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[House Report 115-892]
[From the U.S. Government Publishing Office]

115th Congress     }                                {         Report
                        HOUSE OF REPRESENTATIVES
 2d Session        }                                {         115-892

======================================================================

 
          PRACTICE OF LAW TECHNICAL CLARIFICATION ACT OF 2018

                                _______
                                

 August 7, 2018.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Hensarling, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 5082]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 5082) to amend the Fair Debt Collection 
Practices Act to exclude law firms and licensed attorneys who 
are engaged in activities related to legal proceedings from the 
definition of a debt collector, to amend the Consumer Financial 
Protection Act of 2010 to prevent the Bureau of Consumer 
Financial Protection from exercising supervisory or enforcement 
authority with respect to attorneys when undertaking certain 
actions related to legal proceedings, and for other purposes, 
having considered the same, report favorably thereon without 
amendment and recommend that the bill do pass.

                          Purpose and Summary

    Introduced by Representative Alex Mooney on February 23, 
2018, H.R. 5082, the ``Practice of Law Technical Clarification 
Act of 2018'', amends the Fair Debt Collection Practices Act 
(FDCPA) [P.L. 95-109] to exclude from the definition of ``debt 
collector'' any law firm or licensed attorney engaged in 
litigation activities in connection with a legal action in a 
court of law to collect a debt on behalf of a client to the 
extent that such legal action is served on the defendant 
debtor, or service is attempted, in accordance with the 
applicable statute or rules of civil procedure. These 
activities include:
          (1) Serving, filing, or conveying formal legal 
        pleadings, discovery requests, or other documents 
        pursuant to the applicable rules of civil procedure; or
          (2) Communicating in, or at the direction of, a court 
        of law, or in the enforcement of a judgment; or
          (3) Any other activities engaged in as part of the 
        practice of law, under the laws of a State in which the 
        attorney is licensed, that relate to the legal action.
    This bill also amends the Dodd-Frank Wall Street Reform and 
Consumer Financial Protection Act of 2010 [P.L. 111-203] to 
clarify that the Bureau of Consumer Financial Protection (BCFP 
or Bureau) may not exercise supervisory or enforcement 
authority with respect to attorneys engaged in the practice of 
law and not offering or providing consumer financial products 
or services.

                  Background and Need for Legislation

    Title X of the Dodd-Frank Act gave the BCFP expansive 
supervisory authority over debt collection. Under its ``larger 
participant'' rule, the Bureau can supervise debt collectors 
and debt buyers with more than $10 million in annual receipts. 
The BCFP also has supervisory authority over service providers 
to large insured depository institutions as well as service 
providers to nonbank mortgage originators, payday lenders, and 
private student loan lenders. Those service providers can 
include third-party debt collectors, regardless of the 
collector's size.
    In addition to giving the Bureau broad authority over debt 
collection activities, the Dodd-Frank Act also transferred 
Federal Debt Collection Practices Act (FDCPA) enforcement 
authority to the Bureau, and gave it FDCPA rulemaking 
authority. The FDCPA was originally enforced by the Federal 
Trade Commission (FTC), which did not have rulemaking 
authority. The FDCPA was enacted to eliminate abusive debt 
collection practices by debt collectors, ensure industry parity 
for debt collectors who refrain from using abusive debt 
collection practices, and promote consistent State action to 
protect consumers against debt collection abuses.
    Under the FDCPA, debt collectors are prohibited from taking 
certain actions, including: contacting a consumer at any 
unusual or inconvenient time or place; harassing or abusing a 
consumer; communicating with third parties regarding a 
consumer's debt, except for the purpose of locating the 
consumer; and contacting a consumer if that consumer has 
notified the debt collector that the consumer refuses to pay 
the debt or that he wishes the debt collector to cease 
communication, except that the debt collector may still contact 
the consumer to notify him that the communication will stop or 
that the debt collector or creditor intends to take further 
action. A debt collector who violates any provision of the 
FDCPA is subject to civil liability as well as a private cause 
of action.
    The FDCPA applies only to third-party debt collectors, 
which are defined 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.''\1\ There are certain instances in which attorneys 
will be considered debt collectors and subject to compliance 
with the FDCPA. Current legal interpretation considers a lawyer 
who regularly tries to obtain payment of consumer debts through 
litigation to be a person who ``regularly collects or attempts 
to collect . . . debts owed'' in the definition of debt 
collector. Because of this, such a lawyer can expose himself to 
liability by failing to comport with the FDCPA's strictures and 
obligations--including the obligation to provide to consumers 
certain notices of their rights. As a result, attorneys trying 
collection cases in state court are routinely sued in federal 
court for technical violations of the FDCPA, even though they 
are undertaking litigation-related attorney conduct.
---------------------------------------------------------------------------
    \1\15 U.S.C. Sec. 1692(a)(6).
---------------------------------------------------------------------------
    However, there are also a number of classes of persons 
expressly excluded from the definition of ``debt collector.'' 
There is also an explicit exclusion for the ``practice of law'' 
included in Section 1027(e) of the Dodd-Frank Act:

          [T]he Bureau may not exercise any supervisory or 
        enforcement authority with respect to an activity 
        engaged in by an attorney as part of the practice of 
        law under the laws of a State in which the attorney is 
        licensed to practice law. . . . [unless it covers] the 
        offering or provision of a consumer financial product 
        or service . . . that is otherwise offered or provided 
        by the attorney in question with respect to any 
        consumer who is not receiving legal advice or services 
        from the attorney in connection with such financial 
        product or service.

