Court Opinion

ID: 2997457
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:36:31.372132+00
Date Added: 2024-06-11T11:38:58.468467
License: Public Domain

In the
 United States Court of Appeals
               For the Seventh Circuit
                          ____________

Nos. 04-1074 & 04-1455
ELIZABETH KORT, individually and
on behalf of all others similarly situated,
                                                                 Plaintiff,
                                  v.

DIVERSIFIED COLLECTION SERVICES, INC.,
a California corporation,
                                                 Defendant-Appellee.

Appeal of:
HATTIE HARRIS-ALLEYNE and
LINDSAY MILLER,
                                             Intervenors-Appellants.

                          ____________
          Appeals from the United States District Court for
          the Northern District of Illinois, Eastern Division.
            No. 01 C 0689—Robert W. Gettleman, Judge.
                          ____________
 ARGUED NOVEMBER 2, 2004—DECIDED JANUARY 10, 2005
                  ____________

  Before POSNER, MANION, and EVANS, Circuit Judges.
  MANION, Circuit Judge. Elizabeth Kort, representing a
class of individuals, sued Diversified Collection Services
(“DCS”), claiming that DCS violated the Fair Debt Collec-
2                                      Nos. 04-1074 & 04-1455

tion Practices Act (“FDCPA”), 15 U.S.C. §§ 1692, et seq., by
mailing her and others misleading garnishment notices. The
debts at issue were student loans governed by the Higher
Education Act (“HEA”), 20 U.S.C. §§ 1070, et seq. The text of
the garnishment notice was taken entirely from a form
issued by the Department of Education (“DOE”), which is
the federal agency charged with regulating under the HEA.
Given DCS’s reliance on the DOE form, the district court
ruled that DCS was entitled to an affirmative defense under
the FDCPA known as the “bona fide error” defense and
thus granted DCS summary judgment on this issue. Kort is
no longer prosecuting the case, but Hattie Harris-Alleyne
and Lindsay Miller have intervened to appeal the grant of
summary judgment to DCS on behalf of themselves and the
corresponding class. We affirm.

                               I.
  Elizabeth Kort procured a student loan under the HEA’s
Federal Family Education Loan Program. The Illinois
                                           1
Student Assistance Commission (“ISAC”) guaranteed the
loan. ISAC hired DCS to collect delinquent debts. As of
February 2000, Kort’s debt to ISAC, totaling approximately
$1,600.00, was delinquent. Consequently, DCS, as an agent

1
  Because of the need to use several combinations of letters to
identify laws, agencies, and parties, we provide a list for quick
reference:
    DCS      = Diversified Collection Services
    DOE      = Department of Education
    FDCPA = Fair Debt Collection Practices Act
    HEA      = Higher Education Act
    ISAC     = Illinois Student Assistance Commission
Nos. 04-1074 & 04-1455                                        3

of ISAC, took steps under the HEA to collect Kort’s debt for
ISAC, specifically, to garnish her wages.
  The HEA permits guarantors, such as ISAC, to admin-
istratively garnish (i.e., without going to court) a debtor’s
wages. See 20 U.S.C. § 1095a. Before wages can be adminis-
tratively garnished, however, the guarantor, or its agent,
must give the debtor at least thirty days’ notice. See 20 U.S.C.
§ 1095a(a)(2). Attempting to comply with this requirement,
DCS mailed Kort a notice—dated February 5, 2000, and
postmarked February 7, 2000—to inform her of ISAC’s in-
tent to garnish her wages unless she took certain actions by
March 6, 2000. Also, attached to the notice was a response
form, which enabled Kort to claim exemptions and request
a hearing in response to the garnishment notice.
   One such exemption from wage garnishment is the HEA’s
so-called unemployment exemption. See 20 U.S.C.
§ 1095a(a)(7). The HEA mandates that, for a debtor who was
“involuntarily separated” from the debtor’s employment
and then “reemployed,” “no amount may be deducted from
the disposable pay of [the debtor] until [the debtor] has been
reemployed continuously for at least 12 months.” Id. Thus,
a debtor who successfully invokes this exemption can avert
wage garnishment during the first twelve months on the job.
Pursuant to its grant of regulatory authority, see 20 U.S.C.
§ 1082(a)(1), the DOE amplified this point in a regulation
stating: “The guaranty agency may not garnish the wages of
a [debtor] whom it knows has been involuntarily separated
from employment until the [debtor] has been reemployed
continuously for at least 12 months.” 34 C.F.R. § 682.410(b)(9)-
                          2
(i)(G) (emphasis added). In order for a guarantor to have the

