September 2008

From the editors of CCH’s Banking and Finance publications, this update describes significant developments covered in our products in recent reports, as well as product enhancements.

Past issues of the Banking and Finance Update, can be viewed on the Banking and Finance Web page at: http://business.cch.com/updates/bankingFinance.

If you have questions or comments concerning the information provided below, please contact the Banking and Finance Update editor at Serena.Lynn@ wolterskluwer.com.

Federal Banking Law Reporter

Comprehensive Housing Bill Signed into Law
An analysis of the Housing and Economic Recovery Act of 2008 by John M. Pachkowski, J.D., Federal Banking Law Reporter Editor, is included in Letter No. 2278, Aug. 7, 2008. Despite an earlier veto threat, President Bush signed the Act into law on July 30, 2008. The Act, called by some the "most comprehensive housing legislation in over a generation," is expected to help hundreds of thousands of Americans who are struggling to keep their homes, as well as countless homeowners and communities that already are experiencing the devastating effects of foreclosure. The Act contains comprehensive reforms to the nation's housing sector, including the creation of a strong new regulator for the government-sponsored enterprises (GSEs)—the Federal National Mortgage Association (Fannie Mae), Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal Home Loan Bank system. In addition, the Act includes provisions requested by the Treasury Department intended to restore confidence in the GSEs. Public Law 110-289 is reported at ¶75-113 (ip access user).

OCC Rule Permits a Broader Range of Investments
The Office of the Comptroller of the Currency has issued an interim final rule amending national bank authority to make community development investments. The rule reflects statutory amendments contained in the Housing and Economic Recovery Act of 2008. According to the agency, the law reversed an earlier narrowing of the authority and allows banks again to make investments designed primarily to promote the public welfare, including the welfare of low- and moderate-income communities or families. The change resulted from the removal of the requirement that such investments "benefit primarily" these communities or families. The OCC's notice is at ¶95-363 (ip access user).

Bank Earnings Fall; FDIC May Increase Insurance Premiums
Commercial banks and thrifts insured by the Federal Deposit Insurance Corp. reported net income of only $5 billion in the second quarter of 2008, $31.8 billion less than in last year's second quarter, according to the FDIC. The earnings report was the second lowest since 1991, with only the earnings in the fourth quarter of 2007 being less. According to the FDIC, the main reason for the drop in earnings was increased provisions by banks for loan losses. FDIC Chairman Sheila C. Bair said that the agency will consider a plan to replenish the Deposit Insurance Fund in October that probably will include an increase in insurance premium rates. She added that the agency also will consider changes that will shift the assessment burden farther onto banks that engage in "high-risk behavior." This story appears in Letter No. 2281, Aug. 28, 2008.

Fed Makes Annual Adjustment for Mortgage Loan Disclosures
The Federal Reserve Board has published its annual adjustment of the dollar amount of fees that triggers additional disclosure requirements under the Truth in Lending Act for home mortgage loans that bear rates or fees above a certain amount. The fee-based trigger has been adjusted to $583 for 2009 based on the annual percentage change reflected in the Consumer Price Index that was in effect on June 1, 2008. The Fed notice is reported at ¶95-361 (ip access user).

Subprime Discrimination Suit Against Countrywide to Proceed
Four consumers' claims that Countrywide Bank's pricing policies resulted in illegal racial discrimination have survived a motion to dismiss in the U.S. District Court for the District of Massachusetts. The court's ruling means that if the consumers can prove their factual assertions, the bank, its subsidiaries and two independent retail mortgage lenders could be liable for violations of the Equal Credit Opportunity Act and the Fair Housing Act. The complaint centers on the way in which Countrywide prices its mortgage loans, asserting that African-American borrowers are more likely than white borrowers to receive loans with high annual percentage rates, including subprime loans. Miller v. Countrywide Bank (DCMass) is at ¶101-035 (ip access user).

Fed Survey Finds Tighter Loan Standards and Terms
Lending standards and terms tightened for all types of credit in the second quarter of 2008, according to the Federal Reserve Board's July 2008 Senior Loan Officer Opinion Survey. Standards on commercial and industrial (C&I) loans to large and mid-market firms were tightened by 60 percent of the domestic banks that responded to the survey, and 65 percent of the same banks reported tightening terms for C&I loans to small companies. Even higher percentages of banks reported increased spreads of loan rates over their cost of funds for such loans. However, only 35 percent of U.S. branches and agencies of foreign banks reported having tightened terms on C&I loans. A decline in demand for C&I loans also was reported. Tighter standards for commercial real estate loans were reported by 80 percent of domestic banks and 35 percent of foreign banks. Weaker demand for these loans also was reported. This story appears in Letter No. 2279, Aug. 14, 2008.

