Bureau” means the Bureau of

Consumer Financial Protection.

(2) The term “communication” means the conveying of information regarding a debt directly or

indirectly to any person through any medium.

(3) The term “consumer” means any natural

person obligated or allegedly obligated to pay any

debt.

(4) The term “creditor” means any person who

offers or extends credit creating a debt or to whom a

debt is owed, but such term does not include any

person to the extent that he receives an assignment

or transfer of a debt in default solely for the purpose

of facilitating collection of such debt for another.

(5) The term “debt” means any obligation or

alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of

the transaction are primarily for personal, family, or

household purposes, whether or not such obligation

has been reduced to judgment.

(6) The term “debt collector” means any person

who uses any instrumentality of interstate commerce

or the mails in any business the principal purpose of

3a

which is the collection of any debts, or who regularly

collects or attempts to collect, directly or indirectly,

debts owed or due or asserted to be owed or due

another. Notwithstanding the exclusion provided

by clause (F) of the last sentence of this paragraph,

the term includes any creditor who, in the process of

collecting his own debts, uses any name other than

his own which would indicate that a third person is

collecting or attempting to collect such debts. For

the purpose of section 1692f(6) of this title, such

term also includes any person who uses any instrumentality of interstate commerce or the mails in any

business the principal purpose of which is the enforcement of security interests. The term does not

include—

(A) any officer or employee of a creditor while,

in the name of the creditor, collecting debts for

such creditor;

(B) any person while acting as a debt collector for another person, both of whom are related

by common ownership or affiliated by corporate

control, if the person acting as a debt collector

does so only for persons to whom it is so related

or affiliated and if the principal business of such

person is not the collection of debts;

(C) any officer or employee of the United

States or any State to the extent that collecting

or attempting to collect any debt is in the performance of his official duties;

(D) any person while serving or attempting to

serve legal process on any other person in connection with the judicial enforcement of any debt;

4a

(E) any nonprofit organization which, at the

request of consumers, performs bona fide consumer credit counseling and assists consumers in

the liquidation of their debts by receiving payments from such consumers and distributing such

amounts to creditors; and

(F) any person collecting or attempting to

collect any debt owed or due or asserted to be

owed or due another to the extent such activity (i)

is incidental to a bona fide fiduciary obligation or

a bona fide escrow arrangement; (ii) concerns a

debt which was originated by such person; (iii)

concerns a debt which was not in default at the

time it was obtained by such person; or (iv) concerns a debt obtained by such person as a

secured party in a commercial credit transaction

involving the creditor.

(7) The term “location information” means a

consumer’s place of abode and his telephone number at such place, or his place of employment.

(8) The term “State” means any State, territory, or possession of the United States, the District

of Columbia, the Commonwealth of Puerto Rico, or

any political subdivision of any of the foregoing.

5a

3.

15 U.S.C. 1692b provides:

Acquisition of location information

Any debt collector communicating with any person

other than the consumer for the purpose of acquiring

location information about the consumer shall—

(1) identify himself, state that he is confirming

or correcting location information concerning the

consumer, and, only if expressly requested, identify

his employer;

(2)

not state that such consumer owes any debt;

(3) not communicate with any such person more

than once unless requested to do so by such person

or unless the debt collector reasonably believes that

the earlier response of such person is erroneous or

incomplete and that such person now has correct or

complete location information;

(4)

not communicate by post card;

(5) not use any language or symbol on any envelope or in the contents of any communication effected

by the mails or telegram that indicates that the debt

collector is in the debt collection business or that the

communication relates to the collection of a debt;

and

(6) after the debt collector knows the consumer

is represented by an attorney with regard to the

subject debt and has knowledge of, or can readily

ascertain, such attorney’s name and address, not

communicate with any person other than that

attorney, unless the attorney fails to respond within

a reasonable period of time to communication from

the debt collector.

6a

4.