2
  This regulation was originally designated as 34 C.F.R.
§ 682.410(b)(10)(i)(G), but was later re-designated as 34 C.F.R.
                                                  (continued...)
4                                     Nos. 04-1074 & 04-1455

needed knowledge that a debtor is entitled to this exemp-
tion, the debtor must ordinarily come forward, according to
the DOE’s interpretation of the exemption, with information
to substantiate that the debtor qualifies for the exemption.
See Federal Family Education Loan Program: Final Regula-
tions, 59 Fed. Reg. 22462, 22474 (Apr. 29, 1994).
  To ensure compliance with the HEA and the correspond-
ing regulations, the DOE drafted a form notice for guar-
antors—and thus for their agents—to use in initiating gar-
nishment proceedings. The form is entitled “Notice Prior to
Wage Withholding.” The DOE form handles the HEA
unemployment exemption as follows:
    If you document that you have been involuntarily sep-
    arated from employment, [fill in name of guaranty
    agency] will not garnish your wages until you have been
    re-employed continuously for twelve (12) months. If
    you wish to claim this exemption from wage garnish-
    ment, you need to complete Part II of the enclosed
    “Request for Hearing” form and send us written proof
                                                            3
    that you qualify for the exemption by MM/DD/YYYY.[ ]
    Satisfactory written proof is the following: documents
    from the [fill in name of state] Employment Commission
    (or similar state agency in another state) indicating your

(...continued)
§ 682.410(b)(9)(i)(G). See Federal Family Education Loan Program
and William D. Ford Federal Direct Loan Program: Final Regula-
tions, 65 Fed. Reg. 65616, 65621 (Nov. 1, 2000).
3
  The DOE offers no explicit guidance on what this deadline
should be; however, in reading the DOE form as a whole, it is
clear that the deadline in the unemployment-exemption para-
graph is meant to comport with the HEA’s general thirty-day
deadline, which is referenced throughout the DOE form. See 20
U.S.C. § 1095a(a)(2).
Nos. 04-1074 & 04-1455                                         5

    entitlement to unemployment compensation, and a
    statement from your present employer indicating the
    date you began work at your present job. If you are not
    covered under a state’s unemployment program (even if
    involuntarily separated from employment), you must
    provide a statement to that effect from the state unem-
    ployment agency. Failure to provide written proof may
    result in your claim of exemption being rejected as
    unsubstantiated.
R. 51 at Ex. C (emphasis omitted). The DOE’s accompanying
“Request for Hearing” form, which debtors could use to
respond to the garnishment notice, utilizes similar language
in discussing the exemption.
  These DOE forms were not simply optional suggestions;
                                                            4
they were and are mandatory. See 34 C.F.R. § 682.401(d)(3).
On March 17, 1998, the policy chief of the DOE’s Federal
Family Education Loan Program issued the DOE-approved
“Notice Prior to Wage Withholding” and “Request for
Hearing” forms to guarantors, including ISAC, with a cover