Qualified Financial Contracts Recordkeeping Rules Proposed
The Federal Deposit Insurance Corp. has proposed recordkeeping requirements for qualified financial contracts (QFCs) held by insured depository institutions in a troubled condition. QFCs are financial contracts such as securities contracts, commodity contracts, forward contracts, repurchase agreements and swap agreements that, under the Federal Deposit Insurance Act, receive special expedited netting treatment in the event of the depository institution's failure. The FDIC's notice is at ¶95-347 (ip access user).

Money Laundering Provides Ongoing Challenges: Interview
The variety of ways in which money launderers now can infiltrate the financial system provides unique challenges to financial institutions, regulators and Congress, and the problem is likely to become increasingly complex moving forward, according to Debra Geister, director of fraud prevention and compliance solutions for LexisNexis Risk & Information Analytics Group. Money laundering has so permeated society that getting to the source is particularly difficult, Geister said in a July 30, 2008, interview with CCH. "Money launderers are highly motivated, it requires that much more diligence for those of us in the financial services sector," she said. Geister urges financial institutions to think like a money launderer—"you have to learn to think like that to try and stay ahead of the curve, if that's even possible." This story appears in Letter No. 2278, Aug. 7, 2008.

Data Breaches Expected to Continue on Uptrend
In the wake of the recent theft of more than 40 million credit and debit card numbers from leading U.S. retailers, experts say the problem is likely to increase over the near term due to the proliferation of consumer databases and the increasing sophistication of criminals. Tom Harkins, Chief Strategy Officer at Secure Identity Systems and former Vice President of Risk and Security for MasterCard, told CCH that the number of data breaches could double or triple over the next few years. "There's really two types of people—those who've had their identity stolen and those who will have it stolen sometime in the future," Harkins predicts. This story appears in Letter No. 2281, Aug. 28, 2008

Product Enhancements

Housing Reform Act Integrated
The 164-page Housing and Economic Recovery Act, comprised of approximately 350 law amendments is published in full text at ¶75-113 (ip access user) and the amendments that affect federal banking laws have been integrated into the reporter.

Subprime Lending QuickChart Added, Current Developments QuickChart Moved
The Federal Banking Law Reporter on the CCH Internet Research NetWork has been enhanced with a new QuickChart, which brings together information on federal laws, regulations, agency guidance, court opinions and current developments that relate to subprime lending issues. Analysis by CCH editors also is referenced, as are links to the relevant material in the CCH Federal Banking Law Reporter and sources on the Internet.

The Subprime Lending QuickChart presents recent activity by document type with further breakdown by topic, which allows users to narrow review by subject matter. A concise description of each item is provided. Select the areas of interest and QuickCharts will retrieve the information in chart format. Users will be able to quickly find relevant documents and link to the full text. Updates for recent periods (such as seven days or 60 days) can be highlighted in yellow.

The existing Current Developments QuickChart will be moved on Monday, Sept. 8, 2008, to appear under the “News” bar on the CCH Internet Research NetWork Banking tab. Currently, it appears under the “Federal Banking” bar. Placement of the Current Developments QuickChart with other publications under News is intended to reflect usage of the QuickChart as a tool for searching recent rule amendments, proposals, agency guidance and court decisions. The new Subprime Lending QuickChart and the previously issued Federal Banking Topics QuickCharts on Bank Secrecy, which are intended to facilitate topical research, will be found under the Federal Banking bar, along with the CCH federal banking publications.

Consumer Credit Guide

“Bona Fide Error” Defense Under FDCPA Applies to Mistakes of Law
In a case of first impression, the U.S. Court of Appeals for the Sixth Circuit recently held that the “bona fide error” defense under the federal Fair Debt Collection Practices Act (FDCPA) not only applies to factual mistakes—such as procedural or clerical errors—but also applies to mistakes of law. The Sixth Circuit noted that federal district courts have been divided on the issue of whether mistakes of law are included for the “bona fide error” defense. The debtor claimed the mortgage lender’s attorney and law firm violated the FDCPA because the validation notice compelled the debtor to dispute the debt in writing although the FDCPA imposed no such writing requirement. While the Sixth Circuit acknowledged that the FDCPA had been violated, the court ruled the attorney and law firm established a valid “bona fide error” defense under the FDCPA. The court determined that the attorney and law firm properly demonstrated that the error was unintentional, that the FDCPA violation was a result of a bona fide error and, as “debt collectors,” the attorney and law firm maintained procedures reasonably adapted to avoid the error. Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA (6thCir) ¶52,183 (ip access user).

