Earlier this month, we discussed the lawsuit filed by ACA International, LLC and Collection Bureau Services, Inc. in the U.S. District Court for the District of Columbia against the Consumer Financial Protection Bureau (CFPB or Bureau) and Director Rohit Chopra. The lawsuit challenges the CFPB’s October 1, 2024 advisory opinion on medical debt collection practices. The plaintiffs are seeking an order vacating the advisory opinion and a stay of the effective date pending the conclusion of the case.

Yesterday, a joint status report was filed in the case wherein the CFPB agreed to extend the effective date of the advisory opinion from the original date of December 3, 2024, to January 2, 2025. This extension allows additional time for the court to rule on the pending motions for a temporary restraining order and preliminary injunction.

The advisory opinion specifies that debt collectors would be strictly liable under the Fair Debt Collection Practices Act and Regulation F for engaging in certain practices when collecting medical bills, such as collecting amounts not owed, collecting amounts above permitted limits, and misrepresenting the legal status of the debt. The lawsuit challenges the CFPB’s advisory opinion on several grounds, including: The CFPB lacks the statutory authority to issue the advisory opinion; The CFPB bypassed the Administrative Procedure Act by not engaging in the required notice-and-comment rulemaking process; The advisory opinion imposes undue burdens on debt collectors, requiring extensive validations and audits of medical debts; and The CFPB’s funding mechanism is unconstitutional.

The joint status report filed yesterday outlines the revised briefing schedule for the motions for a temporary restraining order and preliminary injunction:

  • November 26, 2024: defendants’ combined opposition due;
  • December 2, 2024: plaintiffs’ reply due; and
  • December 6 or December 9, 2024: hearing, if required.

In the joint status report, the CFPB maintained its position that the advisory opinion does not create any binding legal obligations or new obligations that plaintiffs or their members will need to comply with as of the applicable date. However, the CFPB conceded that the extension to January 2, 2025, provides additional time for the court to consider the pending motions and for the parties to prepare their arguments. The CFPB committed to promptly posting a notice revising the applicable date on its website and publishing that notice in the Federal Register.

Troutman Pepper will continue to monitor developments in this litigation and provide updates as they become available.