4
   In February 2000, when DCS mailed its notice to Kort,
§ 682.401(d)(3) stated: “The guaranty agency shall use a common
application form, promissory note, and other common forms
approved by the Secretary.” 34 C.F.R. § 682.401(d)(3) (1999). Ef-
fective July 1, 2000, the subparagraph was amended to state: “The
guaranty agency must use common application forms, prom-
issory notes, Master Promissory Notes (MPN), and other common
forms approved by the Secretary.” See Federal Family Education
Loan Program and William D. Ford Federal Direct Loan Program:
Final Regulations, 64 Fed. Reg. 58938, 58947, 58959-60 (Nov. 1,
1999). The amendment is of no consequence here, and the bottom
line is that the garnishment forms issued by the DOE were
compulsory.
6                                     Nos. 04-1074 & 04-1455

letter stating: “These new notices must be used for any wage
garnishment initiated on or after June 1, 1998.” R. 51 at Ex. C
                        5
(emphasis in original).
  Consequently, ISAC and DCS used the government forms
as directed. The notice and the response form that DCS sent
to Kort followed the DOE forms verbatim, adding only
Kort’s name, address, amount owed, and other specifics.
With respect to the unemployment exemption, the DCS
notice tracked the DOE form as follows:
    If you document that you have been involuntarily
    separated from employment, Illinois Student Assistance
    Commission will not garnish your wages until you have
    been re-employed continuously for twelve (12) months.
    If you wish to claim this exemption from wage garnish-
    ment, you will need to complete Part II of the enclosed
    Request for Hearing form and send us written proof that
                                                          6
    you qualify for the exemption by March 6, 2000.[ ]
    Satisfactory “written proof” is the following: documents
    from the applicable Employment Commission (or a
    similar state agency in another state) indicating your
    entitlement to unemployment compensation, and a
    statement from your present employer indicating the
    date you began work at your present job. If you are not
    covered under a state’s unemployment program (even
    if involuntarily separated from employment), you must
    provide a statement to that effect from the state unem-
    ployment agency. Failure to provide written proof may
    result in your claim of exemption being rejected as
    unsubstantiated.

5
 These forms were revised versions of prior forms issued by the
DOE.
6
  The March 6 deadline was thirty days from the date DCS
printed and dated its notice, February 5. See supra n.3.
Nos. 04-1074 & 04-1455                                       7

R. 51. at Ex. A (emphasis omitted). The response form that
DCS provided to Kort likewise followed the similar text
about the exemption in the DOE’s “Request for Hearing”
form.
  After receiving the DCS notice, Kort filed a two-count
complaint in the Northern District of Illinois against DCS,
claiming that the notice was false and misleading in vio-
lation of the FDCPA. Count one alleged that the DCS notice
misstated the date by which Kort had to take action to avoid
the garnishment. Count two alleged that the DCS notice
contained misinformation about the HEA unemployment
exemption. Specifically, Count two asserted: “The statute
does not require the consumer to take any action, or act
within any particular time frame, to qualify for the exemp-
tion.” R. 1 at 5. Kort maintained that, because the text of the
HEA contained no documentation or deadline requirement,
DCS wrongfully required her to come forward with docu-
mentation of her eligibility for the exemption and to do so
by a certain date.
  Kort brought her action as a class action on behalf of
herself and others who had received the DCS notice. After
certifying a class of 460 individuals for count two and a
subclass of 107 individuals for count one, the district court
entertained cross-motions for summary judgment on each
count.
  The district court granted Kort and the corresponding
subclass summary judgment on count one. The district court
determined that, because the March 6 deadline in the notice
was less than thirty days after DCS mailed the notice on
February 7, the notice violated the FDCPA: the notice
wrongfully stated that the garnishment could begin on a
date that came before the HEA’s thirty-day notice period
had expired. See Kort v. Diversified Collection Servs., 270 F.
Supp. 2d 1017, 1022-25 (N.D. Ill. 2003). Thereafter, Kort, on
8                                   Nos. 04-1074 & 04-1455