15 U.S.C. 1692c provides:

Communication in connection with debt collection

(a)

Communication with the consumer generally

Without the prior consent of the consumer given

directly to the debt collector or the express permission

of a court of competent jurisdiction, a debt collector

may not communicate with a consumer in connection

with the collection of any debt—

(1) at any unusual time or place or a time or

place known or which should be known to be inconvenient to the consumer. In the absence of knowledge of circumstances to the contrary, a debt collector shall assume that the convenient time for

communicating with a consumer is after 8 o’clock

antemeridian and before 9 o’clock postmeridian,

local time at the consumer’s location;

(2) if the debt collector knows the consumer is

represented by an attorney with respect to such

debt and has knowledge of, or can readily ascertain,

such attorney’s name and address, unless the attorney fails to respond within a reasonable period of

time to a communication from the debt collector or

unless the attorney consents to direct communication with the consumer; or

(3) at the consumer’s place of employment if the

debt collector knows or has reason to know that the

consumer’s employer prohibits the consumer from

receiving such communication.

(b)

Communication with third parties

Except as provided in section 1692b of this title,

without the prior consent of the consumer given directly

7a

to the debt collector, or the express permission of a

court of competent jurisdiction, or as reasonably necessary to effectuate a postjudgment judicial remedy, a

debt collector may not communicate, in connection with

the collection of any debt, with any person other than

the consumer, his attorney, a consumer reporting

agency if otherwise permitted by law, the creditor, the

attorney of the creditor, or the attorney of the debt

collector.

(c)

Ceasing communication

If a consumer notifies a debt collector in writing

that the consumer refuses to pay a debt or that the

consumer wishes the debt collector to cease further

communication with the consumer, the debt collector

shall not communicate further with the consumer with

respect to such debt, except—

(1) to advise the consumer that the debt collector’s further efforts are being terminated;

(2) to notify the consumer that the debt collector or creditor may invoke specified remedies which

are ordinarily invoked by such debt collector or

creditor; or

(3) where applicable, to notify the consumer

that the debt collector or creditor intends to invoke

a specified remedy.

If such notice from the consumer is made by mail,

notification shall be complete upon receipt.

(d)

“Consumer” defined

For the purpose of this section, the term “consumer”

includes the consumer’s spouse, parent (if the consumer

is a minor), guardian, executor, or administrator.

8a

5.

15 U.S.C. 1692d provides:

Harassment or abuse

A debt collector may not engage in any conduct the

natural consequence of which is to harass, oppress, or

abuse any person in connection with the collection of a

debt. Without limiting the general application of the

foregoing, the following conduct is a violation of this

section:

(1) The use or threat of use of violence or other

criminal means to harm the physical person, reputation, or property of any person.

(2) The use of obscene or profane language or

language the natural consequence of which is to

abuse the hearer or reader.

(3) The publication of a list of consumers who

allegedly refuse to pay debts, except to a consumer

reporting agency or to persons meeting the requirements of section 1681a(f ) or 1681b(3) 1 of this title.

(4) The advertisement for sale of any debt to

coerce payment of the debt.

(5) Causing a telephone to ring or engaging any

person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any

person at the called number.

(6) Except as provided in section 1692b of this

title, the placement of telephone calls without meaningful disclosure of the caller’s identity.

1

See References in Text note below

9a

6.

15 U.S.C. 1692e provides:

False or misleading representations

A debt collector may not use any false, deceptive, or

misleading representation or means in connection with

the collection of any debt. Without limiting the general application of the foregoing, the following conduct

is a violation of this section:

(1) The false representation or implication that

the debt collector is vouched for, bonded by, or affiliated with the United States or any State, including

the use of any badge, uniform, or facsimile thereof.

(2)

The false representation of—

(A) the character, amount, or legal status of

any debt; or

(B) any services rendered or compensation

which may be lawfully received by any debt collector for the collection of a debt.

(3) The false representation or implication that

any individual is an attorney or that any communication is from an attorney.

