Last week, the CFPB filed an amicus brief, in conjunction with the FTC, in a case involving collection practices related to time-barred debt (debt for which the statute of limitations has expired). On March 5, 2014, the CFPB filed the amicus brief in Buchanan v. Northland Group Inc., a case on appeal before the Sixth Circuit. The brief urges the Sixth Circuit to overturn the district court’s conclusion that a collection letter that makes no actual or implicit threat of litigation cannot, as a matter of law, violate the Fair Debt Collection Practices Act (FDCPA) prohibition against using false, deceptive, or misleading representations in connection with the collection of a debt.

The CFPB brief argues that, “actual or threatened litigation is not a necessary predicate for an FDCPA violation in the context of time-barred debt.” The CFPB further argues that, “a settlement offer can erroneously lead unsophisticated consumers to believe a debt is enforceable in court even if the offer is unaccompanied by any clearly implied threat of litigation.”

To support these conclusions, the brief makes identical arguments to those made by the CFPB and the FTC in an amicus brief filed last year in Delgado v. Capital Managements Services, LP, et al. In the Delgado case, however, the procedural posture was reversed, and the CFPB sought for the Seventh Circuit to uphold the lower court decision related to the collection of time-barred debt. For more information on the Delgado case, see our blog post here.

The CFPB focus on time-barred debt appears to continue unabated in 2014. The primary debt collection statute, the FDCPA, however, does not directly address time-barred debt. The CFPB’s amicus program was designed to provide the courts with the CFPB’s views on significant consumer financial protection issues and to help ensure that consumer financial protection statutes and regulations are correctly and consistently interpreted by the courts. The CFPB may also tackle issues related to time-barred debt in its FDCPA rulemaking process, which is already underway. For more information on the CFPB’s FDCPA rulemaking, see our blog post here.