behalf of herself and the count-one subclass, accepted an
offer of judgment from DCS. Kort received $1,000.00 and the
other 106 subclass members each received $300.00. Kort also
recovered her attorneys’ fees and costs. Count one is not at
issue on appeal.
  Conversely, the district court granted DCS summary
judgment on count two. The district court ruled that DCS
was insulated from liability under the FDCPA’s bona fide
error defense. The district court concluded that, even if the
notice violated the FDCPA by misleading Kort and the
others about the HEA unemployment exemption, the vio-
lation was excusable given DCS’s reliance on the DOE form.
See id. at 1025-27. The district court did not render an
alternative ruling on whether the notice actually violated
the FDCPA in this regard.
  In accepting DCS’s offer of judgment, Kort extinguished
her appeal rights. Nonetheless, the district court allowed
count-two class members Hattie Harris-Alleyne and Lindsay
Miller to intervene for the purpose of appealing the grant of
summary judgment against the count-two class. On appeal,
Harris-Alleyne and Miller request that we reverse the grant
of summary judgment for DCS on count two and that we
remand the case to the district court with instructions to
enter summary judgment in favor of the count-two class.

                             II.
  We review a district court’s decision involving cross-mo-
tions for summary judgment de novo. See O’Regan v.
Arbitration Forums, Inc., 246 F.3d 975, 983 (7th Cir. 2001).
“With cross-motions, our review of the record requires that
we construe all inferences in favor of the party against whom
the motion under consideration is made.” Id. (internal quo-
tation omitted). “Summary judgment is proper if the record
demonstrates that there is no genuine issue as to any ma-
Nos. 04-1074 & 04-1455                                         9

terial fact and that a moving party is entitled to judgment as
a matter of law.” Id. (internal quotation and brackets
omitted).
   Under the FDCPA, a debt collector is subject to civil
liability, see 15 U.S.C. § 1692k(a), if it “use[s] any false,
deceptive, or misleading representation or means in con-
nection with the collection of any debt,” 15 U.S.C. § 1692e,
or if it “use[s] unfair or unconscionable means to collect or
attempt to collect any debt,” 15 U.S.C. § 1692f. The statute,
however, also affords debt collectors an affirmative defense,
called the bona fide error defense. Under this defense, “[a]
debt collector may not be held liable [under the FDCPA] if
the debt collector shows by a preponderance of evidence
that the violation was not intentional and resulted from a
bona fide error notwithstanding the maintenance of proce-
dures reasonably adapted to avoid any such error.” 15 U.S.C.
§ 1692k(c) (emphasis added).
  In spite of the fact that DCS used the precise language
directed by the DOE, Harris-Alleyne and Miller claim that
such language erroneously explained the HEA unemploy-
ment exemption thereby causing a violation of the FDCPA.
The question before us is whether DCS, given its adherence
to the DOE form, is entitled to the bona fide error defense.
In addressing this question, we assume only for the sake of
argument, as the district court did, that DCS (and thus the
DOE) erred in explaining the HEA unemployment exemp-
tion in the garnishment notice. Given that assumption, we
presume only for the sake of argument that DCS violated
            7
the FDCPA. Here, we are dealing with the interplay between

7
  Hereinafter, we will use the phrases “assumed error” and
“presumed violation” (or “presumed FDCPA violation”) simply
to address Harris-Alleyne and Miller’s arguments within the
framework of the bona fide error defense. To be clear, we are not
                                                   (continued...)
10                                     Nos. 04-1074 & 04-1455

two federal statutes, and it is important to distinguish be-
tween the “assumed error” in this case and the closely-linked
“presumed violation.” Under Harris-Alleyne and Miller’s
theory of events, DCS erroneously explained the unemploy-
ment exemption under the HEA. This is the assumed error.
The commission of this assumed error caused DCS, accord-
ing to Harris-Alleyne and Miller’s theory, to violate the
FDCPA. This is the presumed violation. Thus, the root of the
assumed error is the HEA, and the root of the presumed
violation is the FDCPA.
  To qualify for the bona fide error defense, DCS must make
three showings under § 1692k(c): (1) it must show that the
presumed FDCPA violation was not intentional; (2) it must
show that the presumed FDCPA violation resulted from a
bona fide error (here, the assumed error regarding the
HEA); and (3) it must show that it maintained procedures
reasonably adapted to avoid any such error. See Jenkins v.
Heintz, 124 F.3d 824, 834 (7th Cir. 1997). We will consider
each element in turn.

