Court Opinion

ID: 9476744
Source: CourtListenerOpinion
Date Created: 2023-08-05 06:03:58.936288+00
Date Added: 2024-06-11T17:45:28.807829
License: Public Domain

BOOCHEVER, Circuit Judge,
dissenting in part:
I agree with the opinion except for the holding that withholding Juras’ transcript did not violate the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692-1692o (1982 & Supp. Ill 1985). It is a violation of section 1692e to “threaten to take any action that cannot legally be taken.” The NDSL statutes require that institutions make the loans to students “without security.” Taking security violates the law, so that using that method to collect a debt constitutes a violation of the Act. Congress included the prohibition against security in the original NDSL statute, see Pub.L. No. 85-864 § 205(b)(5), 72 Stat. 1580,1585 (1958), and has retained it to the present. See Pub.L. No. 99-498 § 405, 100 Stat. 1268, 1450 (1986).
To resolve Juras’ claim that withholding his transcript is an illegal action, we must interpret Congress’ intent in prohibiting security for student loans. Unfortunately, as the majority points out, there is scant authority to assist us in this task. The loan statutes do not define “security” and the legislative history is silent on the meaning and purpose of the prohibition against taking security. See H.R.Rep. No. 2157, 85 Cong., 2d. Sess. 31, reprinted in 1958 U.S. Code Cong. & Admin.News 4731, 4761. Here we must apply a term to a situation that probably was not contemplated by anyone when Congress voted on the original or subsequent loan programs. We should look to what we discern as the general purpose of the NDSL legislation and the policies that led Congress to include the provision “without security.”
I have also considered the use of the term “security” in the Uniform Commercial Code, generally adopted in all of the states. The U.C.C. defines “security interest” as “an interest in personal property or fixtures which secures payment or performance of an obligation.” U.C.C. § 1-201(37) (1977). Under this definition, Juras’ entitlement to an official copy of his grades must constitute an interest in personal property in order to qualify as a security interest. I believe that a right of access to the transcript constitutes an interest in personal property, but we need not resolve that question.1 The scope of the term “security” in the NDSL statutes is undoubtedly broader than interests in personal property and fixtures: universities could not require students to give them deeds of trust on any real property the students might own in order to ensure repayment of NDSL loans.
I believe that Congress used the term in its more basic sense, meaning something that provides “protection,” “assurance,” or “indemnification.” Black’s Law Dictionary 1216 (5th ed. 1979). The practice of withholding of transcripts is intended to assure payment of monies due the universi*747-751ty. Therefore it is a means of taking security for the loan. This construction is supported by my belief that Congress, in encouraging higher education by generous loan terms, see 20 U.S.C. § 425(b) (1976); 20 U.S.C. §§ 1087dd-1087ee (1981), never could have intended the “Catch 22” situation alluded to by Aman: “No payment, no transcript; no transcript, probably no job; no job, no earnings.” [CR 9, Ex. F]
The majority states that “Juras has a right of access to his transcript subject to restrictions imposed by the university, but not an ownership interest in it.” Even assuming that Juras did not have a property interest in his transcript, the restriction of that right of access to assure loan repayment amounts to taking security for the loan. If the promissory note that Juras executed included a provision that Juras would be denied his right of access to his transcript at any time the loan was in default, such a condition would be for the purpose of securing payment of the loan. The fact that the condition was not written into the loan agreement but contained in a separate policy statement of the university does not alter the fact that it constitutes security for the payment of the loan.
I conclude that a provision conditioning the release of a transcript on payment in full of a NDSL loan constitutes use of the transcript as security for payment of the loan in violation of the loan statutes. Therefore, the threat by a debt collector to withhold the transcript until the student pays his debt is a threat to take an action that cannot legally be taken and violates 15 U.S.C. § 1692e(5) (1982). I do not imply that a university may not withhold transcripts to assure payment of other types of debts. I would hold only that transcripts cannot be withheld to secure payment of NDSL indebtedness.

. Juras and the university may be joint owners of his transcript. The university does not release transcripts without a written request from the student. Bulletin of Montana State University 24-25 (1976). The student has, therefore, the right to exclude persons other than the university from using it, indicating that he has at least some of the rights of an owner under Montana law. See MontCode Ann. § 70-1-101 (1986).