(4) The representation or implication that nonpayment of any debt will result in the arrest or

imprisonment of any person or the seizure, garnishment, attachment, or sale of any property or wages of

any person unless such action is lawful and the debt

collector or creditor intends to take such action.

(5) The threat to take any action that cannot

legally be taken or that is not intended to be taken.

10a

(6) The false representation or implication that

a sale, referral, or other transfer of any interest in a

debt shall cause the consumer to—

(A) lose any claim or defense to payment of

the debt; or

(B) become subject to any practice prohibited by this subchapter.

(7) The false representation or implication that

the consumer committed any crime or other conduct

in order to disgrace the consumer.

(8) Communicating or threatening to communicate to any person credit information which is

known or which should be known to be false, including the failure to communicate that a disputed debt

is disputed.

(9) The use or distribution of any written communication which simulates or is falsely represented

to be a document authorized, issued, or approved by

any court, official, or agency of the United States or

any State, or which creates a false impression as to

its source, authorization, or approval.

(10) The use of any false representation or deceptive means to collect or attempt to collect any debt or

to obtain information concerning a consumer.

(11) The failure to disclose in the initial written

communication with the consumer and, in addition,

if the initial communication with the consumer is

oral, in that initial oral communication, that the debt

collector is attempting to collect a debt and that any

information obtained will be used for that purpose,

and the failure to disclose in subsequent communi-

11a

cations that the communication is from a debt collector, except that this paragraph shall not apply to

a formal pleading made in connection with a legal

action.

(12) The false representation or implication that

accounts have been turned over to innocent purchasers for value.

(13) The false representation or implication that

documents are legal process.

(14) The use of any business, company, or organization name other than the true name of the debt

collector’s business, company, or organization.

(15) The false representation or implication that

documents are not legal process forms or do not

require action by the consumer.

(16) The false representation or implication that

a debt collector operates or is employed by a consumer reporting agency as defined by section

1681a(f ) of this title.

7.

15 U.S.C. 1692f provides:

Unfair practices

A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt.

Without limiting the general application of the foregoing, the following conduct is a violation of this section:

(1) The collection of any amount (including any

interest, fee, charge, or expense incidental to the

principal obligation) unless such amount is expressly

12a

authorized by the agreement creating the debt or

permitted by law.

(2) The acceptance by a debt collector from any

person of a check or other payment instrument postdated by more than five days unless such person is

notified in writing of the debt collector’s intent to

deposit such check or instrument not more than ten

nor less than three business days prior to such

deposit.

(3) The solicitation by a debt collector of any

postdated check or other postdated payment instrument for the purpose of threatening or instituting

criminal prosecution.

(4) Depositing or threatening to deposit any

postdated check or other postdated payment instrument prior to the date on such check or instrument.

(5) Causing charges to be made to any person

for communications by concealment of the true purpose of the communication. Such charges include,

but are not limited to, collect telephone calls and telegram fees.

(6) Taking or threatening to take any nonjudicial action to effect dispossession or disablement of

property if—

(A) there is no present right to possession of

the property claimed as collateral through an

enforceable security interest;

(B) there is no present intention to take

possession of the property; or

(C) the property is exempt by law from such

dispossession or disablement.

13a

(7) Communicating with a consumer regarding

a debt by post card.

(8) Using any language or symbol, other than

the debt collector’s address, on any envelope when

communicating with a consumer by use of the mails

or by telegram, except that a debt collector may use

his business name if such name does not indicate

that he is in the debt collection business.

8.

15 U.S.C. 1692g provides:

Validation of debts

(a)

Notice of debt; contents

Within five days after the initial communication with

a consumer in connection with the collection of any

debt, a debt collector shall, unless the following information is contained in the initial communication or the

consumer has paid the debt, send the consumer a written notice containing—

(1)

the amount of the debt;

(2) the name of the creditor to whom the debt is

owed;

(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the

validity of the debt, or any portion thereof, the debt

will be assumed to be valid by the debt collector;

(4) a statement that if the consumer notifies the

debt collector in writing within the thirty-day period

that the debt, or any portion thereof, is disputed, the

debt collector will obtain verification of the debt or a

copy of a judgment against the consumer and a copy

14a

of such verification or judgment will be mailed to the

consumer by the debt collector; and

(5) a statement that, upon the consumer’s written request within the thirty-day period, the debt

collector will provide the consumer with the name

and address of the original creditor, if different from

the current creditor.

