[Federal Register Volume 63, Number 77 (Wednesday, April 22, 1998)]
[Proposed Rules]
[Pages 19859-19861]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-10699]
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FEDERAL TRADE COMMISSION
16 CFR Part 901
Request for Comments Concerning Procedures for State Application
for Exemption From the Fair Debt Collection Practices Act
AGENCY: Federal Trade Commission.
ACTION: Request for public comments.
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SUMMARY: The Federal Trade Commission (``Commission'') requests public
comments about the overall costs and benefits and the continuing needs
for its Procedures for State Application for Exemption from the
Provisions of the Fair Debt Collection Practices Act (``FDCPA''),
hereinafter known as ``Procedures.''
DATES: Written comments will be accepted until June 22, 1998.
ADDRESSES: Comments should be directed to: Secretary, Federal Trade
Commission, Room H-159, Sixth Street and Pennsylvania Ave., N.W.,
Washington, D.C. 20580. Comments should be identified as ``Procedures
for Exemption from FDCPA, 16 CFR Part 901--Comment.''
FOR FURTHER INFORMATION CONTACT:
John F. LeFevre, Attorney, Federal Trade Commission, Washington, D.C.
20580, telephone number (202) 326-3209 or Tom Kane, Attorney, Federal
Trade Commission, Washington, D.C. 20580, telephone number (202) 326-
2304, E-mail [[email protected]].
SUPPLEMENTARY INFORMATION:
I. Background
A. The Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act, 15 U.S.C. Sec. 1691 et seq.
(``FDCPA''), prohibits a number of deceptive, unfair and abusive
practices by third party debt collectors. Section 817 of the FDCPA
requires that the Commission exempt from its requirements ``any class
of debt collection practices within any state if the Commission
determines that under the law of the state, the class of debt
collection practices is subject to requirements substantially similar
to those imposed by [the FDCPA], and that there is adequate provision
for enforcement.'' The Commission has received one application for
exemption from Sections 803-812 of the FDCPA from the State of Maine
for debt collection practices conducted within that State and granted
that exemption.\1\
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\1\ Notice of Maine Exemption from the Fair Debt Collection
Practices Act, 60 Fed. Reg. 68173 (December 27, 1995).
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The FDCPA prohibits debt collectors from using false or misleading
statements, harassing or abusive conduct or any unfair methods to
collect debts. Among the practices which are specifically prohibited
are making false threats to coerce payment (such as false threats of
suit); using deceptive collection notices that falsely appear to be
from an attorney or court; and engaging in any sort of harassment, such
as threatening violence, using profanity and obscenities, or making
continuous phone calls. The FDCPA also restricts the extent to which
debt collectors may call a consumer at work and prohibits them from
making calls to consumers
[[Page 19860]]
very early in the morning or late at night. With a few narrow
exceptions, it prohibits collectors from contacting third parties and
revealing the existence of a consumer's debt. In addition, the FDCPA
prohibits collectors from adding charges to a debt unless the consumer
involved agrees to them or they are permitted by law, and from filing
suit against a consumer outside of the district of the consumer's
residence or where the contract creating the debt was signed.
Under the FDCPA, if a consumer disputes the debt in writing, the
collector is required to stop all collection efforts until the debt is
verified. The FDCPA also states that if the consumer demands in writing
that the debt collector cease all further collection efforts, the debt
collector must comply even if the debt is valid. Finally, the FDCPA
gives a consumer the right to bring suit against a debt collector in
any court for violations of the FDCPA, and, if successful, to receive
actual damages and additional damages up to $1,000, as well as costs
and attorney's fees.
The FDCPA is enforced primarily by the Federal Trade Commission. A
violation of the FDCPA is deemed an unfair or deceptive practice in
violation of the Federal Trade Commission Act. All of the functions and
powers of the Federal Trade Commission Act are available to the
Commission to enforce compliance with the FDCPA. The Commission may
enforce the provisions of the FDCPA in federal court, seeking civil
penalties and injunctive relief, as appropriate.
