that the plaintiffs agreement in this case is a consumer credit transaction and reaching its decision the court erred in concluding that the agreement is third party financing of a tax obligation the court also erred in concluding that the agreement in question is consumer in complaint in this case as any allegation or evidence of an actual or imminent concrete or rather this is his is very similar to dry her or someone to back and that what we have at the end of the day is a bare procedural violation a any actual or imminent harm and therefore we don't have article three standing in fact if we look at the complaint it it resembles closely or amounts largely to see came in advisory opinion that if certain actions might happen in the future if we speculate that certain things could happen none of which is contained in the complaint which is pled in would we have a viable cause of action and that's not what standing is designed to do the facts were i've had some trouble with understanding exactly what had happened c just talking to my knowledge no payment has been made at any time via a c h transaction and that is he wasn't alleged i don't believe it was not alleged and we think that's important it we have to go by this is a allegation in the complaint that there was any payment ever made by an ac transaction and suddenly there is no allegation that there was a requirement to do so really all the allegation in the complaint is that there was an authorization that was executed but there is no allegation the court will find nowhere in the complaint an allegation that mr curtis has made a payment by a ca transaction or that he was required to do so and that's that really gets to the core of the problem here from standing perspective anyway your honour's is all we have here is theoretical and speckled we don't have any other we don't have the what this court has found in other cases there's nothing to push it beyond the speculative to the actual imminent but now there statutory damages though aren't there he doesn't have to allege actual damages does he under the statute he's got a legit and imminent or actual harm your honor and in the right but but when you have statutory damages as a remedy doesn't that solve the problem respectfully i would say no because and that's why not in that scenario any you would basically remove the actual injury requirement in any case that involves statutory damages if it was enough that simply statutory damages was available then you would need no showing of actual or imminent harm and that's that's not what the case law says and that's not what this court has said i appreciate the question now you're saying case law latedly is our position would be the mere fact that actual damages exist does not satisfy the actual harm requirement that concrete actual harm requirement required to have standing you how much you must first have standing before you can proceed to damages it's a gatekeeper as the court knows it and that gate should not be open here because there is no allegation evidence there's nothing it's a complete absence of any allegation of a concrete actual  actual concrete injury in this case right in the requires him to pay by that means doesn't on the agreement that he signed but in this case judge has as judge duncan pointed out there is no allegation that he was required to pay b means and that is not determined what it was i thought he was directed to that was why he was directed to bring the boy did she ask my question really with more to whether or not there had been any such payment and  directed toward the sort of and big us nature of the facts if you dispute that he was required to bring you jack automatic withdraw to set up a case we don't dispute that the authorization took place to judge what but that respectfully is not the issue he sure is is there an allegation in the complaint of a concrete harm in signing that authorization does nothing but create the statutory violation there's no harm there's no and w orried about is what you're doing is trying to to create this this new standing problem when what you're really arguing is that he's not stating a claim he's not adequately stating a claim you know we see this in a lot of cases where people start arguing standing when it seems to be a failure to plead damages it seems to me and i don't know why this you still haven't satisfied my mind  than failure to state a claim it so respectfully can and it's both but i don't get to argue the third a steady climb before you today what to do argue is the standing and to answer your question at least our position is it is a standing issue executing or signing this authorization that is what the plaintiff would have you believe is a violation ok and there's a statutory violation does that is not i'm sorry no no no no that that that does not that and that's central to our point is that is not the mere the violation right does not give rise to the actual injury that's what the court realized and sent back to the district court dreyer it's the same situation is that the court in district court conflated the two and said talking about the statutory damages provision again it seems to me that congress and most legislatures create a statutory damages provision of virtue of the fact that oftentimes a plaintiff can't prove actual damages and so but there is there's a sense by the legislature that they want to punish the wrong door absent actual damages wired or those why can't those two things become plume entered great question just  they because damages and harm are not the same damages are what you are entitled to necessarily if you get a new court and you prevail you're entitled to damages and to your point that there's a couple reasons you have steps toward damages sometimes the amount that would be received or recovered is so low that the court has often viewed that