(b)

Disputed debts

If the consumer notifies the debt collector in writing

within the thirty-day period described in subsection (a)

of this section that the debt, or any portion thereof, is

disputed, or that the consumer requests the name and

address of the original creditor, the debt collector shall

cease collection of the debt, or any disputed portion

thereof, until the debt collector obtains verification of

the debt or a copy of a judgment, or the name and

address of the original creditor, and a copy of such

verification or judgment, or name and address of the

original creditor, is mailed to the consumer by the debt

collector. Collection activities and communications

that do not otherwise violate this subchapter may continue during the 30-day period referred to in subsection

(a) unless the consumer has notified the debt collector

in writing that the debt, or any portion of the debt, is

disputed or that the consumer requests the name and

address of the original creditor. Any collection activities and communication during the 30-day period may

not overshadow or be inconsistent with the disclosure

of the consumer’s right to dispute the debt or request

the name and address of the original creditor.

15a

(c)

Admission of liability

The failure of a consumer to dispute the validity of a

debt under this section may not be construed by any

court as an admission of liability by the consumer.

(d)

Legal pleadings

A communication in the form of a formal pleading in

a civil action shall not be treated as an initial communication for purposes of subsection (a).

(e)

Notice provisions

The sending or delivery of any form or notice which

does not relate to the collection of a debt and is

expressly required by title 26, title V of Gramm-LeachBliley Act [15 U.S.C. 6801 et seq.], or any provision of

Federal or State law relating to notice of data security

breach or privacy, or any regulation prescribed under

any such provision of law, shall not be treated as an

initial communication in connection with debt collection

for purposes of this section.

9.

15 U.S.C. 1692h provides:

Multiple debts

If any consumer owes multiple debts and makes any

single payment to any debt collector with respect to

such debts, such debt collector may not apply such

payment to any debt which is disputed by the consumer

and, where applicable, shall apply such payment in

accordance with the consumer’s directions.

16a

10. 15 U.S.C. 1692i provides:

Legal actions by debt collectors

(a)

Venue

Any debt collector who brings any legal action on a

debt against any consumer shall—

(1) in the case of an action to enforce an interest in real property securing the consumer’s obligation, bring such action only in a judicial district or

similar legal entity in which such real property is

located; or

(2) in the case of an action not described in

paragraph (1), bring such action only in the judicial

district or similar legal entity—

(A) in which such consumer signed the contract sued upon; or

(B) in which such consumer resides at the

commencement of the action.

(b)

Authorization of actions

Nothing in this subchapter shall be construed to

authorize the bringing of legal actions by debt collectors.

11.

15 U.S.C. 1692j provides:

Furnishing certain deceptive forms

(a) It is unlawful to design, compile, and furnish

any form knowing that such form would be used to

create the false belief in a consumer that a person

other than the creditor of such consumer is participating in the collection of or in an attempt to collect a debt

17a

such consumer allegedly owes such creditor, when in

fact such person is not so participating.

(b) Any person who violates this section shall be

liable to the same extent and in the same manner as a

debt collector is liable under section 1692k of this title for

failure to comply with a provision of this subchapter.

12.