7
  (...continued)
endorsing Harris-Alleyne and Miller’s ultimate claim that DCS
erred in explaining the HEA and thus violated the FDCPA.
Rather, in order to reach Harris-Alleyne and Miller’s challenges
to the bona fide error defense, we assume/presume that such an
error and violation occurred. Nothing more. There is, moreover,
no particular distinction between the terms “assumed” and “pre-
sumed” in this context; the differing adjectives are used merely
as a means of reducing confusion by distinguishing the “error”
and the “violation” from each other. This distinction will become
important as we analyze the elements of the bona fide error
defense. As discussed below, even had DCS erred and violated the
FDCPA as claimed by Harris-Alleyne and Miller, DCS is entitled
to the bona fide error defense and thus prevails.
Nos. 04-1074 & 04-1455                                         11

  First, DCS’s presumed violation was not intentional. By
carefully following the DOE form, DCS did not intentionally
violate the FDCPA. That is, tracking the DOE form word for
      8
word satisfactorily shows that DCS did not intend for its
notice—including the portions covering the unemployment
exemption—to be false or unfair. Indeed, DCS’s adherence
to the DOE form shows that DCS intended to provide
accurate information taken from the relevant regulatory
agency. In this respect, DCS’s actions differ little from debt
collectors who follow safe-harbor language drafted by this
court. See, e.g., Chuway v. Nat’l Action Fin. Servs. Inc., 362
F.3d 944, 949 (7th Cir. 2004); Miller v. McCalla, Raymer,
Padrick, Cobb, Nichols, & Clark, L.L.C., 214 F.3d 872, 876 (7th
Cir. 2000); Bartlett v. Heibl, 128 F.3d 497, 501-02 (7th Cir.
1997). Additionally, the DOE form that DCS was using was
compulsory, not optional, but more on this point below.
  Furthermore, contrary to Harris-Alleyne and Miller’s
assertion, the fact that DCS deliberately used the form and
intentionally sent a personalized version of the form to the
class members does not negate the bona fide error defense.
A debt collector need only show that its FDCPA violation
was unintentional, not that its actions were unintentional.
See Nielsen v. Dickerson, 307 F.3d 623, 641 (7th Cir. 2002)
(debt collector “may avail itself of the bona fide error

8
   The only genuine distinction in the unemployment-exemption
paragraph between the DCS notice and the DOE form is that DCS
filled in the DOE’s “MM/DD/YYYY” with a deadline that was
thirty days from the date DCS printed and dated its notice to each
class member. As indicated in footnote three above, this thirty-
day deadline is in accordance with the DOE form. Furthermore,
the fact that some of DCS’s garnishment notices misstated this
thirty-day period by imposing premature deadline dates is a
matter resolved in the disposition of count one.
12                                    Nos. 04-1074 & 04-1455