    Currently, this provision has been construed to treat an 
attorney representing a creditor in a legal action against a 
debtor as having ``offered or provided'' a financial product or 
service. Therefore, under the current interpretation, an 
attorney that sues a debtor to collect a debt is providing the 
debtor with a financial product or service, and the BCFP may 
exercise its supervisory or enforcement authority against 
attorneys practicing debt collection or representing lenders in 
loan transactions.
    Although Section 1027(e) of the Dodd-Frank Act exempts most 
consumer lawyers from the BCFP's authority, it may not apply to 
some creditor lawyers. As the American Bar Association noted 
``as ``officers of the court,'' lawyers are subject to strict 
ethical rules and disciplinary action for any misconduct, 
including potential suspension or disbarment. Therefore, 
further regulation by the CFPB, other agencies, or Congress is 
unnecessary and is likely to conflict with regulation and 
oversight by the judicial branch of government.''\2\ H.R. 5082 
would restore Congressional intent and clarify that the BCFP 
does not have authority to regulate the practice of law, which 
is the purview of the state bar licensing system. H.R. 5082 is 
a narrow bill that exempts only lawyers engaged in actual 
litigation that seek collection on a client's behalf.
---------------------------------------------------------------------------
    \2\ https://www.americanbar.org/content/dam/aba/uncategorized/GAO/
abaonepagersupportinghr
5082-march2018.authcheckdam.pdf.
---------------------------------------------------------------------------

                                Hearings

    The Subcommittee on Financial Institutions held a hearing 
examining matters relating to H.R. 5082 on September 7, 2017.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
March 21, 2018, and ordered H.R. 5082 to be reported favorably 
to the without amendment by a recorded vote of 35 yeas to 25 
nays (recorded vote no. FC-169), a quorum being present.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. The 
sole recorded vote was on a motion by Chairman Hensarling to 
report the bill favorably to the House without amendment. The 
motion was agreed to by a recorded vote of 35 yeas to 25 nays 
(Record vote no. FC-169), a quorum being present.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the findings and recommendations of 
the Committee based on oversight activities under clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
are incorporated in the descriptive portions of this report.

                    Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee states that H.R. 5082 
will exempt lawyers engaged in actual litigation that seek 
collection on a client's behalf. This legislative construction 
allays opposition concerns that debt collectors will abuse the 
exemption and employ licensed attorneys to collect debts.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                 Congressional Budget Office Estimates

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, August 2, 2018.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 5082, the Practice 
of Law Technical Clarification Act of 2018.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Stephen 
Rabent.
            Sincerely,
                                                Keith Hall,
                                                          Director.
    Enclosure.

H.R. 5082--Practice of Law Technical Clarification Act of 2018

    Under current law, the Consumer Financial Protection Bureau 
(CFPB) and the Federal Trade Commission (FTC) share enforcement 
authority over the Fair Debt Collection Practices Act (FDCPA). 
The CFPB retains supervisory and rulemaking authority under 
that act. For the purposes of the FDCPA, H.R. 5082 would exempt 
law firms and licensed attorneys from being defined as ``debt 
collectors'' when they are engaged in certain litigation 
activities connected to collecting debt on behalf of a client.
    Using information from the affected agencies, CBO estimates 
that implementing H.R. 5082 would have an insignificant effect 
on costs for the FTC and would cost the CFPB less than $500,000 
to make required changes to a planned rulemaking. The costs for 
the CFPB are treated as direct spending in the budget.
    CBO also estimates that implementing H.R. 5082 could reduce 
the CFPB's and FTC's collections of civil penalties, which are 
recorded in the budget as revenues, by slightly limiting the 
scope of enforcement cases that the agencies may pursue. 
Because the CFPB can spend the penalties it collects, the 
reduction in penalties would also reduce the subsequent direct 
spending of those funds. However, CBO estimates that the 
effects on revenues and direct spending would not be 
significant over the 2018-2028 period.
    Because enacting the bill would affect direct spending and 
revenues, pay-as-you-go procedures apply.
    CBO estimates that enacting H.R. 5082 would not 
significantly increase net direct spending or on-budget 
deficits in any of the four consecutive 10-year periods 
beginning in 2029.
    H.R. 5082 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act.
    The CBO staff contact for this estimate is Stephen Rabent. 
The estimate was reviewed by H. Samuel Papenfuss, Deputy 
Assistant Director for Budget Analysis.

                       Federal Mandates Statement

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995.
    The Committee has determined that the bill does not contain 
Federal mandates on the private sector. The Committee has 
determined that the bill does not impose a Federal 
intergovernmental mandate on State, local, or tribal 
governments.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of the section 
102(b)(3) of the Congressional Accountability Act.

                         Earmark Identification

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee has carefully reviewed 
the provisions of the bill and states that the provisions of 
the bill do not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits within the meaning of the 
rule.

                    Duplication of Federal Programs

    In compliance with clause 3(c)(5) of rule XIII of the Rules 
of the House of Representatives, the Committee states that no 
provision of the bill establishes or reauthorizes: (1) a 
program of the Federal Government known to be duplicative of 
another Federal program; (2) a program included in any report 
from the Government Accountability Office to Congress pursuant 
to section 21 of Public Law 111-139; or (3) a program related 
to a program identified in the most recent Catalog of Federal 
Domestic Assistance, published pursuant to the Federal Program 
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No. 
98-169).