15 U.S.C. 1692k provides:

Civil liability

(a)

Amount of damages

Except as otherwise provided by this section, any

debt collector who fails to comply with any provision of

this subchapter with respect to any person is liable to

such person in an amount equal to the sum of—

(1) any actual damage sustained by such person

as a result of such failure;

(2)(A) in the case of any action by an individual,

such additional damages as the court may allow, but

not exceeding $1,000; or

(B) in the case of a class action, (i) such amount

for each named plaintiff as could be recovered under

subparagraph (A), and (ii) such amount as the court

may allow for all other class members, without regard

to a minimum individual recovery, not to exceed the

lesser of $500,000 or 1 per centum of the net worth

of the debt collector; and

(3) in the case of any successful action to enforce

the foregoing liability, the costs of the action, together with a reasonable attorney’s fee as determined

by the court. On a finding by the court that an

18a

action under this section was brought in bad faith

and for the purpose of harassment, the court may

award to the defendant attorney’s fees reasonable in

relation to the work expended and costs.

(b)

Factors considered by court

In determining the amount of liability in any action

under subsection (a) of this section, the court shall consider, among other relevant factors—

(1) in any individual action under subsection

(a)(2)(A) of this section, the frequency and persistence of noncompliance by the debt collector, the

nature of such noncompliance, and the extent to which

such noncompliance was intentional; or

(2) in any class action under subsection (a)(2)(B)

of this section, the frequency and persistence of

noncompliance by the debt collector, the nature of

such noncompliance, the resources of the debt collector, the number of persons adversely affected,

and the extent to which the debt collector’s noncompliance was intentional.

(c)

Intent

A debt collector may not be held liable in any action

brought under this subchapter if the debt collector

shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide

error notwithstanding the maintenance of procedures

reasonably adapted to avoid any such error.

(d)

Jurisdiction

An action to enforce any liability created by this

subchapter may be brought in any appropriate United

States district court without regard to the amount in

19a

controversy, or in any other court of competent jurisdiction, within one year from the date on which the

violation occurs.

(e)

Advisory opinions of Bureau

No provision of this section imposing any liability

shall apply to any act done or omitted in good faith in

conformity with any advisory opinion of the Bureau,

notwithstanding that after such act or omission has

occurred, such opinion is amended, rescinded, or determined by judicial or other authority to be invalid for

any reason.

13. 15 U.S.C. 1692l provides:

Administrative enforcement

(a)

Federal Trade Commission

The Federal Trade Commission shall be authorized

to enforce compliance with this subchapter, except to the

extent that enforcement of the requirements imposed

under this subchapter is specifically committed to another Government agency under any of paragraphs (1)

through (5) of subsection (b), subject to subtitle B of

the Consumer Financial Protection Act of 2010 [12

U.S.C. 5511 et seq.]. For purpose of the exercise by

the Federal Trade Commission of its functions and

powers under the Federal Trade Commission Act (15

U.S.C. 41 et seq.), a violation of this subchapter shall be

deemed an unfair or deceptive act or practice in violation of that Act. All of the functions and powers of the

Federal Trade Commission under the Federal Trade

Commission Act are available to the Federal Trade

Commission to enforce compliance by any person with

20a

this subchapter, irrespective of whether that person is

engaged in commerce or meets any other jurisdictional

tests under the Federal Trade Commission Act, including the power to enforce the provisions of this subchapter, in the same manner as if the violation had

been a violation of a Federal Trade Commission trade

regulation rule.

(b)

Applicable provisions of law

Subject to subtitle B of the Consumer Financial

Protection Act of 2010, compliance with any requirements imposed under this subchapter shall be enforced

under—

(1) section 8 of the Federal Deposit Insurance

Act [12 U.S.C. 1818], by the appropriate Federal

banking agency, as defined in section 3(q) of the

Federal Deposit Insurance Act (12 U.S.C. 1813(q)),

with respect to—

(A) national banks, Federal savings associations, and Federal branches and Federal agencies of foreign banks;

(B) member banks of the Federal Reserve

System (other than national banks), branches and

agencies of foreign banks (other than Federal

branches, Federal agencies, and insured State

branches of foreign banks), commercial lending

companies owned or controlled by foreign banks,

and organizations operating under section 25 or

25A of the Federal Reserve Act [12 U.S.C. 601

et seq., 611 et seq.]; and

(C) banks and State savings associations

insured by the Federal Deposit Insurance Corporation (other than members of the Federal

21a

Reserve System), and insured State branches of

foreign banks;

(2) the Federal Credit Union Act [12 U.S.C.

