Debt Collection & Buying
Well versed in collection lawLegal 500
Practice Overview
Buckley represents major creditors on issues involving in-house collection operations, debt purchases, and third-party debt collectors. Our team includes attorneys with private sector debt collection backgrounds and government experience, including a former Federal Trade Commission (FTC) attorney with significant governmental experience addressing debt collection issues, and long-time outside counsel to the nation’s largest creditors and collection companies. We offer a unique perspective on risk mitigation options and a practical understanding of what regulators and enforcement agencies expect from the industry, as well as current issues in high-stakes collection litigation.
Our team works on debt collection matters on a regular basis, handling a variety of regulatory, transactional, litigation, and enforcement matters related to first- and third-party collections. Our experience includes: evaluating and applying state and federal law; drafting corporate policies and procedures tailored to each client’s specific circumstances; conducting risk assessments; preparing Consumer Financial Protection Bureau gap analyses; assisting with CFPB supervisory examinations; and designing, reviewing, and implementing vendor management guidelines. We also regularly advise clients on the risks and mitigants related to the use of social media and other technologies in the context of debt collection.
We also represent private equity and strategic investors who buy and sell collection companies and debt portfolios. We have advised on and performed due diligence for parties involved in some of the largest transactions in the receivables management space in recent years, as well as resulting licensing and change-in-control filings with state licensing authorities.
Our firm has a track record of success defending clients in debt collection litigation and enforcement matters before the CFPB, FTC, state attorneys general, and other federal and state agencies. We are well-versed in the Fair Debt Collection Practices Act (FDCPA), Telephone Consumer Protection Act (TCPA), and state debt collection laws, including application of unfair or deceptive acts or practices (UDAP) laws. We are extremely knowledgeable in all aspects of the Fair Credit Reporting Act (FCRA), Equal Credit Opportunity Act (ECOA), and data protection / breach regulation, particularly as such laws are applied to debt collection.
In the post-Dodd-Frank era, creditors selling portfolios of nonperforming debt must understand the regulatory challenges governing the sale of consumer debt in order to mitigate the potential risk and liabilities involved, including risks that may result from the acts of those to whom the debt has been sold. Buckley provides counsel in developing, implementing, and maintaining robust debt sales measures that comply with OCC Bulletin 2014-37, CFPB guidance, and other applicable laws that impact debt sales and purchases.
Our work includes:
- Advising and assisting with preparing debt collection and servicing branch license applications
- Representing a debt collection company in a CFPB investigation regarding compliance with the FCRA and FDCPA
- Advising a national bank on matters related debt collection, including application of the FDCPA, bankruptcy proofs of claim, and state debt collection licensing laws
- Providing compliance and state licensing counsel for loan servicer and debt collector
- Advising a debt collection agency on debt collection and money transmitter licensing requirements
Well versed in collection lawLegal 500
Articles
"School of hard knocks: Federal student loan servicing and the looming federal student loan crisis" by Jeffrey P. Naimon, Sasha Leonhardt, and Sarah B. Meehan (American University Administrative Law Review)
Nearly forty-three million Americans collectively owe $1.5 trillion in outstanding student loan debt. Of that, approximately ten percent of student loan debt is over ninety days delinquent or in default, while the actual delinquency rate is estimated to likely be double this amount due to the fact...
Articles"TCPA relief for Covid-19 communications could extend to financial institutions" by Ali M. Abugheida and Geoffrey L. Warner (Bloomberg Law)
Financial institutions face unprecedented and rapidly evolving challenges in the wake of the Covid-19 pandemic, including the need to communicate quickly and efficiently with customers in the face of government-issued stay-at-home orders. But the Telephone Consumer Protection Act, with its steep...
ArticlesSpecial Alert: CARES Act places significant burdens on servicers of consumer debt but provides some relief to depositories
President Trump late last week signed the Coronavirus Aid, Relief, and Economic Security Act that attempts to soften the negative economic effects of the Covid-19 pandemic on consumers, including by suspending payments for certain student loan borrowers and enabling mortgage loan borrowers to...
Special AlertsSpecial Alert: CFPB releases Supplemental Notice of Proposed Rulemaking on Time-Barred Debt Disclosures
On February 21, the CFPB issued a Supplemental Notice of Proposed Rulemaking (NPRM) to amend Regulation F, which implements the Fair Debt Collection Practices Act (FDCPA), to require debt collectors to make certain disclosures when collecting time-barred debts (the “Supplemental Proposed Rule”)...
Special Alerts"A new era of FCRA scrutiny for consumer data furnishers" by Jessica L. Pollet (Law360)
Furnishers provide information to consumer reporting agencies on over 1.3 billion consumer credit accounts or other tradelines each month, with the three largest national consumer reporting agencies holding the personal information of over 200 million consumers. Given the extent of the consumer...
