There is a confluence of unfair debt collection, federalism and judicial restraint with connections to Colorado that provides an optimistic view of all three. At the U.S. Supreme Court, Justice Gorsuch, a Colorado native, authored a unanimous opinion on the definition of "debt collector" in the 1977 federal Fair Debt Collection Practices Act. Enacted to prevent harassment and abusive behavior by debt collectors the statute has been side-stepped by the debt collection industry. Companies are now selling portfolios of written-off or defaulted debt to collection companies, often for pennies on the dollar. Once these debts have been purchased the new owner begins harassing the debtors to pay up.
Several people in Maryland who defaulted on car loans sued Santander Consumer USA, who purchased their debts from their original lender, CitiFinancial. The debtors complained of debt collection tactics that violated federal law. The Supreme Court Justices unanimously agreed that the federal law only covers businesses that collect debts "for another" because that's what the statute says. The Court ruled that by purchasing the debt the company is collecting for itself, not another. Justice Gorsuch wrote "Constant competition between constable and quarry, regulator and regulated, can come as no surprise in our changing world. But neither should the proper role of the judiciary in that process - to apply, not amend, the work of the people's representatives."
This leaves consumers at the mercy of predatory debt collectors who evade the letter of the law by buying up debts from someone else, at least at the federal level. Justice Gorsuch points out that if the quarry has changed tactics it is up to Congress to amend the law.
Here is where federalism comes into play: In Colorado Gov. John Hickenlooper just signed Senate Bill 216 into law, which does for Coloradans exactly what Justice Gorsuch suggests Congress do for everyone else.
Colorado's version of the federal law now defines a "debt buyer" as "a person who engages in the business of purchasing delinquent or defaulted debt for collection purposes, whether it collects the debt itself, hires a third party for collection, or hires an attorney for litigation in order to collect the debt. Debt buyers are collection agencies for the purposes of this Article 14." This cuts off the weaseling around the intent of the law here in Colorado, protecting Colorado consumers from abusive and predatory debt collection practices.
Congress need do no more than adopt Colorado's definition of "debt buyer" and put it in the federal law to cure the fault that the Supreme Court wisely left in place.
Why was it wise for the Supreme Court to leave such a gaping loophole in the law? Because it's not the role of the judiciary to close such loopholes, that's the job of Congress, and the Supreme Court unanimously took this opportunity to make that crystal clear.
The importance of this ruling cannot be understated. It is a direct shot across the bow of the liberal activist judiciary who have been doing exactly what the Supreme Court says is beyond their authority: amending the work of the people's representatives instead of just applying it.
Nowhere is this more true than in the repeated arrogations of legislative power by the federal judiciary in its interference with President Trump's executive orders regarding immigration. President Trump is exercising authority expressly granted to the office of the president by the people's representatives in Congress decades ago.
In their liberal zeal and distaste for President Trump, judicial insurrectionists in the 4th, 9th and 10th Federal Circuit Courts of Appeal have been acting beyond their lawful authority in ignoring laws duly enacted by Congress that they are sworn to uphold.
This unanimous Supreme Court ruling in a seemingly unrelated matter is actually one of the most important and decisive rulings against judicial activism in more than 100 years, and demonstrates just how determined the Supreme Court is to rein in judges who forget their place and their proper judicial authority.
It also bodes ill for the injunctions against the president's statutory authority to deny immigration to any group he deems it necessary to exclude in order to protect America against its enemies.
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