as a disincentive and so we put statutory damages in place to incentivize or at least level the playing field but in this case it's not the same it's not whether or not you have actual damages or statutory damages because not go to the issue of whether you've satisfied the threshold question of the harm and so in this case let me be clear and i'll try to respond if i have it but i think  just brings up a good point is why why aren't i standing here trying to create a new standing criteria it's not at all what we're doing we're just trying to say in a complaint which is what we're gonna buy here there needs to be an allegation of some harm and it doesn't have to there are absolutely no facts in the complaint the complaint doesn't doesn't allege that they point the complaint parents what the statute says and it's a bare procedural violation so this complaint hails for a variety of reasons one of which is there are no facts to support any harm at all but in this situation what this court has found in the past is what distinguishes cases we're standing exists and it doesn't is there something actually something in the complaint that pushes it beyond the speculative to the concrete our position is there's no push you there are no facts here it literally is there's a statute that says you can't do x you did x therefore we have standing does not have the ring to really running down your clock without addressing your substantive argument on whether this is  consumer transaction thank you and i wanted to ask you if you could move into that area and tell me why at least in so far as the origination fee and the interest this isn't a consumer debt transaction the parties seem to be arguing that it's got to be one or the other and i'm wondering whether it's a bifurcated situation could you address that that if we agree with you under the third and fifth circuit analysis that this is not a consumer transaction as to the tax  deficiency is there still a consumer transaction with regard to the interest and initiation fee yesterday you know i'll be happy to that i think c p r which is the recent case that came from the third circuit really hits a tax obligation there is no authority to suggest a tax obligations consumer nature therefore it fails the second prong back to your question just came in as and i'll quote from the third circuit we were clear in police that the original source of the obligation not the subsequent method of collection determines whether the obligation constitutes a debt and that's the test billings is important and police are important for two issues the holding same p r s talking about the affair  it collection act right it's a different talking about different statute does that make a difference or not not not for this now sit can your honor and it can and in for example police has been questioned as to how it treated the debt collector that's not relevant for our purposes but  this case what is relevant is both the holdings in those two cases but also it tells you what the question presented is and the question is we don't look at the side information and i promise i'm getting to your question we don't look at the side information we look at underlying obligation and that determines whether it's credit and in this case a tax obligation well it's a tax obligation with respect to the municipality but what we're looking at is the agreement between propel encourages and so you have to define credit to exclude tax liens assessment but including third party financing of such obligation correct so why is this not  the only difference between getting a bank loan to pay off the taxes is it here the bank would lean the money directly toward curtis curtis but it would help me if you didn't start shaking your head  and then instead of paying and propel pays you know balance but that's really the only difference between a bank opinion a loan from a bank to pay the tax obligation and a third party instead of the bank your honor we respectfully disagree let me explain why it is a key feature of this obligation and what distinguishes it from a bank loan and a bank  situation mr curtis took out a bank loan he would then have to obligations two separate obligations one to the bank and one to the municipality in this case there's only one and there's always only one obligation so how do we know that because if we look at the statute and we look at the language in the true why it would make any difference if it's true because propel under the statutory structure can revert the tax obligation back to means pouty but that doesn't mean there's not a debt to propel there isn't an obligation w as both cases of help assigning the payment obligation itself to a third party does not create a new independent obligation that's what both cases hold because not me that map of this is that's not helpful neither of them are finding it it doesn't go to the question that i'm posing about why isn't there a third party financing of a tax obligation propellors a third party it's financing a tax obligation which curtis is obligated itself to pay back to pro pal although a proposal doesn't is unable to if it doesn't work out it's the obligation is still owed to the list so that's the part i go with was it doesn't really matter it's only an example that's right it's not that doesn't set any parameters it's just an example of when it might occur it's not third party financing judge duncan because there is no new independent obligation the obligation personal family or household purposes that's correct because you don't think paying real property taxes is for personal family or household purposes i do not i think paying a tax is paying isn't the kurds if they don't pay their property if they don't pay their real property tax church they don't pay the real property tax then there's a risk of foreclosure well what the case law