NAFCU files amicus brief regarding fees charged by mortgage servicers

NAFCU, along with several other organizations, Tuesday filed an amicus brief with the United States Court of Appeals for the Ninth Circuit arguing that the CFPB’s hard line interpretation of the phrase “permitted by law” in the Fair Debt Collection Practices Act (FDCPA), as explained in the bureau’s amicus brief submitted in the Amy Thomas-Lawson, et al. v. Carrington Mortgage Services LLC. case, should not be so narrowly construed as to include only those fees that are expressly authorized by either the mortgage instrument or a statute.

Plaintiffs in the case argued that the collection of convenience fees violated the FDCPA, state debt collection laws, and breached the borrowers’ mortgage agreement.

The CFPB has argued for the interpretation of the phrase “permitted by law” as “prohibiting fees unless a law expressly authorizes such fees.” The bureau contended that a convenience fee charged by a mortgage servicer, although fully disclosed to the borrower but may not be explicitly in the original contract between the borrow and lender, therefore violated the FDCPA.

 

continue reading »