Cell Phone Agreement Not Subject to Iowa Consumer Credit Code
Since the terms of a cell phone subscriber agreement did not provide for the extension of credit to a consumer or require the consumer’s monthly debt to be paid in installments, the arrangement did not qualify as a “consumer credit transaction” under the Iowa Consumer Credit Code. Prior to the expiration of the one-year term established by the cell phone subscriber agreement, the consumer decided to terminate her service. While the agreement provided for cancellation fees upon early termination, the consumer alleged that the cancellation fees she incurred were in violation of the Iowa Consumer Credit Code. The Iowa Supreme Court determined that the cell phone provider was not subject to the Iowa Consumer Credit Code. While the court recognized the agreement called for a credit check and required the consumer to pay for monthly service fees over the course of the one-year period, the arrangement still did not meet the Iowa Code’s definition of a “consumer credit sale” or a “credit transaction.” Anderson v. Nextel Partners, Inc. (IowaSCt) ¶52,180 (ip access user).

State Law Update

Arizona: Legislation aimed at preventing identity theft will allow Arizona consumers to place a security freeze on their credit reports. The freeze prohibits a credit reporting agency from releasing the consumer's credit report without the consumer's permission. The law (Ch. 43) is at Arizona ¶6485 (ip access user) and ¶6488 (ip access user).

Creditors that do not use a consumer credit report in approving an application for an extension of credit will be prohibited from lending money or extending credit unless the creditor takes reasonable steps to verify the borrower's identity and confirm that the application for an extension of credit is not the result of an identity theft. The law (Ch. 46) is at Arizona ¶6488A (ip access user).

Delaware: An amendment to the licensed lenders law will require lenders to ensure that individuals taking out reverse mortgages receive counseling about the loan. The law (Ch. 355) is at Delaware ¶7244 (ip access user).

Maryland: The Commissioner of Financial Regulation has issued an Advisory relating to Maryland's new “ability to repay” residential mortgage lending requirements that were enacted earlier this year as part of legislation aimed at improving the regulation of mortgage industry professionals and reforming lending practices. The Commissioner's Advisory is at Maryland ¶9503 (ip access user).

Missouri: Identity theft protections will allow Missouri consumers to place a security freeze on their credit reports. The legislation establishes procedures for the placement, removal and temporary lifting of a security freeze on a credit report. The law (H.B. 1384) is at Missouri ¶6191 (ip access user) through ¶6194 (ip access user).

Montana: The Department of Administration, Division of Banking and Financial Institutions, has amended a number of its rules pertaining to the regulation of title lenders and adopted several new rules regarding title loan designation, notification to the department, rescinded loans, failure to correct deficiencies, administrative costs, examination fees, required recordkeeping, sale of repossessed property and unfair practices. The rules are at Montana ¶8931(ip access user) through ¶8949 (ip access user).

New York: Mortgage lending reforms target the subprime lending crisis by providing assistance to homeowners currently at risk of losing their homes and establishing further protections to mitigate the possibility of similar crises in the future. The law begins at New York ¶6188 (ip access user).

Debt collection procedures related to identity theft establish when a principal creditor is required to cease collection activities and provides penalties for violations. The law (Ch. 456) begins at New York ¶6315 (ip access user).

Pennsylvania: Mortgage loan reforms enacted in response to the current lending and foreclosure crisis will increase the monetary cap in the Loan Interest and Protection Law from $50,000 to $217,873, which the Department of Banking (DOB) may adjust annually for inflation. The measure also provides the DOB with enforcement authority, in addition to the Attorney General's existing authority. The reforms are part of a multi-bill package developed by the DOB following a 2005 study of residential mortgage foreclosures and lending practices in Pennsylvania. The law begins at Pennsylvania ¶6408 (ip access user).

Smart Charts Highlights

Some of the latest changes reflected in Consumer Credit Smart Charts include:

• Consumer Credit Topics Smart Charts. The Interest-Usury Topics Smart Chart reflects the current monthly state interest rate modifications for 2008.
• The Legislative Developments Smart Charts includes over 90 consumer credit related laws enacted to date during 2008 as well as over 150 archived entries for 2007. The Legislative Developments Smart Chart is updated regularly as legislation is enacted, allowing users to keep up-to-date without waiting for a scheduled Report. Links to legislative summaries and to full text of laws amended, repealed or added are provided. Recent updates include:
  • Delaware: Reverse Mortgages.
  • New York: Mortgage Lending Reforms; Refund Anticipation Loans; Debt Collection Activities Related to Identity Theft.