tells us and raced of all in and the history of the case law is that a tax obligation is not consumer in nature and it's in this case it's not i electronic funds transfer act claims and issue two is whether mr curtis has standing to raise his electronic funds transfer act claims regarding issue one credit is defined in the truth in lend and its right to defer that regulation z further provides the definition of credit and the commentary explains that right building regulations see the  payment of the taxes fifty eight point one three thousand eight hundred b one says the taxes are paid so the taxes are paid when the taxes are paid in virginia virginia law requires the treasurer to mark them as paid if not really get the person for whom it paid taxes yes with regard to anything other than the interest and principal yes if there is a default they can seek collection against that person if there is a default they can walk into general district court they called in the remedy was against the entity that there is a potential remedy if they choose and if the treasurer decides that the treasurer is satisfied with their collection efforts they don't have to go that route there's nothing in the statute nor anything in the agreement which prohibits propel from suing mr curtis if he defaults in general district court i don't i didn't read the question and it only be a bank no it doesn't have to only be a bank anyone can be a creditor your honor if i loan money to mr pitman here i am a creditor now if i do it with the sufficient times under the statute then  i'm regulated if i charge interest then i'm regulated you don't have to be a bank to be regulated by the truth in lending act i could extend credit to anyone to pay their taxes and i could put myself under the truth in lending act by doing so  truth is i'm sorry to interrupt but what was so what you're saying is that even though ninety nine point nine percent of the third parties who get involved in a situation such as propel would seek recourse against the locality the fact that there is a an avenue against the debt or in general district court necessarily makes this in other words there is a remedy although not a realistic remedy if somebody can't pay the installment they're certainly not going to be able to pay the bulk of the obligation that's what got them there in the first place but you're saying that theoretical or not even theoretically you're saying the statu allows you to proceed against yes they have an option if they want to ok and you're saying that's what makes it consumer in nature even knowing ninety nine point nine percent of cases nobody's going to go after a person who can't pay an installment plan for the whole amount when the localities standing near with an open wallet i'm actually saying this consumer in nature whether or not that happens i would just point out that that's not the situation in this case it's consumer in nature because at the initiation of the transaction there is credit that is extended to pay the tax lien and the two cases that they have in front of you are fundamentally different than that those two cases were actually assignments of the tax filing assignments of the localities rights to the entity putting up the money to anybody but propellants prohibited by statute from going against curtis if pro pelle gets payment from the locality isn't that correct no it's not i know that they put that in their briefs and with all respect to their writing it is not going rests not in the statute i'm saying that is not in the statute what is in fifty eight point one three thousand eighteen is the option for pro pal to go to the city of petersburg and demonstrate to the satisfaction of the treasurer it's not a it's not an option that they have sole control over it's their option if they want to to go to the city of petersburg and say person a defaulted and the city of petersburg treasurer gets to say whether the treasurer is satisfied or not that propel has demonstrated good faith efforts to collect the obligation so let me ask you about your about to make a point regarding the assignment of the debt and i think you were going to say that in this case the assignment the tax lien was itself never assigned to the third party in this case to repel unlike the cases in the third and fifth circuit where there was an assignment and how does that help your case because that it seems to me that cuts them actually cut against you because it ties the lien and your client back to the original tax debt and not to the credit obligation my case starts with regulations e in the commentary that says third party financing to pay tax learning is credit that's regulated by the truth in lending act their opposition is to cases that did not involve this type of transaction where there is credit to the person  payment of a tax lying those cases the facts in which the second and the fifth said that the commentary doesn't apply the reason it didn't apply is it was the assignment of a preexisting tax  in both those cases the entity putting up the money took assignment of the municipality as preexisting right to foreclose and the assignment of the tax aling then was not considered to be the credit extended to a consumer to pay a debt so those cases said regulation c does not apply this is not an assignment of a tax line this is a payment of the taxes was it makes a difference that there may may or may not be an avenue yes here and i didn't i didn't mean to imply that it made a difference the argument has been made that there is no avenue ashok thirty eighteen says any right of the third party to payment arising under a third party tax payment agreement shall terminate upon the receipt by the third party of a reimbursement payment from the treasurer so that if they petersburg decides that the treasurer petersburg a satisfied with their collection efforts