                   Disclosure of Directed Rulemaking

    Pursuant to section 3(i) of H. Res. 5, (115th Congress), 
the following statement is made concerning directed rule 
makings: The Committee estimates that the bill requires no 
directed rule makings within the meaning of such section.

             Section-by-Section Analysis of the Legislation

Section 1. Short title

    This section cites H.R. 5082 as the ``Practice of Law 
Technical Clarification Act of 2018.''

Section 2. Exclusion of law firms and attorneys from the definition of 
        debt collector when engaged in the practice of law

    This section amends Section 803(6) of the Fair Debt 
Collection Practices Act (15 U.S.C. 1692a(6)) to exclude law 
firms and attorneys engaged in litigation activities in 
connection with a legal action in a court of law to collect a 
debt on behalf of a client, including:
          (1) Serving, filing, or conveying formal legal 
        pleadings, discovery requests, or other documents 
        pursuant to the applicable rules of civil procedure; or
          (2) Communicating in, or at the direction of, a court 
        of law, or in the enforcement of a judgment; or
          (3) any other activities engaged in as part of the 
        practice of law, under the laws of a State in which the 
        attorney is licensed, that relate to the legal action.

Section 3. Amendment to bureau authority with respect to practice of 
        law

    This sections amends Section 1027(e)(2)(B) of the Consumer 
Financial Protection Act of 2010 (12 U.S.C. 5517(e)(2)(B) to 
clarify that the Consumer Financial Protection Bureau may not 
exercise supervisory or enforcement authority with respect to 
attorneys engaged in the practice of law and not offering or 
providing consumer financial products or services.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

                   FAIR DEBT COLLECTION PRACTICES ACT

           *       *       *       *       *       *       *
TITLE VIII--DEBT COLLECTION PRACTICES

           *       *       *       *       *       *       *

Sec. 803. Definitions

   As used in this title--
          (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 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 808(6), 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 affilated 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;
                  (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;
                  (F) any law firm or licensed attorney, to the 
                extent that--
                          (i) such firm or attorney is engaged 
                        in litigation activities in connection 
                        with a legal action in a court of law 
                        to collect a debt on behalf of a 
                        client, including--
                                  (I) serving, filing, or 
                                conveying formal legal 
                                pleadings, discovery requests, 
                                or other documents pursuant to 
                                the applicable statute or rules 
                                of civil procedure;
                                  (II) communicating in, or at 
                                the direction of, a court of 
                                law (including in depositions 
                                or settlement conferences) or 
                                in the enforcement of a 
                                judgment; or
                                  (III) any other activities 
                                engaged in as part of the 
                                practice of law, under the laws 
                                of a State in which the 
                                attorney is licensed, that 
                                relate to the legal action; and
                          (ii) such legal action is served on 
                        the defendant debtor, or service is 
                        attempted, in accordance with the 
                        applicable statute or rules of civil 
                        procedure; and
                  [(F)] (G) 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.

           *       *       *       *       *       *       *

                              ----------                              

               CONSUMER FINANCIAL PROTECTION ACT OF 2010

           *       *       *       *       *       *       *
TITLE X--BUREAU OF CONSUMER FINANCIAL PROTECTION

           *       *       *       *       *       *       *

Subtitle B--General Powers of the Bureau

           *       *       *       *       *       *       *

SEC. 1027. LIMITATIONS ON AUTHORITIES OF THE BUREAU; PRESERVATION OF 
                    AUTHORITIES.