defense because it had no intent to violate the FDCPA, al-
though its actions were deliberate”); Lewis v. ACB Bus. Servs.,
Inc., 135 F.3d 389, 402 (6th Cir. 1998) (“The debt collector
must only show that the violation was unintentional, not
that the communication itself was unintentional. To hold
otherwise would effectively negate the bona fide error de-
fense.”). Therefore, DCS has satisfied the first element of
§ 1692k(c).
  Second, if DCS violated the FDCPA, the presumed viola-
tion was the result of a bona fide error. Harris-Alleyne and
Miller complain that the district court erred in treating the
presumed violation and the assumed error as one and the
same. However, they are not one and the same: as indicated
above, the assumed error concerns the allegedly erroneous
explanation of the HEA, while the presumed violation relates
to Harris-Alleyne and Miller’s accusation that DCS’s as-
sumed error caused DCS to violate the FDCPA. The pre-
sumed FDCPA violation was the inclusion of supposedly
false and unfair language about the unemployment exemp-
tion in the garnishment notice. The assumed error, which
led to the presumed violation, was DCS’s supposed misun-
derstanding of what was and was not permissible under the
HEA with respect to the unemployment exemption. In other
words, the assumed error was DCS’s assertion that the
debtor must document the debtor’s eligibility for the
exemption and must do so by a defined date. Therefore, if
DCS did indeed violate the FDCPA, the violation resulted
from a separate and independent error.
   More important, this assumed error was bona fide. That
is, if made, it was an error made in good faith; a genuine
mistake, as opposed to a contrived mistake. See Black’s Law
Dictionary 168 (7th ed. 1999) (defining “bona fide” as “1.
Made in good faith; without fraud” and “2. Sincere; gen-
Nos. 04-1074 & 04-1455                                              13

uine”); see also Edwards v. McCormick, 136 F. Supp. 2d 795,
801 n.8 (S.D. Ohio 2001). If DCS did in fact erroneously
apply the HEA in its garnishment notice as Harris-Alleyne
and Miller allege, it did so because the DOE, the govern-
ment agency invested with regulatory authority under the
HEA, misinterpreted the HEA. DCS’s wholesale adoption of
the DOE’s language regarding the unemployment ex-
emption sufficiently shows that any error by DCS in this
                                                  9
regard was a good faith, genuine, bona fide error. Accord-
ingly, DCS has satisfied § 1692k(c)’s second element.
  Third, DCS employed a procedure reasonably adapted to
avoid the assumed error. An entirely reasonable procedure
to avoid misinterpreting and misapplying a federal statute,
such as the HEA, is to adopt the legal interpretation of the
federal agency charged with regulating under the statute in
question. DCS’s complete reliance on the DOE form dem-
onstrates its reasonable effort to comply with the statute.
  Harris-Alleyne and Miller argue in response that DCS
failed to present proof that it actually relied on the DOE.
DCS filed copies of its garnishment notice and the DOE

9
   Separately, before the district court, Kort argued that only
factual or clerical errors, not legal errors, can serve as the basis for
a bona fide error defense. See Kort, 270 F. Supp. 2d at 1026. As the
district court indicated, courts are divided on whether the bona
fide error defense applies to mistakes of law. See Nielsen, 307 F.3d
at 640-41; Johnson v. Riddle, 305 F.3d 1107, 1121-22 n.14 (10th Cir.
2002); Kort, 270 F. Supp. 2d at 1026. Harris-Alleyne and Miller,
however, have abandoned this argument on appeal. Neverthe-
less, for clarification purposes, without engaging in the mistake-
of-law debate, we note that, because DCS followed the DOE form
verbatim and did not exercise any “legal judgment” of its own,
any mistake by DCS in this case was not mistake of law (i.e., any
misinterpretation of the HEA in this situation was done by the
DOE, not DCS). Jenkins, 124 F.3d at 832.
14                                   Nos. 04-1074 & 04-1455