Articles"Email notice lessons from 7th Circ. debt collection ruling" (Lavallee v. Med-1 Solutions LLC) by Marshall T. Bell (Law360)
Consumers increasingly expect to have access to information and the ability to conduct business at the time and place of their choosing, whether shopping for goods and services or managing their finances. Often, that means they expect service providers to communicate with them by email, text or...
Articles"Debt collection, convenience fees, and the FDCPA" by Jon David D. Langlois and Elizabeth R. Bailey (The Review of Banking & Financial Services)
In the era of online banking and the Internet of Things, the ability to pay your mortgage in a manner other than sending in a paper check evidences both convenience and complication. Convenience to the borrower, in that there are many avenues to quickly make a payment, even a late payment, to avoid...
Articles"Neither forgiven nor forgotten: Taxation and UDAAP concerns with collecting charged off debt" by Sasha Leonhardt and Jessica M. Shannon (Bloomberg BNA)
When debtors are unable to pay their debts, creditors are left with a choice: (i) allow the consumer to pay a lesser amount, if possible, to settle the obligation and recover some funds; or (ii) charge off the debt and cease all collection efforts. Regardless of the path chosen, each has potential...
Articles"The role of State AGs in solving student loan crisis" by Sasha Leonhardt and Dana Walsh Kumar (Law360)
State attorneys general are the chief legal officers of their state; state attorneys general are the chief law enforcement officers of their state; and state attorneys general must protect their citizens and vigorously enforce their state’s consumer protection statutes. As broad as these powers and...
Articles"Between a Rock and Hard Place: Debt Collection, Consumer Remediation and Tax Consequences" by Sasha Leonhardt and Jessica M. Shannon (Bloomberg BNA)
In recent years, debt collection has become a focal point for regulatory oversight and government enforcement actions. The Consumer Financial Protection Bureau (CFPB) considers debt collection to be a priority and scrutinizes the conduct of debt collectors for violations of the Fair Debt Collection...
ArticlesSpecial Alert: Supreme Court Holds that a Person May Collect Defaulted Debts Purchased for Its Own Account Without Triggering the FDCPA
On June 12, the United States Supreme Court issued a ruling in Henson v. Santander Consumer USA Inc., affirming the Fourth Circuit’s holding that the Fair Debt Collection Practices Act’s (“FDCPA” or the “Act”) definition of the term “debt collector” does not necessarily apply to a company...
ArticlesSpecial Alert: Madden Class Action Moves Forward
On February 27, the U.S. District Court for the Southern District of New York issued a ruling in Madden v. Midland Funding, LLC , [1] holding that New York’s fundamental public policy against usury overrides a Delaware choice-of-law clause in the plaintiff’s credit card agreement. The court allowed...
ArticlesSpecial Alert: CFPB Releases Outline of Proposed Rule for Third Party Debt Collectors
On July 28, the CFPB announced that it is considering proposing a rule to “overhaul the debt collection market by capping collector contact attempts and by helping to ensure that companies collect the correct debt.” The CFPB released several related documents, including a report on third-party debt...
Articles"Key Points in the CFPB’s Outline of Proposed Rule for Third Party Debt Collectors" By Marshall T. Bell and Walter E. Zalenski (Consumer Finance Law Quarterly Report)
On July 28, 2016 the Bureau of Consumer Financial Protection (CFPB) announced that it is considering proposing a rule to “overhaul the debt collection market by capping collector contact attempts and by helping to ensure that companies collect the correct debt.” The CFPB released several related...
ArticlesDebt Collection and Beyond in 2015
In 2015, the CFPB further expanded its reach into debt collection through a number of enforcement actions. The CFPB also continues to conduct research on a potential rulemaking regarding debt collection activities, which may address information accuracy concerns involving debt sales and other...
ArticlesNew Day For RESPA: The UDAAPification Of Section 8
The Real Estate Settlement Procedures Act has gone the "UDAAPified" way of debt collection — this time, through enforcement rather than guidance. In July 2013, Consumer Financial Protection Bureau Bulletin 2013-07 announced that the principles underlying the Fair Debt Collection Practices Act...
ArticlesDebt Collection in the Post Dodd-Frank Enforcement Era
Sasha Leonhardt and Jessica Pollet authored "Debt Collection in the Post Dodd-Frank Enforcement Era," which appeared in the January/February issue of The Journal of Taxation and Regulation of Financial Institutions. Since the passage of the Dodd-Frank Act, government agencies have increasingly...