  (a) Exclusion for Merchants, Retailers, and Other Sellers of 
Nonfinancial Goods or Services.--
          (1) Sale or brokerage of nonfinancial good or 
        service.--The Bureau may not exercise any rulemaking, 
        supervisory, enforcement or other authority under this 
        title with respect to a person who is a merchant, 
        retailer, or seller of any nonfinancial good or service 
        and is engaged in the sale or brokerage of such 
        nonfinancial good or service, except to the extent that 
        such person is engaged in offering or providing any 
        consumer financial product or service, or is otherwise 
        subject to any enumerated consumer law or any law for 
        which authorities are transferred under subtitle F or 
        H.
          (2) Offering or provision of certain consumer 
        financial products or services in connection with the 
        sale or brokerage of nonfinancial good or service.--
                  (A) In general.--Except as provided in 
                subparagraph (B), and subject to subparagraph 
                (C), the Bureau may not exercise any 
                rulemaking, supervisory, enforcement, or other 
                authority under this title with respect to a 
                merchant, retailer, or seller of nonfinancial 
                goods or services, but only to the extent that 
                such person--
                          (i) extends credit directly to a 
                        consumer, in a case in which the good 
                        or service being provided is not itself 
                        a consumer financial product or service 
                        (other than credit described in this 
                        subparagraph), exclusively for the 
                        purpose of enabling that consumer to 
                        purchase such nonfinancial good or 
                        service directly from the merchant, 
                        retailer, or seller;
                          (ii) directly, or through an 
                        agreement with another person, collects 
                        debt arising from credit extended as 
                        described in clause (i); or
                          (iii) sells or conveys debt described 
                        in clause (i) that is delinquent or 
                        otherwise in default.
                  (B) Applicability.--Subparagraph (A) does not 
                apply to any credit transaction or collection 
                of debt, other than as described in 
                subparagraph (C)(i), arising from a transaction 
                described in subparagraph (A)--
                          (i) in which the merchant, retailer, 
                        or seller of nonfinancial goods or 
                        services assigns, sells or otherwise 
                        conveys to another person such debt 
                        owed by the consumer (except for a sale 
                        of debt that is delinquent or otherwise 
                        in default, as described in 
                        subparagraph (A)(iii));
                          (ii) in which the credit extended 
                        significantly exceeds the market value 
                        of the nonfinancial good or service 
                        provided, or the Bureau otherwise finds 
                        that the sale of the nonfinancial good 
                        or service is done as a subterfuge, so 
                        as to evade or circumvent the 
                        provisions of this title; or
                          (iii) in which the merchant, 
                        retailer, or seller of nonfinancial 
                        goods or services regularly extends 
                        credit and the credit is subject to a 
                        finance charge.
                  (C) Limitations.--
                          (i) In general.--Notwithstanding 
                        subparagraph (B), subparagraph (A) 
                        shall apply with respect to a merchant, 
                        retailer, or seller of nonfinancial 
                        goods or services that is not engaged 
                        significantly in offering or providing 
                        consumer financial products or 
                        services.
                          (ii) Exception.--Subparagraph (A) and 
                        clause (i) of this subparagraph do not 
                        apply to any merchant, retailer, or 
                        seller of nonfinancial goods or 
                        services--
                                  (I) if such merchant, 
                                retailer, or seller of 
                                nonfinancial goods or services 
                                is engaged in a transaction 
                                described in subparagraph 
                                (B)(i) or (B)(ii); or
                                  (II) to the extent that such 
                                merchant, retailer, or seller 
                                is subject to any enumerated 
                                consumer law or any law for 
                                which authorities are 
                                transferred under subtitle F or 
                                H, but the Bureau may exercise 
                                such authority only with 
                                respect to that law.
                  (D) Rules.--
                          (i) Authority of other agencies.--No 
                        provision of this title shall be 
                        construed as modifying, limiting, or 
                        superseding the supervisory or 
                        enforcement authority of the Federal 
                        Trade Commission or any other agency 
                        (other than the Bureau) with respect to 
                        credit extended, or the collection of 
                        debt arising from such extension, 
                        directly by a merchant or retailer to a 
                        consumer exclusively for the purpose of 
                        enabling that consumer to purchase 
                        nonfinancial goods or services directly 
                        from the merchant or retailer.
                          (ii) Small businesses.--A merchant, 
                        retailer, or seller of nonfinancial 
                        goods or services that would otherwise 
                        be subject to the authority of the 
                        Bureau solely by virtue of the 
                        application of subparagraph (B)(iii) 
                        shall be deemed not to be engaged 
                        significantly in offering or providing 
                        consumer financial products or services 
                        under subparagraph (C)(i), if such 
                        person--
                                  (I) only extends credit for 
                                the sale of nonfinancial goods 
                                or services, as described in 
                                subparagraph (A)(i);
                                  (II) retains such credit on 
                                its own accounts (except to 
                                sell or convey such debt that 
                                is delinquent or otherwise in 
                                default); and
                                  (III) meets the relevant 
                                industry size threshold to be a 
                                small business concern, based 
                                on annual receipts, pursuant to 
                                section 3 of the Small Business 
                                Act (15 U.S.C. 632) and the 
                                implementing rules thereunder.
                          (iii) Initial year.--A merchant, 
                        retailer, or seller of nonfinancial 
                        goods or services shall be deemed to 
                        meet the relevant industry size 
                        threshold described in clause (ii)(III) 
                        during the first year of operations of 
                        that business concern if, during that 
                        year, the receipts of that business 
                        concern reasonably are expected to meet 
                        that size threshold.
                          (iv) Other standards for small 
                        business.--With respect to a merchant, 