and there there is no standard for that in the statute but they don't just get to say i get paid from the city right to the city but i think what you're doing is you're waffling a little bit if you don't mind my saying so on the the effect of c four c four definitely cuts off the right of the third party tax provider payment provider to recourse against  the individual for whom they made the payment and can you tell me why that doesn't affect the analysis of whether this is a consumer credit transaction what c four does is prohibit some from a double recover i'm going to see for prohibits them from a double recovery right once they're paid by someone who is essentially a guarantor of the principle right that amount they can't get paid in this case the credit happens at the time of the transaction the truth in lending act looks to see at the time of the transaction is this credit to which truth in lending act applies and the reason is the truth requires the written disclosures be delivered to the consumer prior to consecrate but if this were predicate why would the statute cut off the right to go against mr curtis after the locality had reimbursed the principal it seems to me that the third party if it's a credit transaction would still have the right to proceed against the third party in general district court as you say for theory for two reasons you proceed in general district court to get a judgment your doc at the judgment in the circuit court and you can sell the property petersburg is actually known to default on its obligations petersburg actually has had its fire truck repossessed the idea that they might ask petersburg for payment and petersburg say we actually can't pay you is a very real probability and in fact not responsive to to the question well what i want him saying is you only get to four you only get to terminating their right to collect if they've city is the principle for any taxes that have not been paid the first six months of payments go entirely to the processing fee so that after someone has made five monthly payments right so they don't have a right to get back the origination years and then they do not have a right to get the origination fee back from the oak municipality if it's a credit transaction as you say then why would the statute cut off the right of the third party  tax payment hey your to go against the payee for the origination agreement if they are out if it's a credit transaction shouldn't they be able it is simply read an adjustment of what is paid it is we all the time have credit transactions where what occurs on default and what can be collected on default is a function of state law the truth in lending act does not regulate the substance of a credit transaction the substance of a credit transaction is regulated by state law which is why in virginia there are title  charge triple digit interest rates but they don't do that in north carolina those are both credit under the truth in lending act and the truth in lending act provides a format by which one hundred percent two hundred percent loans are disclosed along with loans that are for thirty percent we also have a law in virginia that title loans cannot be collected at all in state court but a title loan is only subject to the repossession of the vehicle and when the individual makes the title loan they are cut off from actually getting any payment of any amount due by suing in general district court the cutting off the right to collect the debt in court does not at all touch on the federal issue of how to disclose a credit transaction or when i apologize that i didn't understand your question doesn't it wouldn't  necessarily affect whether it is a creditor trying to act in the first place because that would make it pretty circular i don't think it does credit credit is defined as the right to defer payment the regulations east specifically says financing to pay a tax debt is credit covered by this statute the fact that a tax debt itself is not a consumer credit transaction the fact that a ta is not something to which the f t c p a initially applies because it's not in the nature of the consumer debt that italy has kind of agree with you it would seem to me that the definition of what constitutes credit would not under the truth me yes and the truth in lending to access financing to pay a tax debt is credit covered by the statute we are here today on this issue because in two other states those states had authorizing language that allowed for the assignment of the tax lien of the locality where the assign or stepped into the shoes of the locality and enforced the localities tax lien rights and in those cases on those particular facts there are two decisions that say that is not what regulations e is talking about because this was not credit that was extended to pay at that but still i don't think the least for me have you answered the problem the obligation is not expunged the obligation to pay the tax is not expunged at the time of the transaction the obligation to pay is now in the agreement between propel and mr curtis so there is an obligation to pay but that's the same way as if mr curtis had gone to a bank and said i want a line of credit to pay my taxes in the bank had a closing he won't walk out from that closing with the check in his hand at the closing the bank would say well we're paying your taxes they have to go directly to the people that are paying the taxes because when the taxes are paid the tax lien is extinguished now in this case virginia allows for the municipality if it decides to reimburse profile it propel asks it allows the municipality to put the debt back on the tax rolls that is a consequence of default right but the leanness never sting bushed until that payment is complete under virginia code after all the payments under the t p a are fully complete but lets people only when