I
106TH CONGRESS
1ST SESSION
H. R. 2544
To amend the Fair Debt Collection Practices Act to reduce the cost of
credit, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JULY 16, 1999
Mr. METCALF 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
‘‘(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 intentional, and the
amount of actual damages awarded; or’’.
(e) 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.—
‘‘(A) 
RESPONSE
TO
REQUEST.—If 
a
servicer described in paragraph (1) provides a
consumer with a notice under subparagraph (A)
of such paragraph, the servicer shall provide
such consumer with a validation statement not
more than 10 days after receiving a qualified
validation request from such consumer.
‘‘(B) NO DELAY REQUIRED.—No provision
of this title shall be construed as requiring a
servicer described in paragraph (1) to delay ac-
celeration, foreclosure, or any other action with
respect to a federally related mortgage loan for
which the servicer provided a notice to the con-
sumer under paragraph (1)(A) due to the re-
ceipt by such servicer of a qualified validation
request from such consumer.
‘‘(C) RECEIPT
AND
HANDLING
OF
RE-
QUESTS.—A servicer described in paragraph (1)
may establish a separate and exclusive office for
the receipt and handling of any qualified valida-
tion request from any consumer under this sub-
section if the servicer provides notice of that
fact and the address of the office to the
consumer—
‘‘(i) in the notice provided to such
consumer pursuant to paragraph (1)(A); or
‘‘(ii) separately by 1st class mail with
prepaid postage.
‘‘(3) REASONABLE
ESTIMATES
OF
3D
PARTY
CHARGES.—A servicer described in paragraph (1)
shall not be liable under this title for any inaccurate
amount contained in a validation statement provided
to a consumer with respect to a federally related
mortgage loan secured by a first lien to the extent
the inaccurate amount—
‘‘(A) relates to costs for services to be pro-
vided by third parties; and
‘‘(B) constitutes a reasonable estimate of
such costs.
‘‘(c) DEFINITIONS.—For purposes of this section, the
following definitions shall apply:
‘‘(1) FEDERALLY RELATED MORTGAGE LOAN.—
The term ‘federally related mortgage loan’ has the
meaning given to such term in section 3(1) of the
Real Estate Settlement Procedures Act of 1974.
‘‘(2) QUALIFIED
VALIDATION
REQUEST.—The
term ‘qualified validation request’ means a written
request for a validation statement from a consumer
to a servicer which—
‘‘(A) includes the name and account num-
ber of the consumer or such other information
as may be necessary to allow the servicer to
identify such name and account number; and
‘‘(B) is not written on or otherwise in-
cluded with a payment coupon or other pay-
ment medium provided by the servicer.
‘‘(3) 
SERVICER; 
SERVICING.—The 
terms
‘servicer’ and ‘servicing’ have the meanings given to
such terms in section 6(i) of the Real Estate Settle-
ment Procedures Act of 1974.
‘‘(4) VALIDATION STATEMENT.—The term ‘vali-
dation statement’ means a statement of—
‘‘(A) the total amount a consumer must
pay, as of a particular date, to bring the con-
sumer’s loan current; and
‘‘(B) the total amount a consumer must
pay, as of a particular date, to satisfy the loan
in full.’’.