ArticlesSpecial Alert: CFPB Takes Enforcement Action Against "Buy-Here, Pay-Here" Auto Dealer for Alleged Unfair Collection and Credit Reporting Tactics
On November 19, the CFPB announced an enforcement action against a ‘buy-here, pay-here’ auto dealer alleging unfair debt collection practices and the furnishing of inaccurate information about customers to credit reporting agencies. ‘Buy-here, pay-here’ auto dealers typically do not assign their...
Articles
News & Blogs
Washington governor extends suspension of consumer garnishment
On November 20, the Washington governor issued a proclamation extending a previous moratorium on garnishment for consumer debts until the earlier of December 7, 2020 or the termination of Washington’s Covid-19 State of Emergency. See here , here and here for previous coverage. The suspension...
InfoBytesMaryland AG obtains $2.6 million in student debt relief
On November 16, the Maryland attorney general announced that it obtained over $2.6 million in debt relief from a third-party debt buyer for approximately 1,200 former students of a defunct Maryland-based for-profit college. In its press release, the AG alleged that the for-profit college offered “...
InfoBytesCFPB settles with debt collector over credit reporting violations
On November 12, the CFPB announced a settlement with an Illinois-based non-bank debt collector, resolving allegations that the company violated the Fair Credit Reporting Act (FCRA), Regulation V, and the Consumer Financial Protection Act when providing information to consumer reporting agencies (...
InfoBytesIllinois governor suspends consumer garnishment and wage deductions
On November 13, the Illinois governor re-issued over 30 previous Covid-related executive orders that had previously been suspended. Of note, Executive Order 2020-55 , which suspended portions of the Illinois Code of Civil procedure permitting service of a garnishment summons, wage deduction summons...
InfoBytes2nd Circuit: Payment demand in debt collection letter overshadows validation notice
On November 5, the U.S. Court of Appeals for the Second Circuit reversed a district court’s dismissal of an FDCPA action, concluding that warnings in a defendant’s debt collection letter “could have created the misimpression that immediate payment is the consumer’s only means of avoiding a parade...
InfoBytesNorth Carolina Appeals Court: Original creditors’ intent required for assignment of arbitration rights
On November 3, the Court of Appeals of North Carolina issued a pair of orders (see here and here ) affirming lower courts’ decisions denying a debt collector’s (defendant) motion to compel arbitration. According to the orders, the defendant purchased charged-off accounts belonging to the plaintiffs...
InfoBytesCFPB finalizes certain debt collection rules
On October 30, the CFPB issued (along with blog post from Director Kraninger) its final rule amending Regulation F, which implements the Fair Debt Collection Practices Act (FDCPA), addressing debt collection communications and prohibitions on harassment or abuse, false or misleading representations...
InfoBytesCFPB releases education ombudsman’s annual report
On October 28, the CFPB Private Education Loan Ombudsman published its annual report on consumer complaints submitted between September 1, 2019 and August 31, 2020. The report is based on approximately 7,000 complaints received by the Bureau relating to federal and private student loans. Of these...
InfoBytesFTC temporarily halts unlawful debt collection operation
On October 15, the FTC announced that the U.S. District Court for the Northern District of Georgia granted a temporary restraining order against a debt collection operation for allegedly engaging in fraudulent debt collection practices. According to the FTC’s complaint , the operation violated the...
InfoBytesIllinois reissues and extends several Covid-19 executive orders
On October 16, the Illinois governor issued Executive Order 2020-59 , which extends several earlier executive orders through November 14, 2020 (previously covered here , here , and here ). Among other things, the order extends: (i) Executive Order 2020-07 regarding in-person meeting requirements, (...
InfoBytes
Press Releases & Announcements
Buckley Sandler launches APPROVED licensing service
WASHINGTON, D.C. (March 7, 2018) – Buckley Sandler LLP today formally announced the launch of APPROVED , a new approach to licensing for financial services companies. Buckley Sandler is building upon years of financial services experience and licensing know-how to offer APPROVED, a technology-...
Press Releases
Our Debt Collection & Buying Team
Partners
FYI
"School of hard knocks: Federal student loan servicing and the looming federal student loan crisis" by Jeffrey P. Naimon, Sasha Leonhardt, and Sarah B. Meehan (American University Administrative Law Review)
"TCPA relief for Covid-19 communications could extend to financial institutions" by Ali M. Abugheida and Geoffrey L. Warner (Bloomberg Law)
Special Alert: CARES Act places significant burdens on servicers of consumer debt but provides some relief to depositories
Recent Blog Posts
-
November 20, 2020
Washington governor extends suspension of consumer garnishment
-
November 19, 2020
Maryland AG obtains $2.6 million in student debt relief
-
November 17, 2020
CFPB settles with debt collector over credit reporting violations
-
November 13, 2020
Illinois governor suspends consumer garnishment and wage deductions
-
November 11, 2020
2nd Circuit: Payment demand in debt collection letter overshadows validation notice