 

Secured Transactions Guide

Secured Bankruptcy Claim Includes Negative Equity from Trade-In
A creditor that financed the purchase of a new vehicle, which included the negative equity in a vehicle used as a trade-in, held a purchase money security interest (PMSI) in the entire amount borrowed, not just the retail value of the new vehicle. The U.S. Court of Appeals for the Eleventh Circuit concluded that the obligation was fully secured and, in accordance with the "hanging paragraph" of 11 USC §1325(a), could not be bifurcated in a debtor's Chapter 13 bankruptcy plan into secured and unsecured claims. In re Graupner (11thCir) appears at ¶56,159 (ip access).

Lender Not Required to Notify Other Parties of Borrower’s Sale of Collateral
A lender that discussed the sale of a borrower's assets with the borrower but did not foreclose on its collateral or control the actual sale of its collateral was not obligated to provide notice of the sale to other secured parties, according to the U.S. Court of Appeals for the Eighth Circuit. In Minnesota, a secured party may sell or otherwise dispose of collateral following default. Article 9 of the Minnesota UCC requires reasonable notice of the disposition of collateral when the secured party disposes of the collateral. In the instant case, however, the successor sold the assets, not the secured party. Although the lender discussed sale options with the successor, the lender never foreclosed or possessed the assets prior to the sale. The lender had no obligation to notify the bank of the sale. Border State Bank v. AgCountry Farm Credit Services (8thCir) appears at ¶56,158 (ip access).

State Law Update

Illinois: The filing of a UCC-3 continuation statement subject to Article 9 of the Illinois UCC will now be allowed on the last day of maturity of a financing statement prior to the filing lapse date. In addition, a UCC financing statement submitted for a transmitting utility that has been rejected by the filing office may now be resubmitted with proper verification. If accepted, the statement will be given the date of the original filing. Also, the rule relating to public records services has been revised to provide for federal tax liens to be included in the services provided by the filing officer. The rules appear at Illinois ¶1305 (ip access) and ¶1306 (ip access) .

An amendment to the certificate of title provisions authorizes the Illinois Secretary of State to designate on the prescribed form a space where the owner of a vehicle may designate a beneficiary, to whom ownership of the vehicle will pass in the event of the owner's death. The law also amends the specific certificate of title form requirements to provide for that space. The law appears at Illinois ¶1097 (ip access) and ¶1100 (ip access) .

New York: The New York Lien Law has been amended to provide that before a sale of personal property to satisfy a lien can take place, the lienor must serve notice on the owner of the property, including a motor vehicle that is valued at $500 or less, by mailing the notice to the owner at his or her last known place of residence or other alternative locations. The notice may also be sent by certified mail, return receipt requested. The law appears at New York ¶1119B (ip access) and ¶1119D (ip access).

Oregon: The Oregon UCC Article 9 regulations have been updated to correspond to the model regulations issued by the International Association of Commercial Administrators and the regulations adopted in other states. Among the changes are updated provisions relating to UCC document delivery, search request delivery, methods of payment, summaries of records and the fees for summaries of records. The requirements for both individual debtor name and organization debtor name searches have been revised, as have the requirements for debtor names involved in estates. In addition, the general requirements for public inspection of records have been revised, as have the requirements relating to search requests, including the optional information that may be included in search requests. Finally, the rules applicable to search requests and search responses have also been updated. The regulations begin at Oregon ¶1401 (ip access).

Financial Privacy Law Guide

Telemarketing Sales Rule Amendments Limit Prerecorded Calls
Final amendments to the Telemarketing Sales Rule (TSR) bar telemarketing calls that deliver prerecorded messages, unless a consumer previously has agreed to accept such calls from the seller, and modify the method of calculating the maximum permissible level of “call abandonment.” The amendments will not affect “informational” prerecorded messages, such as airline flight notifications or service appointments. These calls are not covered by the TSR because they do not attempt to sell the called party any goods or services. A story on the amendments appears in Privacy Extra, Aug. 29, 2008, and the final rule will be reproduced in an upcoming Report.