form with its summary judgment motion. The DCS notice
and the DOE form are identical in all substantive respects—
including the pertinent text concerning the unemployment
exemption as demonstrated above. What further proof is
necessary? Given the fact that the two forms were virtually
identical and the fact that the DOE form was drafted first,
there is no doubt that the text in the DCS notice did not
originate with DCS—unquestionably, it was copied from the
DOE form, which is sufficient to show that DCS relied on
the DOE form in this case.
  Additionally, Harris-Alleyne and Miller contend that DCS
was simply following ISAC’s instructions to use the DOE
form. They then argue that blindly following its client’s
instructions nullifies the conclusion that DCS maintained
procedures reasonably adapted to avoid the assumed error.
While this argument may have merit in some situations in-
volving private clients, it is misguided here. The argument
ignores the fact that ISAC was merely the middleman. The
source of the form, as well as the directive to use the form,
was the DOE, which, again, is the federal agency charged
with regulating under the HEA.
   Furthermore, according to the DOE cover letter for the
DOE form, the DOE form was compulsory. Quite naturally,
therefore, ISAC told DCS to use to the DOE form, and DCS
did so. Theoretically, DCS could have done more to ensure
its notice complied with the HEA. Nevertheless, § 1692k(c)
does not require debt collectors to take every conceivable
precaution to avoid errors; rather, it only requires reason-
able precaution. See Hyman v. Tate, 362 F.3d 965, 968 (7th
Cir. 2004) (“Although [the debt collector] could have done
more . . . , § 1692k(c) only requires collectors to adopt rea-
sonable procedures.”). Here again, adopting the DOE’s legal
interpretation of the HEA unemployment exemption was a
Nos. 04-1074 & 04-1455                                     15

reasonable procedure to avoid an erroneous application of
the exemption. Therefore, DCS has satisfied § 1692k(c)’s
third element.
   To summarize, even if DCS erred and violated the FDCPA
as claimed by Harris-Alleyne and Miller, see supra n.7, DCS
is entitled to the bona fide error defense as a matter of law.
By showing that it adopted the DOE form completely, DCS
has shown that: (1) it did not intentionally violate the FDCPA
(i.e., DCS did not intentionally include false or unfair in-
formation about the HEA unemployment exemption in its
garnishment notice); (2) any such presumed violation re-
sulted from a bona fide error (i.e., if the notice contained
false or unfair information about the exemption, it was the
result of an erroneous application of the HEA derived from
the DOE’s interpretation of the HEA); and (3) it maintained
procedures reasonably adapted to avoid any such assumed
error (i.e., relying on the DOE’s interpretation of the HEA is
a reasonable procedure to avoid misapplying the HEA).
Accordingly, the district court correctly granted DCS sum-
mary judgment on count two.
   Before concluding, we further observe that the handling
of the HEA unemployment exemption in the DOE form, and
thus in the DCS notice, was entirely reasonable and proper.
The HEA is silent on the questions of whether a debtor must
come forward with documentation to substantiate the
debtor’s eligibility for the unemployment exemption and
whether the debtor must do so within a certain time limit.
However, Congress gave the DOE the authority to fill in
gaps in the HEA. See 20 U.S.C. § 1082(a)(1). The DOE’s
language on the unemployment exemption encourages a
speedy and amicable resolution of the dispute, a resolution
that may help the debtor avoid the embarrassment of the
debt collector contacting the debtor’s employer. Moreover,
it is an entirely efficient and common-sense approach to
16                                   Nos. 04-1074 & 04-1455

require the debtor, who is in a better position to know if the
debtor is eligible for the unemployment exemption, to share
that knowledge with the guarantor and its agent and
substantiate the debtor’s eligibility with documentation.
Therefore, given the DOE’s persuasive and sound appli-
cation of the HEA and its specialized experience in such
student loan matters, we would defer to the DOE form in
the context of this case. See United States v. Mead Corp., 533
U.S. 218, 221, 234-35 (2001) (informal guidance from agencies,
such as ruling letters or interpretive forms are afforded de-
ference according to its persuasiveness); Am. Fed’n of Gov’t
Employees, Local 2119 v. Rumsfeld, 262 F.3d 649, 656 (7th Cir.
2001).

                             III.
  DCS’s adherence to the DOE form in its garnishment
notice entitles it to the bona fide error defense, and DCS is
thus insulated from FDCPA liability with respect to its
handling of the HEA unemployment exemption.
                                                  AFFIRMED.
Nos. 04-1074 & 04-1455                                    17

A true Copy:
       Teste:

                         _____________________________
                          Clerk of the United States Court of
                            Appeals for the Seventh Circuit

                  USCA-02-C-0072—1-10-05