ABA, Trade Groups File Amicus Brief on Mortgage Servicing Convenience Fees

ABA and several financial trade organizations filed a "friend of the court" brief with the United States Court of Appeals for the Ninth Circuit rebutting the CFPB’s argument that the collection of convenience fees violate the Fair Debt Collection Practices Act. The CFPB previous filed an amicus brief in the same case arguing that the phrase “permitted by law” under Section 1692f(1) of the FDCPA refers only to amounts that are expressly or affirmatively authorized by law.

The amicus brief filed by ABA and the trade groups maintains that the CFPB’s interpretation is contrary to the plain language of the FDCPA. The groups wrote that there is no basis in the broad language in the section to eliminate the freedom of borrowers and servicers to enter otherwise lawful, enforceable contracts under state law unless a state statute specially authorizes a certain fee for a certain service.

The amicus brief also discusses the importance of expedited payment services to borrowers and the adverse consequences of penalizing mortgage servicers for the development of such services, including reducing the incentive to offer such options, limiting important consumer choices, and deterring future servicing innovations that benefit borrowers