you when the obligation is extinguished is actually under no it's not there are under virginia code fifty eight point one three nine three zero when taxes are paid they are to be given to the treasurer and the treasurer is to record the taxes is paid what that does is it moves it off the tax rolls there is no longer a delinquent eight hundred thirty eighteen that it moves perhaps i don't it has the ability to spring back but it doesn't exist on the tax rolls under thirty eighteen b the taxes are paid when the taxes are paid under a virginia code the treasurer has to mark them as paid then if propel says there's default if the treasurer is satisfied the collection efforts have been made and if the city of petersburg is able to pay its debts which starkly it hasn't been able to then it can be reinstated and in fact that the would be the word reinstate is in c two i'm sorry in see to it says any treasurer who reimburses a third party pursuant to this subsection shall taxes on the tax rolls one of the reasons why cities think this might be a good idea for them is cities also have to report their delinquent taxes every year under fifty eight point one thirty nine twenty one and this allows them to not report those taxes as delinquent if the consumer doesn't pay if propel makes the request if petersburg does pay it can come back on the tax rolls and at that point with it on the tax lending act looks to whether the creditor has extended credit to a consumer whether that agreement is there they have also made clear that tax debts are not credit that the municipalities by assessing taxes on their constituents do not become creditors these are completely two different animals and then the two cases that and i know i'm out of time and we didn't even talk about  creation of a loan to pay taxes which is what we have here think just don't can let me let me try to do a better job what i didn't do a great job of we had we've talked about and i'm not sure i was as responsive as i should have been on credit but i think maybe going back to the basics of credit helps better explain our argument in this case credit is required you need two things to be a consumer credit transaction has to be credit and has to be consumer in nature for credit in order and in order for there to be credit there must be a debt and and that is governed by virginia law and this case in virginia he tax obligation is not a debt and so i don't think i made that point as well as i could before but that's why it's significant that's what i also what the regulation says that's not inconsistent with regulation and so what that doesn't add anything to it what's different here what's different here is the third party financing of that right and one is different in our opinion from from the argument you just harvest there it isn't a third party financing situation such as a bank like regulations e what this is an assignment but what i'm still trying to understand what i couldn't get you to respond to and you seem to be going back to it is what difference does it make the bank circumstance is up put out there as an example it is not limited to so why does it matter for purposes of the definition of credit the truth in lending act why does it matter that it's not a bank and what authority and i i do not a tax payment is not a debt and so all we have in regulations is in the exception and an example and i have no reason to believe that that is the only example which to your point but there's distinctions between our situation and that example there is not alone here i look at the third circuit the fist circuit they didn't care about the tax lien and the tax on assignment those cases are all very clear what they turned their decisions on was the source of the original obligation right your original obligation determined that it was not a debt and they both concluded that simply assigning the right to payment however you choose to do it under the various state statutes that didn't transform the non debt which everybody concedes is a non debt into a debt in this case i think it's just just as you point out this case we have a stronger argument because there is no new obligation at all so we're one step further away from the exception because in this case there's one obligation and you can simply revert it back to the city that significant judge duncan i'm i feel that you you're not fond of that response but that's that's our answer i mean i it is it's the obligation you look at we know that from the test i just keep coming back to the i'm having trouble getting because there's no loan there is no loan there is no new independent loan being made here mr curtis does not get access to one penny no one pays him any money he doesn't have any money he has the ability to move who he pays his tax obligation to from the city to propel and he does that so it eases the burden on him and it's a payment plan but in that situation why it's different than a bank loan is because in this case propel is servicing the obligation it's not a new independent obligation that's determined in an earlier question maybe judge can and you were asked about the authorization on the stand component of it and i would point to exhibit b in the complaint which speaks of different ways to pay other than through a c h and so it's a further example of why there's no actual or concrete harm in this case and the final point i will make my time is running is even if we move past credit there is no authority we have to be consumer in nature as well as credit and a tax obligation is not consumer nature the obligation here doesn't change it's not transformed based on what the third circuit the fist circuit said there's nothing that transforms it and we know it's not transform because it goes right back to the city appears and so in that situation it's one single obligation and that's our position