1751 et seq.], by the Administrator of the National

Credit Union Administration with respect to any

Federal credit union;

(3) subtitle IV of title 49, by the Secretary of

Transportation, with respect to all carriers subject

to the jurisdiction of the Surface Transportation

Board;

(4) part A of subtitle VII of title 49, by the Secretary of Transportation with respect to any air carrier or any foreign air carrier subject to that part;

(5) the Packers and Stockyards Act, 1921

[7 U.S.C. 181 et seq.] (except as provided in section

406 of that Act [7 U.S.C. 226, 227]), by the Secretary

of Agriculture with respect to any activities subject

to that Act; and

(6) subtitle E of the Consumer Financial Protection Act of 2010 [12 U.S.C. 5561 et seq.], by the

Bureau, with respect to any person subject to this

subchapter.

The terms used in paragraph (1) that are not defined in

this subchapter or otherwise defined in section 3(s) of

the Federal Deposit Insurance Act (12 U.S.C. 1813(s))

shall have the meaning given to them in section 1(b) of

the International Banking Act of 1978 (12 U.S.C. 3101).

(c)

Agency powers

For the purpose of the exercise by any agency

referred to in subsection (b) of this section of its powers under any Act referred to in that subsection, a

22a

violation of any requirement imposed under this subchapter shall be deemed to be a violation of a requirement imposed under that Act. In addition to its powers under any provision of law specifically referred to

in subsection (b) of this section, each of the agencies

referred to in that subsection may exercise, for the

purpose of enforcing compliance with any requirement

imposed under this subchapter any other authority

conferred on it by law, except as provided in subsection

(d) of this section.

(d)

Rules and regulations

Except as provided in section 1029(a) of the Consumer Financial Protection Act of 2010 [12 U.S.C.

5519(a)], the Bureau may prescribe rules with respect

to the collection of debts by debt collectors, as defined

in this subchapter.

14.

15 U.S.C. 1692m provides:

Reports to Congress by the Bureau; views of other Federal

agencies

(a) Not later than one year after the effective date

of this subchapter and at one-year intervals thereafter,

the Bureau shall make reports to the Congress concerning the administration of its functions under this

subchapter, including such recommendations as the

Bureau deems necessary or appropriate. In addition,

each report of the Bureau shall include its assessment

of the extent to which compliance with this subchapter

is being achieved and a summary of the enforcement

actions taken by the Bureau under section 1692l of this

title.

23a

(b) In the exercise of its functions under this subchapter, the Bureau may obtain upon request the views

of any other Federal agency which exercises enforcement functions under section 1692l of this title.

15. 15 U.S.C. 1692n provides:

Relation to State laws

This subchapter does not annul, alter, or affect, or

exempt any person subject to the provisions of this

subchapter from complying with the laws of any State

with respect to debt collection practices, except to the

extent that those laws are inconsistent with any provision of this subchapter, and then only to the extent of

the inconsistency. For purposes of this section, a

State law is not inconsistent with this subchapter if the

protection such law affords any consumer is greater

than the protection provided by this subchapter.

16. 15 U.S.C. 1692o provides:

Exemption for State regulation

The Bureau shall by regulation exempt from the

requirements of this subchapter any class of debt collection practices within any State if the Bureau determines that under the law of that State that class of debt

collection practices is subject to requirements substantially similar to those imposed by this subchapter, and

that there is adequate provision for enforcement.

24a

17. 15 U.S.C. 1692p provides:

Exception for certain bad check enforcement programs

operated by private entities

(a)

In general

(1)

Treatment of certain private entities

Subject to paragraph (2), a private entity shall be

excluded from the definition of a debt collector, pursuant to the exception provided in section 1692a(6) of this

title, with respect to the operation by the entity of a

program described in paragraph (2)(A) under a contract described in paragraph (2)(B).