                        retailer, or seller of nonfinancial 
                        goods or services that is a classified 
                        on a basis other than annual receipts 
                        for the purposes of section 3 of the 
                        Small Business Act (15 U.S.C. 632) and 
                        the implementing rules thereunder, such 
                        merchant, retailer, or seller shall be 
                        deemed to meet the relevant industry 
                        size threshold described in clause 
                        (ii)(III) if such merchant, retailer, 
                        or seller meets the relevant industry 
                        size threshold to be a small business 
                        concern based on the number of 
                        employees, or other such applicable 
                        measure, established under that Act.
                  (E) Exception from state enforcement.--To the 
                extent that the Bureau may not exercise 
                authority under this subsection with respect to 
                a merchant, retailer, or seller of nonfinancial 
                goods or services, no action by a State 
                attorney general or State regulator with 
                respect to a claim made under this title may be 
                brought under subsection 1042(a), with respect 
                to an activity described in any of clauses (i) 
                through (iii) of subparagraph (A) by such 
                merchant, retailer, or seller of nonfinancial 
                goods or services.
  (b) Exclusion for Real Estate Brokerage Activities.--
          (1) Real estate brokerage activities excluded.--
        Without limiting subsection (a), and except as 
        permitted in paragraph (2), the Bureau may not exercise 
        any rulemaking, supervisory, enforcement, or other 
        authority under this title with respect to a person 
        that is licensed or registered as a real estate broker 
        or real estate agent, in accordance with State law, to 
        the extent that such person--
                  (A) acts as a real estate agent or broker for 
                a buyer, seller, lessor, or lessee of real 
                property;
                  (B) brings together parties interested in the 
                sale, purchase, lease, rental, or exchange of 
                real property;
                  (C) negotiates, on behalf of any party, any 
                portion of a contract relating to the sale, 
                purchase, lease, rental, or exchange of real 
                property (other than in connection with the 
                provision of financing with respect to any such 
                transaction); or
                  (D) offers to engage in any activity, or act 
                in any capacity, described in subparagraph (A), 
                (B), or (C).
          (2) Description of activities.--The Bureau may 
        exercise rulemaking, supervisory, enforcement, or other 
        authority under this title with respect to a person 
        described in paragraph (1) when such person is--
                  (A) engaged in an activity of offering or 
                providing any consumer financial product or 
                service, except that the Bureau may exercise 
                such authority only with respect to that 
                activity; or
                  (B) otherwise subject to any enumerated 
                consumer law or any law for which authorities 
                are transferred under subtitle F or H, but the 
                Bureau may exercise such authority only with 
                respect to that law.
  (c) Exclusion for Manufactured Home Retailers and Modular 
Home Retailers.--
          (1) In general.--The Director may not exercise any 
        rulemaking, supervisory, enforcement, or other 
        authority over a person to the extent that--
                  (A) such person is not described in paragraph 
                (2); and
                  (B) such person--
                          (i) acts as an agent or broker for a 
                        buyer or seller of a manufactured home 
                        or a modular home;
                          (ii) facilitates the purchase by a 
                        consumer of a manufactured home or 
                        modular home, by negotiating the 
                        purchase price or terms of the sales 
                        contract (other than providing 
                        financing with respect to such 
                        transaction); or
                          (iii) offers to engage in any 
                        activity described in clause (i) or 
                        (ii).
          (2) Description of activities.--A person is described 
        in this paragraph to the extent that such person is 
        engaged in the offering or provision of any consumer 
        financial product or service or is otherwise subject to 
        any enumerated consumer law or any law for which 
        authorities are transferred under subtitle F or H.
          (3) Definitions.--For purposes of this subsection, 
        the following definitions shall apply:
                  (A) Manufactured home.--The term 
                ``manufactured home'' has the same meaning as 
                in section 603 of the National Manufactured 
                Housing Construction and Safety Standards Act 
                of 1974 (42 U.S.C. 5402).
                  (B) Modular home.--The term ``modular home'' 
                means a house built in a factory in 2 or more 
                modules that meet the State or local building 
                codes where the house will be located, and 
                where such modules are transported to the 
                building site, installed on foundations, and 
                completed.
  (d) Exclusion for Accountants and Tax Preparers.--
          (1) In general.--Except as permitted in paragraph 
        (2), the Bureau may not exercise any rulemaking, 
        supervisory, enforcement, or other authority over--
                  (A) any person that is a certified public 
                accountant, permitted to practice as a 
                certified public accounting firm, or certified 
                or licensed for such purpose by a State, or any 
                individual who is employed by or holds an 
                ownership interest with respect to a person 
                described in this subparagraph, when such 
                person is performing or offering to perform--
                          (i) customary and usual accounting 
                        activities, including the provision of 
                        accounting, tax, advisory, or other 
                        services that are subject to the 
                        regulatory authority of a State board 
                        of accountancy or a Federal authority; 
                        or
                          (ii) other services that are 
                        incidental to such customary and usual 
                        accounting activities, to the extent 
                        that such incidental services are not 
                        offered or provided--
                                  (I) by the person separate 
                                and apart from such customary 
                                and usual accounting 
                                activities; or
                                  (II) to consumers who are not 
                                receiving such customary and 
                                usual accounting activities; or
                  (B) any person, other than a person described 
                in subparagraph (A) that performs income tax 
                preparation activities for consumers.
          (2) Description of activities.--
                  (A) In general.--Paragraph (1) shall not 
                apply to any person described in paragraph 
                (1)(A) or (1)(B) to the extent that such person 
                is engaged in any activity which is not a 
                customary and usual accounting activity 
                described in paragraph (1)(A) or incidental 
                thereto but which is the offering or provision 
                of any consumer financial product or service, 
                except to the extent that a person described in 
                paragraph (1)(A) is engaged in an activity 
                which is a customary and usual accounting 
                activity described in paragraph (1)(A), or 
                incidental thereto.
