[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 2837 Introduced in Senate (IS)]
106th CONGRESS
2d Session
S. 2837
To amend the Fair Debt Collection Practices Act to reduce the cost of
credit, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 30, 2000
Mr. Craig introduced the following bill; which was read twice and
referred to the Committee on Banking, Housing, and Urban Affairs
_______________________________________________________________________
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 Representatives 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 2000''.
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--
(1) by striking ```communication' means'' and inserting the
following: ```communication'--
``(A) means'';
(2) by striking the period at the end and inserting ``;
and''; and
(3) by adding at the end the following:
``(B) does not include any action taken pursuant
to--
``(i) the Federal Rules of Civil Procedure;
``(ii) in the case of a proceeding in a
State court, the rules of civil procedure
available under the laws of such State; or
``(iii) a nonjudicial foreclosure.''.
SEC. 3. COLLECTION ACTIVITY FOLLOWING INITIAL NOTICE.
Section 809 of the Fair Debt Collection Practices Act (15 U.S.C.
1692g) is amended by adding at the end the following:
``(d) Continuation During Period.--Collection activities and
communications may continue during the 30-day period described in
subsection (a), unless the consumer requests the cessation of such
activities.''.
SEC. 4. LIABILITY FOR NONCOMPLIANCE.
(a) Clarification of Limitation on Class Action 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 Liability.--Section 813(a)(3)
of the Fair Debt Collection Practices Act (15 U.S.C. 1692k(a)(3)) is
amended to read as follows:
``(3) subject to subsection (f), in the case of a
successful action to enforce a liability under paragraph (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
paragraph.''.
(c) Rules Applicable to Certain Actions.--Section 813 of the Fair
Debt Collection Practices Act (15 U.S.C. 1692k) is amended by adding at
the end the following:
``(f) Rules Applicable to Actions Under This Title.--
Notwithstanding any other provision of law, in any action arising under
this title, for purposes of rule 68 of the Federal Rules of Civil
Procedure, the following provisions shall apply:
``(1) Plaintiff's attorney's fees.--Costs shall include
reasonable fees for the plaintiff's attorney.
``(2) Disallowance of certain fees accruing after refusal
of settlement offer.--In accordance with rule 68 of the Federal
Rules of Civil Procedure, if--
``(A) an offer is made by the debt collector to a
consumer bringing an action (including any class action
or series of class actions referred to in subsection
(a)(2)(B)) under this title, and the offer is not
accepted; and
``(B) the amount of the final judgment awarded to
the consumer (or, in the case of a class action or
series of class actions, the total amount awarded to
all class members in such class action or series of
class actions) is less than or equal to the amount of
the offer referred to in subparagraph (A),
the consumer (or the class with regard to a class action or
series of class actions) may not be awarded or otherwise
recover costs for attorney's fees incurred after the date such
offer is rejected.''.
(d) Factors for Consideration.--Section 813(b) of the Fair Debt
Collection Practices Act (15 U.S.C. 1692k(b)) is amended--
(1) in the matter preceding paragraph (1), by striking
``liability in any action'' and inserting ``any award''; and
(2) by striking paragraph (1) and inserting the following:
``(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 the following:
``(c) Bona Fide Errors.--
``(1) In general.--A debt collector may not''; and
(2) by adding at the end the following:
``(2) Reliance on rules of civil procedure.--A debt
collector may not be held liable in any action brought under
this title, if the debt collector shows by a preponderance of
the evidence that the violation resulted from good faith
compliance with--
``(A) the Federal Rules of Civil Procedure;
``(B) in the case of a proceeding in a State court,
the rules of civil procedure available under the laws
of such State; or
``(C) a nonjudicial foreclosure proceeding.''.
SEC. 5. MORTGAGE SERVICERS' REGULATORY BURDEN RELIEF.
(a) In General.--The Fair Debt Collection Practices 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:
``Sec. 818. Mortgage servicer exemption
``(a) Exemption.--Any servicer of federally related mortgage loans
secured by first liens shall be exempt from the requirements of
sections 807(11) and 809 in connection with the collection of any debt
that is a federally related mortgage loan secured by a first lien, if
the servicer is--
``(1) a debt collector; and
``(2) a servicer for whom the collection of delinquent
debts is secondary to the primary function of the servicer of
servicing federally related mortgage loans.
``(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 mortgage loan to a consumer that 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 receive 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 acceleration,
foreclosure, or any other action with respect to a
federally related mortgage loan for which the servicer
provided a notice to the consumer under paragraph
(1)(A) due to the receipt by such servicer of a
qualified validation request from such consumer.
``(C) Receipt and handling of requests.--A servicer
described in paragraph (1) may establish a separate and
exclusive office for the receipt and handling of any
qualified validation request from any consumer under
this subsection 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 first class mail with
prepaid postage.
``(3) Reasonable estimates of third 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 provided
by third parties; and
``(B) constitutes a reasonable estimate of such
costs.
``(c) Definitions.--In this section:
``(1) Federally related mortgage loan.--The term `federally
related mortgage loan' has the meaning given the 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 that--
``(A) includes the name and account number 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 included with
a payment coupon or other payment medium provided by
the servicer.
``(3) Servicer; servicing.--The terms `servicer' and
`servicing' have the meanings given those terms in section 6(i)
of the Real Estate Settlement Procedures Act of 1974.
``(4) Validation statement.--The term `validation
statement' means a statement of--
``(A) the total amount a consumer must pay, as of a
particular date, to bring the consumer's loan current;
and
``(B) the total amount a consumer must pay, as of a
particular date, to satisfy the loan in full.''.
(b) Clerical Amendment.--The table of sections for the Fair Debt
Collection Practices Act (15 U.S.C. 1692 et seq.) is amended--
(1) by redesignating the item relating to section 818 as an
item relating to section 819; and
(2) by inserting after the item relating to section 817 the
following:
``818. Mortgage servicer exemption.''.
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