I
106TH CONGRESS
1ST SESSION
H. R. 3435
To amend the Fair Debt Collection Practices Act to reduce the cost of
credit, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
NOVEMBER 17, 1999
Mr. METCALF (for himself and Mr. GOODE) introduced the following bill;
which was referred to the Committee on Banking and Financial Services
A BILL
To amend the Fair Debt Collection Practices Act to reduce
the cost of credit, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Credit Cost Reduction
Act of 1999’’.
SEC. 2. EXEMPTION FOR COMMUNICATIONS INVOLVING
LEGAL PROCEEDINGS.
Section 803(2) of the Fair Debt Collection Practices
Act (15 U.S.C. 1692a(2)) is amended by adding at the
end the following new sentence: ‘‘Such term does not in-
clude actions taken pursuant to the Federal Rules of Civil
Procedure; in the case of a proceeding in a State court,
the rules of civil procedure available under the laws of
such State; or a nonjudicial foreclosure.’’.
SEC. 3. COLLECTION ACTIVITY FOLLOWING INITIAL NO-
TICE.
Section 809 of the Fair Debt Collection Practices Act
(15 U.S.C. 1692(g)) is amended by adding at the end the
following new subsection:
‘‘(d) CONTINUATION DURING PERIOD.—Collection
activities and communications may continue during the
30-day period described in subsection (a) unless the con-
sumer requests the cessation of such activities.’’.
SEC. 4. LIABILITY FOR NONCOMPLIANCE.
(a) CLARIFICATION OF LIMITATION ON CLASS AC-
TION AWARDS.—Section 813(a)(2)(B) of the Fair Debt
Collection Practices Act (15 U.S.C. 1692k(a)(2)(B)) is
amended—
(1) by inserting ‘‘or any series of class actions
arising out of the same violations by the same debt
collector’’ after ‘‘case of a class action’’; and
(2) by inserting ‘‘of such class action or series
of class actions’’ after ‘‘all other class members’’.
(b) ATTORNEYS FEES TO ENFORCE CIVIL LIABIL-
ITY.—Paragraph (3) of section 813(a) of the Fair Debt
Collection Practices Act (15 U.S.C. 1692k(a)) is amended
to read as follows:
‘‘(3) subject to subsection (f), in the case of a
successful action to enforce a liability under para-
graph (1) or (2), the costs of the action, including
reasonable attorney’s fees, as determined by the
court, in an amount not to exceed the amount
awarded in such action under the applicable para-
graph.’’.
(c) FACTORS FOR CONSIDERATION.—Section 813(b)
of the Fair Debt Collection Practices Act (15 U.S.C.
1692k(b)) is amended—
(1) in the portion of such subsection which pre-
cedes paragraph (1), by striking ‘‘liability in any ac-
tion’’ and inserting ‘‘any award’’; and
(2) by striking paragraph (1) and inserting the
following new paragraph:
‘‘(1) in any action under subsection (a)(2)(A),
the frequency and persistence of noncompliance by
the debt collector, the nature of such noncompliance,
the extent to which the such noncompliance was in-
tentional, and the amount of actual damages award-
ed; or’’.
(d) BONA FIDE ERRORS.—Section 813(c) of the Fair
Debt Collection Practices Act (15 U.S.C. 1692k(c)) is
amended—
(1) by striking ‘‘(c) A debt collector may not’’
and inserting ‘‘(c) BONA FIDE ERRORS.—
‘‘(1) IN GENERAL.—A debt collector may not’’;
and
(2) by adding at the end the following new
paragraph:
‘‘(2) RELIANCE
ON
RULES
OF
CIVIL
PROCE-
DURE.—A debt collector may not be held liable in
any action brought under this title if the debt col-
lector shows by a preponderance of the evidence that
the violation resulted from good faith compliance
with the Federal Rules of Civil Procedure; in the
case of a proceeding in a State court, the rules of
civil procedure available under the laws of such
State; or a nonjudicial foreclosure proceeding.’’.
SEC. 5. MORTGAGE SERVICERS’ REGULATORY BURDEN RE-
LIEF.
(a) IN GENERAL.—The Fair Debt Collection Prac-
tices Act (15 U.S.C. 1692 et seq.) is amended—
(1) by redesignating section 818 as section 819;
and
(2) by inserting after section 817 the following
new section:
‘‘§ 818. Mortgage servicer exemption
‘‘(a) EXEMPTION.—Any servicer of federally related
mortgage loans secured by first liens—
‘‘(1) who is a debt collector; and
‘‘(2) for whom the collection of delinquent debts
is secondary to the servicer’s primary function of
servicing federally related mortgage loans,
shall be exempt from the requirements of sections 807(11)
and 809 in connection with the collection of any debt
which is a federally related mortgage loan secured by a
first lien.
‘‘(b) VALIDATION STATEMENT.—If a debt collector is
exempt, pursuant to subsection (a), from the requirements
of section 809 with respect to any federally related mort-
gage loan to a consumer which is secured by a first lien,
the servicer shall provide to the consumer, at least 30 days
before any acceleration of the debt and without charge to
such consumer—
‘‘(A) a notice of the consumer’s right to re-
ceive a validation statement; or
‘‘(B) a validation statement.
‘‘(2) QUALIFIED VALIDATION REQUESTS.—