                  (B) Not a customary and usual accounting 
                activity.--For purposes of this subsection, 
                extending or brokering credit is not a 
                customary and usual accounting activity, or 
                incidental thereto.
                  (C) Rule of construction.--For purposes of 
                subparagraphs (A) and (B), a person described 
                in paragraph (1)(A) shall not be deemed to be 
                extending credit, if such person is only 
                extending credit directly to a consumer, 
                exclusively for the purpose of enabling such 
                consumer to purchase services described in 
                clause (i) or (ii) of paragraph (1)(A) directly 
                from such person, and such credit is--
                          (i) not subject to a finance charge; 
                        and
                          (ii) not payable by written agreement 
                        in more than 4 installments.
                  (D) Other limitations.--Paragraph (1) does 
                not apply to any person described in paragraph 
                (1)(A) or (1)(B) that is otherwise subject to 
                any enumerated consumer law or any law for 
                which authorities are transferred under 
                subtitle F or H.
  (e) Exclusion for Practice of Law.--
          (1) In general.--Except as provided under paragraph 
        (2), the Bureau may not exercise any supervisory or 
        enforcement authority with respect to an activity 
        engaged in by an attorney as part of the practice of 
        law under the laws of a State in which the attorney is 
        licensed to practice law.
          (2) Rule of construction.--Paragraph (1) shall not be 
        construed so as to limit the exercise by the Bureau of 
        any supervisory, enforcement, or other authority 
        regarding the offering or provision of a consumer 
        financial product or service described in any 
        subparagraph of section 1002(5)--
                  (A) that is not offered or provided as part 
                of, or incidental to, the practice of law, 
                occurring exclusively within the scope of the 
                attorney-client relationship; or
                  (B) that is otherwise offered or provided by 
                the attorney in question with respect to any 
                consumer who is not receiving legal advice or 
                services from the attorney in connection with 
                such financial product or service[.], unless 
                such financial product or service is provided 
                by a licensed attorney who is not a debt 
                collector as described under section 803(6)(F) 
                of the Fair Debt Collection Practices Act.
          (3) Existing authority.--Paragraph (1) shall not be 
        construed so as to limit the authority of the Bureau 
        with respect to any attorney, to the extent that such 
        attorney is otherwise subject to any of the enumerated 
        consumer laws or the authorities transferred under 
        subtitle F or H.
  (f) Exclusion for Persons Regulated by a State Insurance 
Regulator.--
          (1) In general.--No provision of this title shall be 
        construed as altering, amending, or affecting the 
        authority of any State insurance regulator to adopt 
        rules, initiate enforcement proceedings, or take any 
        other action with respect to a person regulated by a 
        State insurance regulator. Except as provided in 
        paragraph (2), the Bureau shall have no authority to 
        exercise any power to enforce this title with respect 
        to a person regulated by a State insurance regulator.
          (2) Description of activities.--Paragraph (1) does 
        not apply to any person described in such paragraph to 
        the extent that such person is engaged in the offering 
        or provision of any consumer financial product or 
        service or is otherwise subject to any enumerated 
        consumer law or any law for which authorities are 
        transferred under subtitle F or H.
          (3) State insurance authority under gramm-leach-
        bliley.--Notwithstanding paragraph (2), the Bureau 
        shall not exercise any authorities that are granted a 
        State insurance authority under section 505(a)(6) of 
        the Gramm-Leach-Bliley Act with respect to a person 
        regulated by a State insurance authority.
  (g) Exclusion for Employee Benefit and Compensation Plans and 
Certain Other Arrangements Under the Internal Revenue Code of 
1986.--
          (1) Preservation of authority of other agencies.--No 
        provision of this title shall be construed as altering, 
        amending, or affecting the authority of the Secretary 
        of the Treasury, the Secretary of Labor, or the 
        Commissioner of Internal Revenue to adopt regulations, 
        initiate enforcement proceedings, or take any actions 
        with respect to any specified plan or arrangement.
          (2) Activities not constituting the offering or 
        provision of any consumer financial product or 
        service.--For purposes of this title, a person shall 
        not be treated as having engaged in the offering or 
        provision of any consumer financial product or service 
        solely because such person is--
                  (A) a specified plan or arrangement;
                  (B) engaged in the activity of establishing 
                or maintaining, for the benefit of employees of 
                such person (or for members of an employee 
                organization), any specified plan or 
                arrangement; or
                  (C) engaged in the activity of establishing 
                or maintaining a qualified tuition program 
                under section 529(b)(1) of the Internal Revenue 
                Code of 1986 offered by a State or other 
                prepaid tuition program offered by a State.
          (3) Limitation on bureau authority.--
                  (A) In general.--Except as provided under 
                subparagraphs (B) and (C), the Bureau may not 
                exercise any rulemaking or enforcement 
                authority with respect to products or services 
                that relate to any specified plan or 
                arrangement.
                  (B) Bureau action pursuant to agency 
                request.--
                          (i) Agency request.--The Secretary 
                        and the Secretary of Labor may jointly 
                        issue a written request to the Bureau 
                        regarding implementation of appropriate 
                        consumer protection standards under 
                        this title with respect to the 
                        provision of services relating to any 
                        specified plan or arrangement.
                          (ii) Agency response.--In response to 
                        a request by the Bureau, the Secretary 
                        and the Secretary of Labor shall 
                        jointly issue a written response, not 
                        later than 90 days after receipt of 
                        such request, to grant or deny the 
                        request of the Bureau regarding 
                        implementation of appropriate consumer 
                        protection standards under this title 
                        with respect to the provision of 
                        services relating to any specified plan 
                        or arrangement.
                          (iii) Scope of bureau action.--
                        Subject to a request or response 
                        pursuant to clause (i) or clause (ii) 
                        by the agencies made under this 
                        subparagraph, the Bureau may exercise 
                        rulemaking authority, and may act to 
                        enforce a rule prescribed pursuant to 
                        such request or response, in accordance 
                        with the provisions of this title. A 
                        request or response made by the 
                        Secretary and the Secretary of Labor 
                        under this subparagraph shall describe 
                        the basis for, and scope of, 
                        appropriate consumer protection 
                        standards to be implemented under this 
                        title with respect to the provision of 
                        services relating to any specified plan 