(2)

Conditions of applicability

Paragraph (1) shall apply if—

(A) a State or district attorney establishes,

within the jurisdiction of such State or district attorney and with respect to alleged bad check violations that do not involve a check described in subsection (b), a pretrial diversion program for alleged

bad check offenders who agree to participate voluntarily in such program to avoid criminal prosecution;

(B) a private entity, that is subject to an administrative support services contract with a State or

district attorney and operates under the direction,

supervision, and control of such State or district

attorney, operates the pretrial diversion program

described in subparagraph (A); and

(C) in the course of performing duties delegated

to it by a State or district attorney under the contract, the private entity referred to in subparagraph

(B)—

25a

(i)

complies with the penal laws of the State;

(ii) conforms with the terms of the contract

and directives of the State or district attorney;

(iii) does not exercise independent prosecutorial discretion;

(iv) contacts any alleged offender referred to

in subparagraph (A) for purposes of participating

in a program referred to in such paragraph—

(I) only as a result of any determination

by the State or district attorney that probable

cause of a bad check violation under State

penal law exists, and that contact with the

alleged offender for purposes of participation

in the program is appropriate; and

(II) the alleged offender has failed to pay

the bad check after demand for payment,

pursuant to State law, is made for payment of

the check amount;

(v) includes as part of an initial written communication with an alleged offender a clear and

conspicuous statement that—

(I) the alleged offender may dispute the

validity of any alleged bad check violation;

(II) where the alleged offender knows, or

has reasonable cause to believe, that the alleged

bad check violation is the result of theft or forgery of the check, identity theft, or other fraud

that is not the result of the conduct of the

alleged offender, the alleged offender may file

a crime report with the appropriate law

enforcement agency; and

26a

(III) if the alleged offender notifies the

private entity or the district attorney in writing, not later than 30 days after being contacted for the first time pursuant to clause

(iv), that there is a dispute pursuant to this

subsection, before further restitution efforts

are pursued, the district attorney or an

employee of the district attorney authorized to

make such a determination makes a determination that there is probable cause to believe

that a crime has been committed; and

(vi) charges only fees in connection with services under the contract that have been authorized

by the contract with the State or district attorney.

(b)

Certain checks excluded

A check is described in this subsection if the check

involves, or is subsequently found to involve—

(1) a postdated check presented in connection

with a payday loan, or other similar transaction,

where the payee of the check knew that the issuer

had insufficient funds at the time the check was

made, drawn, or delivered;

(2) a stop payment order where the issuer acted

in good faith and with reasonable cause in stopping

payment on the check;

(3) a check dishonored because of an adjustment to the issuer’s account by the financial institution holding such account without providing notice

to the person at the time the check was made, drawn,

or delivered;

27a

(4) a check for partial payment of a debt where

the payee had previously accepted partial payment

for such debt;

(5) a check issued by a person who was not

competent, or was not of legal age, to enter into a

legal contractual obligation at the time the check

was made, drawn, or delivered; or

(6) a check issued to pay an obligation arising

from a transaction that was illegal in the jurisdiction

of the State or district attorney at the time the

check was made, drawn, or delivered.

(c)

Definitions

For purposes of this section, the following definitions shall apply:

(1)

State or district attorney

The term “State or district attorney” means the

chief elected or appointed prosecuting attorney in a

district, county (as defined in section 2 of title 1),

municipality, or comparable jurisdiction, including

State attorneys general who act as chief elected or

appointed prosecuting attorneys in a district, county

(as so defined), municipality or comparable jurisdiction, who may be referred to by a variety of titles

such as district attorneys, prosecuting attorneys,

commonwealth’s attorneys, solicitors, county attorneys, and state’s attorneys, and who are responsible

for the prosecution of State crimes and violations of

jurisdiction-specific local ordinances.

28a

(2)

Check

The term “check” has the same meaning as in

section 5002(6) of title 12.

(3)

Bad check violation

The term “bad check violation” means a violation

of the applicable State criminal law relating to the

writing of dishonored checks.