Massachusetts Attorney General's COVID-19 Debt Collection Regulation Faces Legal Challenge

• Published date: 11 May 2020
• Author: Mr Anthony E. DiResta, Jeremy M. Sternberg and David L. Haller
• Subject Matter: Consumer Protection, Media, Telecoms, IT, Entertainment, Coronavirus (COVID-19), Mobile & Cable Communications, Dodd-Frank, Consumer Protection Act, Financing, Operational Impacts and Strategy
• Law Firm: Holland & Knight

• ACA International (ACA), the Association of Credit and Collection Professionals, filed a complaint on April 20, 2020, in the U.S. District Court for the District of Massachusetts challenging the validity of the recently issued Massachusetts debt collection regulation, 940 CMR 35:00, Unfair and Deceptive Debt Collection Practices During the State of Emergency Caused by COVID-19.
• ACA is also seeking a temporary restraining order and preliminarily injunction enjoining enforcement of the regulation until the court has an opportunity to rule on its validity.
• The lawsuit could have significant implications for creditors and debt collection professionals who do business with Massachusetts residents and for other states who may be contemplating issuing similar debt collection regulations during this and future crises.

ACA International (ACA), the Association of Credit and Collection Professionals, filed a complaint on April 20, 2020, in the U.S. District Court for the District of Massachusetts challenging the validity of the recently issued Massachusetts debt collection regulation, 940 CMR 35:00, Unfair and Deceptive Debt Collection Practices During the State of Emergency Caused by COVID-19. In addition, ACA was seeking a temporary restraining order and preliminarily injunction enjoining enforcement of the regulation until the court has an opportunity to rule on its validity. On April 21, 2020, U.S. District Judge Richard Stearns issued an order granting ACA's request for an expedited briefing schedule, which will require Massachusetts Attorney General Maura Healey to respond by May 1, 2020. And on April 24, 2020, Judge Stearns issued an order setting a hearing on ACA's motion for a temporary restraining order for April 29, 2020. The lawsuit could have significant implications for creditors and debt collection professionals who do business with Massachusetts residents and for other states who may be contemplating issuing similar debt collection regulations during this and future crises.

The Regulation

The regulation that the Massachusetts Attorney General announced on March 27, 2020, contains two provisions that ACA finds particularly objectionable.

Section 35.04

The first provision, 940 CMR 35.04 (Section 35.04), provides that "[f]or the ninety (90) days following the effective date of this regulation or until the State of Emergency Period expires, whichever occurs first, it shall be an unfair or deceptive act or practice for any debt collector to initiate a communication with any debtor via telephone, either in person or by recorded audio message to the debtor's...