Consumer Crossroads: Where Financial Services and Litigation Intersect

Yesterday, a federal court granted ACA International's request for a temporary restraining order of the Massachusetts Attorney General's emergency regulations prohibiting debt collection calls and enforcement actions during the COVID-19 pandemic.

On May 1, 2020, U.S. District Court for the District of Massachusetts Judge Richard Stearns heard oral arguments in ACA International's suit to halt the emergency debt collection regulations enacted in Massachusetts, which included a request for a temporary restraining order. In response to ACA's said request, Stearns expressed particular interest in whether the regulations constitute an improper ban on commercial speech under the First Amendment, as well as AG Maura Healey's argument that the federal court does not have jurisdiction to strike down the regulations under the Eleventh Amendment.

We recently reported on Massachusetts Attorney General Maura Healey's implementation of temporary regulations halting collection of debt from Massachusetts' consumers in the wake of the COVID-19 crisis. With certain exemptions, the regulations declare the performance of many regular debt collection activities—including placing telephone calls to debtors or initiating collection actions—an unfair or deceptive practice under the Massachusetts Consumer Protection Act. The emergency regulations apply until June 25, 2020, or until the end of Massachusetts' state of emergency, if longer. Now, a leading industry group has sued the Attorney General to enjoin immediate enforcement and to strike down the regulations.

From March 27 through June 25, 2020—or until the end of Massachusetts' state of emergency—Attorney General Maura Healey has implemented temporary regulations on the collection of debt from Massachusetts consumers, which supplements existing regulations codified at 940 CMR 7.00. Important exemptions apply, including attempts to collect a debt which is owing as a result of a loan secured by a mortgage on real property.