This week, the House Financial Services Committee (the “Committee”) approved by a vote of 35-25 a bill introduced last month by Rep. Alex Mooney (R-WV) that would exclude from the definition of “debt collector” under the Fair Debt Collection Practices Act (“FDCPA”) law firms or licensed attorneys engaged in litigation activities to collect a debt, provided that those activities are “in connection with a legal action in a court of law to collect a debt” and that the debtor is served or service is attempted in accordance with applicable rules. The bill, H.R. 5082, the “Practice of Law Technical Clarification Act of 2018,” provides that such “litigation activities” that would exempt an attorney from the definition of “debt collector” include:

• serving legal pleadings or discovery;
• communicating in a court of law, depositions, settlement conferences, or in the enforcement of a judgment; or
• “any other activities engaged in as part of the practice of law … that relate to the legal action.”

The Committee passed the bill the same week that the CFPB and Federal Trade Commission submitted their joint report to Congress on their activities under the FDCPA. The report, covered in our recent post, highlighted the agencies’ enforcement actions under the FDCPA. Many of the recent actions have focused on attorneys or law firms engaged in debt collection activities. H.R. 5082 could thus have a measurable impact on enforcement in this arena. The agencies have also been active recently in FDCPA enforcement against non-lawyers: mortgage loan servicers, debt collection agencies, payment processors, and telephone marketing service providers.

In addition, the bill would amend the Consumer Financial Protection Act to prevent the Consumer Financial Protection Bureau (“CFPB”) from exercising its enforcement or supervisory authority over attorneys when engaged in such activities in connection with a legal action to collect a debt. The next step is for the entire House of Representatives to consider the bill.

As the Committee’s press release notes, H.R. 5082 is one of eight bills that the Committee advanced this week, another active week following last week’s passage in the Senate of a bill to roll back certain regulations under the Dodd-Frank Act.