                        or arrangement.
                  (C) Description of products or services.--To 
                the extent that a person engaged in providing 
                products or services relating to any specified 
                plan or arrangement is subject to any 
                enumerated consumer law or any law for which 
                authorities are transferred under subtitle F or 
                H, subparagraph (A) shall not apply with 
                respect to that law.
          (4) Specified plan or arrangement.--For purposes of 
        this subsection, the term ``specified plan or 
        arrangement'' means any plan, account, or arrangement 
        described in section 220, 223, 401(a), 403(a), 403(b), 
        408, 408A, 529, 529A, or 530 of the Internal Revenue 
        Code of 1986, or any employee benefit or compensation 
        plan or arrangement, including a plan that is subject 
        to title I of the Employee Retirement Income Security 
        Act of 1974, or any prepaid tuition program offered by 
        a State.
  (h) Persons Regulated by a State Securities Commission.--
          (1) In general.--No provision of this title shall be 
        construed as altering, amending, or affecting the 
        authority of any securities commission (or any agency 
        or office performing like functions) of any State to 
        adopt rules, initiate enforcement proceedings, or take 
        any other action with respect to a person regulated by 
        any securities commission (or any agency or office 
        performing like functions) of any State. Except as 
        permitted in paragraph (2) and subsection (f), the 
        Bureau shall have no authority to exercise any power to 
        enforce this title with respect to a person regulated 
        by any securities commission (or any agency or office 
        performing like functions) of any State, but only to 
        the extent that the person acts in such regulated 
        capacity.
          (2) Description of activities.--Paragraph (1) shall 
        not apply to any person to the extent such person is 
        engaged in the offering or provision of any consumer 
        financial product or service, or is otherwise subject 
        to any enumerated consumer law or any law for which 
        authorities are transferred under subtitle F or H.
  (i) Exclusion for Persons Regulated by the Commission.--
          (1) In general.--No provision of this title may be 
        construed as altering, amending, or affecting the 
        authority of the Commission to adopt rules, initiate 
        enforcement proceedings, or take any other action with 
        respect to a person regulated by the Commission. The 
        Bureau shall have no authority to exercise any power to 
        enforce this title with respect to a person regulated 
        by the Commission.
          (2) Consultation and coordination.--Notwithstanding 
        paragraph (1), the Commission shall consult and 
        coordinate, where feasible, with the Bureau with 
        respect to any rule (including any advance notice of 
        proposed rulemaking) regarding an investment product or 
        service that is the same type of product as, or that 
        competes directly with, a consumer financial product or 
        service that is subject to the jurisdiction of the 
        Bureau under this title or under any other law. In 
        carrying out this paragraph, the agencies shall 
        negotiate an agreement to establish procedures for such 
        coordination, including procedures for providing 
        advance notice to the Bureau when the Commission is 
        initiating a rulemaking.
  (j) Exclusion for Persons Regulated by the Commodity Futures 
Trading Commission.--
          (1) In general.--No provision of this title shall be 
        construed as altering, amending, or affecting the 
        authority of the Commodity Futures Trading Commission 
        to adopt rules, initiate enforcement proceedings, or 
        take any other action with respect to a person 
        regulated by the Commodity Futures Trading Commission. 
        The Bureau shall have no authority to exercise any 
        power to enforce this title with respect to a person 
        regulated by the Commodity Futures Trading Commission.
          (2) Consultation and coordination.--Notwithstanding 
        paragraph (1), the Commodity Futures Trading Commission 
        shall consult and coordinate with the Bureau with 
        respect to any rule (including any advance notice of 
        proposed rulemaking) regarding a product or service 
        that is the same type of product as, or that competes 
        directly with, a consumer financial product or service 
        that is subject to the jurisdiction of the Bureau under 
        this title or under any other law.
  (k) Exclusion for Persons Regulated by the Farm Credit 
Administration.--
          (1) In general.--No provision of this title shall be 
        construed as altering, amending, or affecting the 
        authority of the Farm Credit Administration to adopt 
        rules, initiate enforcement proceedings, or take any 
        other action with respect to a person regulated by the 
        Farm Credit Administration. The Bureau shall have no 
        authority to exercise any power to enforce this title 
        with respect to a person regulated by the Farm Credit 
        Administration.
          (2) Definition.--For purposes of this subsection, the 
        term ``person regulated by the Farm Credit 
        Administration'' means any Farm Credit System 
        institution that is chartered and subject to the 
        provisions of the Farm Credit Act of 1971 (12 U.S.C. 
        2001 et seq.).
  (l) Exclusion for Activities Relating to Charitable 
Contributions.--
          (1) In general.--The Director and the Bureau may not 
        exercise any rulemaking, supervisory, enforcement, or 
        other authority, including authority to order 
        penalties, over any activities related to the 
        solicitation or making of voluntary contributions to a 
        tax-exempt organization as recognized by the Internal 
        Revenue Service, by any agent, volunteer, or 
        representative of such organizations to the extent the 
        organization, agent, volunteer, or representative 
        thereof is soliciting or providing advice, information, 
        education, or instruction to any donor or potential 
        donor relating to a contribution to the organization.
          (2) Limitation.--The exclusion in paragraph (1) does 
        not apply to other activities not described in 
        paragraph (1) that are the offering or provision of any 
        consumer financial product or service, or are otherwise 
        subject to any enumerated consumer law or any law for 
        which authorities are transferred under subtitle F or 
        H.
  (m) Insurance.--The Bureau may not define as a financial 
product or service, by regulation or otherwise, engaging in the 
business of insurance.
  (n) Limited Authority of the Bureau.--Notwithstanding 
subsections (a) through (h) and (l), a person subject to or 
described in one or more of such provisions--
          (1) may be a service provider; and
          (2) may be subject to requests from, or requirements 
        imposed by, the Bureau regarding information in order 
        to carry out the responsibilities and functions of the 
        Bureau and in accordance with section 1022, 1052, or 
        1053.
  (o) No Authority To Impose Usury Limit.--No provision of this 
title shall be construed as conferring authority on the Bureau 
to establish a usury limit applicable to an extension of credit 
offered or made by a covered person to a consumer, unless 
explicitly authorized by law.
  (p) Attorney General.--No provision of this title, including 
section 1024(c)(1), shall affect the authorities of the 
Attorney General under otherwise applicable provisions of law.
  (q) Secretary of the Treasury.--No provision of this title 
shall affect the authorities of the Secretary, including with 
respect to prescribing rules, initiating enforcement 
proceedings, or taking other actions with respect to a person 
that performs income tax preparation activities for consumers.
  (r) Deposit Insurance and Share Insurance.--Nothing in this 
title shall affect the authority of the Corporation under the 
Federal Deposit Insurance Act or the National Credit Union 
Administration Board under the Federal Credit Union Act as to 
matters related to deposit insurance and share insurance, 
respectively.
  (s) Fair Housing Act.--No provision of this title shall be 
construed as affecting any authority arising under the Fair 
Housing Act.