“Adversely Affected” ISP Granted Standing for CAN-SPAM Private Action
An Internet service provider (ISP) has been allowed to pursue an action against a sender of allegedly deceptive commercial e-mails in violation of the Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM) Act, a federal district court has ruled. Allegations that the ISP suffered increased costs to investigate and process deceptive commercial e-mails were sufficient to establish that it was “adversely affected” by violations of the Act and had the statutory standing required to bring a private action under the Act. Asis Internet Services v. Active Response Group (NDCal) appears at ¶100-394 (ip access user).

“May” Is Sufficient for On-Screen Notice of ATM Fee
An automated teller machine’s on-screen notice that a fee “may” be charged when a fee “will” be charged is sufficient to satisfy the notice requirements of the Electronic Fund Transfer Act if the notice is coupled with a more definite requirement that a user press “yes” to accept the charge, the U.S. Court of Appeals for the Sixth Circuit has held. The court determined that it was clear that the bank’s on-screen notice effectively notified the consumer that it would charge a fee for the transaction. A story on Clemmer v. Key Bank National Association (6thCir) appears in Privacy Extra, Aug. 29, 2008, and the case will be reproduced in an upcoming Report.

State Law Update

California: Amendments to California's security freeze law will allow a consumer to request the placement of a security freeze by regular mail and require a consumer credit reporting agency to place a freeze within three business days of receiving a request. Currently, a request must be made by certified mail, and an agency is allowed up to five business days after receiving a request to place a freeze. The measure also reduces to $5 the fee that may be charged to a consumer for each placement, removal or temporary lifting of a freeze if the consumer is 65 years of age or older. All other consumers, other than identity theft victims, may be charged a fee of no more than $10 for each of these services. In addition, the measure makes certain changes to the written summary of rights that a consumer reporting agency is required to provide a consumer in specified circumstances. A story on A.B. 372, Ch. 151 appears in Report No. 86, Aug. 13, 2008, and the law will be reproduced in an upcoming Report.

Louisiana: Louisiana identity theft law provides for criminal penalties depending on the value of the thing taken and for enhanced penalties when the victim is under the age of 17 or 60 years or older. The penalty for repeat offenses varied, depending on the age of the victim. An amendment to the law provides that any offender, upon a third or subsequent conviction of identity theft, will be imprisoned, with or without hard labor, for not more than 10 years, fined not more than $20,000, or both. A story on H.B. 654, Act 495 appears in Privacy Extra, Aug. 29, 2008, and the law will be reproduced in an upcoming Report.

Bankruptcy Law Reporter

Creditors Entitled to Postpetition Interest on 910 Claims
A bankruptcy court erred when it determined that a so-called 910 claim was not entitled to the payment of postpetition interest. The Eleventh Circuit agreed with the majority of courts that have ruled that the hanging paragraph of Sec. 1325(a) meant only that 910 claims could not be bifurcated into secured and unsecured portions and that such claims had to be treated as fully secured. The court fully adopted a recent Tenth Circuit opinion and found that 910 claims were fully secured and that creditors were entitled to interest calculated to ensure they received the present value of their claims. Dean (11thCir) is at ¶81,294 (ip access user)

Undue Hardship Determinations Ripe Well in Advance of Plan Completion
A Chapter 13 debtor was permitted to seek an undue hardship determination substantially in advance of the time that she completed payments under her Chapter 13 plan. Prudential ripeness considerations did not warrant taking the undue hardship determination away from the bankruptcy court at the time when its resolution could be integral to successful completion of the plan. Coleman (9thCir) is at ¶81,288 (ip access user)

Individual Retirement Plans Guide

Couple Liable for Additional Tax on Early Distribution
A married couple who used an early distribution from the wife's qualified retirement plan to pay unreimbursed moving and living costs incurred in connection with the husband's job were required to pay the Code Sec. 72(t) 10-percent additional tax on the withdrawal. The husband was on active duty in the U.S. Army while the couple lived in Texas. Subsequently, the husband was ordered to move to Hawaii. The wife withdrew an amount from her qualified retirement plan to pay the unreimbursed moving costs and unreimbursed living expenses (until they were provided permanent housing by the military). The couple reported the distribution on their tax return, but they did not pay any additional tax on the amount. Despite the financial hardship imposed by the husband's military service and relocation, the court ruled that none of the Code Sec. 72(t)(2) exceptions to the imposition of the additional tax applied. Carder v. Commissioner is reported at ¶10,331 (ip access user).