B. The Procedures
The Commission promulgated procedures in 1979 for state
applications for exemption from the provisions of the FDCPA, which are
published in 16 CFR 901 (1995) (``Procedures''). Section 901.2 of the
Procedures provides that any state may apply to the Commission for a
determination that, under the laws of that State, (1) any class of debt
collection practices within that State is subject to requirements that
are substantially similar to, or provide greater protection for
consumers than, those imposed under Sections 803 through 812 of the
FDCPA; and (2) there is adequate provision for state enforcement of
such requirements. Section 901.4 of the Procedures describes the
criteria for making the determination. Section 901.4(a) requires that
(1) the definitions and rules of construction in the state law import
the same meaning and have the same application as those prescribed by
the FDCPA; (2) debt collectors provide all the applicable notifications
under the state law that are required by the FDCPA; (3) debt collectors
under the state law take all affirmative actions and abide by
obligations substantially similar to, or more extensive than, those
prescribed by the FDCPA; (4) debt collectors under the state law abide
by the same or more stringent prohibitions as are prescribed by the
FDCPA; (5) obligations and responsibilities imposed on consumers under
the state law are no more costly, lengthy, or burdensome than
corresponding obligations or responsibilities imposed on consumers by
the FDCPA; and (6) consumers' rights and protections under the state
law are substantially similar to, or more favorable than, those
provided by the FDCPA. Section 901.4(b) requires that the Commission
consider (1) the facilities, personnel and funding devoted to
administrative enforcement of the state law; (2) provisions in the
state law for civil liability for actions brought in the private sector
as compared with Section 813 of the FDCPA; and (3) the statute of
limitations for civil liability in the state law (for actions brought
in the private sector) which should be substantially similar or longer
than that in the FDCPA. The Commission must consider each provision of
the state law in comparison with each corresponding provision in
Sections 803 through 812 of the FDCPA, and not the state law as a whole
in comparison with the FDCPA as a whole.
Section 901.3 of the Procedures requires that an application be
accompanied by a variety of documents including (1) the state law; (2)
a comparison of the provisions of the state law with various sections
of the FDCPA; (3) a copy of the full text of the law that provides for
its enforcement; (4) a comparison of provisions of the law that
provides for enforcement with the provisions of Section 814 of the
FDCPA; and (5) a statement identifying the state office designated to
administer the state law, along with a description of the ability of
that office to effectively administer the statute. If an application is
filed in accordance with the Procedures, Section 901.5 states that the
filing shall be published in the Federal Register. Section 901.6
provides that the Commission may grant an exemption under the
provisions of the Procedures.
II. Regulatory Review Program
The Commission has determined to review all current Commission
regulations periodically. These reviews seek information about the
costs and benefits of the Commission's regulations and their regulatory
and economic impact. The information obtained assists the Commission in
identifying regulations that warrant modification or rescission.
Therefore, the Commission solicits comments on, among other things, the
economic impact of and the continuing need for the Procedures; possible
conflict between the Procedures and state, local, or other federal
laws; and the effect on the Procedures of any technological, economic,
or other industry changes.
III. Request for Comment
The Commission solicits written public comments on the following
questions:
(1) Is there a continuing need for the Procedures?
(a) What benefits have the Procedures provided to consumers covered
by the FDCPA?
(b) Have the Procedures imposed costs on consumers?
(2) What changes, if any, should be made to the Procedures to
increase the benefits of the Procedures to consumers covered by the
FDCPA?
(a) How would these changes affect the benefits to consumers
covered by the FDCPA?
(b) How would these changes affect the costs the Procedures impose
on states considering applying for exemption?
(3) What significant burdens or costs, including costs of
compliance, have the Procedures imposed on any state that has
considered applying for exemption, or that has actually applied for
exemption?
(a) Have the Procedures provided benefits to such states? If so,
what benefits?
(4) What changes, if any, should be made to the Procedures to
reduce the burdens or costs imposed on states considering applying for
an exemption?
(a) How would these changes affect the benefits provided by the
Procedures?
(5) Do the Procedures overlap or conflict with other federal,
state, or local laws or regulations?
(6) Since the Procedures were issued, what effects, if any, have
changes in new technology, such as the Internet or E-mail, or changes
in other economic conditions, had on the Procedures?
(7) Section 901.4 of the Procedures requires that the Commission
compare civil liability provisions of private suits in the state law
and those contained in Section 813 of the FDCPA, but Section 901.6(d)
prohibits the Commission from exempting any state from the provision of
Section 813. Should Section 901.4 be changed to remove the requirement
that civil liability provisions in the state law
[[Page 19861]]
and those contained in Section 813 of the FDCPA be compared?
(8) Are there any other changes that should be made to the
Procedures? If so, please specify and state reasons for the changes.
Lists of Subjects in 16 CFR Part 901
Fair Debt Collection Practices Act.
Authority: 15 U.S.C. 41-58.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 98-10699 Filed 4-21-98; 8:45 am]
BILLING CODE 6750-01-M