           *       *       *       *       *       *       *

                             MINORITY VIEWS

    H.R. 5082 exempts attorneys and law firms engaged in 
litigation from the Fair Debt Collection Practices Act (FDCPA) 
and eliminates the Consumer Financial Protection Bureau's 
(Consumer Bureau) authority over attorneys and law firms 
engaged in debt collection activities. These changes would 
allow unscrupulous attorneys, law firms, and their employees to 
abuse the FDCPA, and reopen a consumer protection loophole that 
Congress previously closed.
    In 1977, Congress passed the FDCPA ``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 disadvantaged, and 
to promote consistent State action to protect consumers against 
debt collection abuses.''\1\ The FDCPA defines a ``debt 
collector'' as a person who ``regularly collects or attempts to 
collect, directly or indirectly, [consumer] debts owed or due 
or asserted to be owed or due another.'' When the FDCPA was 
enacted, attorneys collecting debts on behalf of clients were 
exempted from the definition of ``debt collector.'' However, in 
1986 Congress reversed course and took the necessary step of 
amending the FDCPA to remove the attorney exemption to ``close 
a significant loophole.''\2\ Congress found that attorneys were 
taking advantage of their exemption to enter the debt 
collection industry at a drastic rate, which resulted in 
consumers being harmed.\3\ Congress also found that 
``attorneys, no less than lay [debt] collectors, can make 
errors in cases'' and ``consumers should not be stripped of an 
important protection solely because the collector happens to 
have a law degree.''\4\
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    \1\15 U.S.C. Sec. 1692.
    \2\H.R. Rep. No. 405, 99th Cong. 2d Sess. 3-6, reprinted in 1986 
U.S. Code Cong & Ad. News 1752, 1753-57. ``The purpose of the amendment 
was . . . to close a significant loophole, whereby attorneys engaging 
in traditional debt collection activities were able to avoid the 
FDCPA's precepts merely by virtue of the fact that they had, at some 
point, obtained a law degree.'' Firemen's Ins. Co v. Keating, 753 F. 
Supp. 1137, 1142 (S.D.N.Y. 1990).
    \3\Id.
    \4\Id.
---------------------------------------------------------------------------
    Proponents of H.R. 4082 argue that because attorneys are 
regulated by state bar associations, they would already face 
consequences if they participated in illegal or unethical 
practices. However, H.R. 5082's exemptions extend not only to 
attorneys, but to law firms and their employees. Congress is 
well aware of what happens when, in spite of state bar 
oversight, law firms choose focus on profits and not accuracy 
or justice. We only need to look back at the foreclosure mills 
that emerged during the 2007-2009 Financial Crisis, with non-
attorney law firm employees ``robo-signing'' and rubber-
stamping banks' foreclosure paperwork, which led to families 
being thrown out of their homes. By exempting law firms and 
their employees from the definition of a ``debt collector'' in 
the FDCPA, this bill would re-open the dangerous loophole that 
Congress rightfully closed in 1986.
    H.R. 5082 also removes the Consumer Bureau's authority over 
law firms and attorneys engaged in debt collection, but the 
Consumer Bureau's enforcement actions against debt collection 
law firms demonstrate why law firms and attorneys should not be 
broadly exempted from the agency's oversight. As mandated by 
the Dodd-Frank Wall Street Reform and Consumer Protection Act, 
the Consumer Bureau collects and monitors consumer complaints 
regarding consumer financial products or services.\5\ Since the 
Consumer Bureau began collecting this consumer complaint data, 
debt collection has continually topped the list of categories 
receiving complaints, with over 250,000 consumers reporting 
issues with debt collection to date. The Consumer Bureau has 
also advanced several enforcement actions against law firms 
engaged in predatory debt collection practices, and secured 
millions of dollars in remedies for victims who were affected. 
Removing the Consumer Bureau's oversight in this space would 
undoubtedly harm the millions of consumers who rely on the 
Bureau's enforcement for relief.
---------------------------------------------------------------------------
    \5\12 U.S.C. Sec. 5493.
---------------------------------------------------------------------------
    For these reasons, we oppose H.R. 5082.

                                   Maxine Waters.
                                   Michael E. Capuano.
                                   Al Green.
                                   Carolyn B. Maloney.
                                   Nydia M. Velazquez.
                                   Gregory W. Meeks.

                                  [all]
```