Hot Topic of the Month

This month’s Hot Topic of the Month is debt collection. The federal Fair Debt Collection Practices Act (FDCPA) regulates the collection activities of persons, including attorneys, who regularly collect or attempt to collect debts. The Act generally prohibits any harassing or abusive conduct and the use of false or misleading representations or unfair practices in the collection of debts. The law imposes specified affirmative obligations on the debt collector, including a requirement that the debt collector notify the consumer of his or her right to dispute the debt. Collection agency activities and licensing requirements also are governed by state law. Coverage of both federal and state requirements is provided by the CCH Consumer Credit Guide.

Although the Federal Trade Commission (FTC) is the primary federal enforcement agency for the FDCPA, the federal banking regulators enforce the FDCPA for the financial institutions that they supervise. Information on supervision of bank compliance with FDCPA is covered in the CCH Federal Banking Law Reporter.

Case Law continues to evolve, analyzing liability issues and the acceptability of various debt collector practices.

• Although an attorney notifying a debtor of a foreclosure on her home erroneously stated that the mortgage debt must be disputed in writing, the attorney was protected from liability under the FDCPA by the bona fide error defense. The court held that the bona fide error defense not only applies to factual mistakes—such as procedural or clerical errors—but also applies to mistakes of law, an issue that has divided courts. The mistake as to the written-dispute requirement was unintentional and the law firm demonstrated that they employ specific procedures to comply with the FDCPA. Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA (6thCir) Consumer Credit Guide Report No. 1049 (Aug. 26, 2008), ¶52,183 (ip access user).
• A debt collector that threatened to sue a consumer violated the Act if the consumer was not given the notices required by the FDCPA. The court's concern was an absence of proof that the debt collector had given the consumer the notice of his right to dispute the debt and demand validation. If that notice had not been given, the debt collector legally could not sue. However, the court rejected the consumer's claim that the debt collectors had a duty to notify consumer reporting agencies that he had disputed the debt. Wilhelm v. Credico (8thCir), Consumer Credit Guide Report No. 1037 (March 11, 2008), ¶52,153 (ip access user).

State lawmakers also are addressing emerging debt collection issues.

• New York debt collection procedures related to identity theft establish when a principal creditor is required to cease collection activities and provides penalties for violations. Consumer Credit Guide Report No. 1049 (Aug. 26, 2008), beginning at NY ¶6315 (ip access user).
• Changes to the Illinois Collection Agency Act attempt to provide Illinois consumers greater protections from abusive debt collection practices. In addition to creating a dispute procedure for victims of identity theft, the legislation updates Illinois law so that it more closely resembles the Federal Fair Debt Collection Practices Act. The measure harmonizes state law with federal law by: providing that a debt collector must validate the debt upon request of the consumer; requiring a debt collector to cease communication upon the consumer's written request; and expanding the definition of "debt collector" to include the rapidly growing number of debt buyers in the industry. Consumer Credit Guide Report No. 1033 (Jan. 15, 2008), beginning at IL ¶6053 (ip access user).

In response to questions about the applicability of the FDCPA, the FTC issues informal opinion letters to answer questions about the Act.

• The FDCPA does not prohibit a debt collector in the foreclosure context from communicating with consumers regarding possible settlement options that may assist consumers to avoid foreclosure. The FTC’s advisory opinion responded to an inquiry from USFN, formerly known as the U.S. Foreclosure Network, the nation's largest not-for-profit association of foreclosure law firms and trustees, asking whether debt collectors violate the Act if they communicate with consumers regarding possible foreclosure settlement options in initial or subsequent contacts with the consumers. Consumer Credit Guide Report No. 1039 (April 8, 2008), ¶21,406 (ip access user).

Because the CCH explanation for each state is arranged on a uniform plan of topics and paragraph numbers in the Consumer Credit Guide, the explanation for debt collection is at the same paragraph number in every state division (¶4330). The scheme facilitates comparisons of differing state requirements. Licensing requirements and prohibitions against specific types of misconduct are detailed in the state explanations.

An explanation of the federal Fair Debt Collection Practices Act begins at ¶20,001 (ip access user) in the Consumer Credit Guide. The text of the Act begins at ¶21,001 (ip access user).

Examination procedures by the Office of the Comptroller of the Currency, Federal Reserve Board and Federal Deposit Insurance Corp., to determine compliance with FDCPA requirements by banks, are detailed in Federal Banking Law Reporter Agency Handbooks and Manuals. For example, a section on Credit-Related Regulations and Statutes in the Federal Reserve Board’s Consumer Compliance Handbook contains a chapter on FDCPA.