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Collection Actions: 11.6.3.1 Application of the ECOA to Court Debt
Unlike Title VI,506 the Equal Credit Opportunity Act (ECOA) provides for a private right of action not only for disparate treatment on the basis of race, color, religion, national origin, sex, marital status, or age, but also for practices that have a disparate impact on those bases.507 Notably, the ECOA also provides a private right of action to challenge disparate treatment or impact on the basis that a consumer’s applicant’s income derives from a public assistance program.
Collection Actions: 11.6.3.2.1 Overview
Courts assessing lending discrimination claims have generally adopted the burden shifting and evidentiary framework used in employment discrimination cases.518 To make out a prima facie case of disparate impact, an ECOA plaintiff must: (1) identify a specific, facially neutral policy or practice adopted by the defendant; (2) allege a disparate impact on a protected group; and (3) show a causal relationship between the challenged policy or practice and the alleged disparate impact.519 If the
Collection Actions: 11.6.3.2.2 Identifying a defendant, policy, and causation
The first step in setting out an ECOA disparate impact claim is identifying the actor and the policy that cause the discriminatory harm. “It is not enough to simply allege that there is a disparate impact on [consumers], or point to a generalized policy that leads to such an impact. Rather, the [plaintiff] is responsible for isolating and identifying the specific . . . practices that are allegedly responsible for any observed statistical disparities.”521
Collection Actions: 11.6.3.2.3 Shifting the burden
Once the plaintiff sets out a prima facie case of disparate impact, the burden shifts to the defendant to establish “that the challenged practice is necessary to achieve one or more substantial, legitimate, nondiscriminatory interests of the respondent or defendant.”526 The analogous test in the employment discrimination context requires that employers demonstrate both business necessity and job-relatedness.527 In the ECOA context, then, creditors should have to demonstrate both necessity an
Collection Actions: 11.6.3.3 Examples of ECOA Criminal Justice Debt Claims
The following illustrates the types of criminal justice debt practices that might give rise to ECOA claims. Consider when wage earners have an easier time accessing favorable payment plans and avoiding harsh collection tactics than do those whose earnings are derived primarily from public benefits, or when those who receive income solely from public benefits are not eligible for payment plans.
Collection Actions: 11.6.4.1 Application of FDCPA Substantive Requirements to Criminal Justice Debt
The Fair Debt Collection Practices Act (FDCPA) extensively regulates the collection of debts and provides private remedies for Act violations.538 As described in the next two subsections, application of the FDCPA to criminal justice debt must contend with whether the Act applies to parties involved in the collection of government debt and whether criminal justice debt falls within the scope of “debt” covered by the Act.
Collection Actions: 11.6.4.2 Actors Covered by the FDCPA
The FDCPA does not apply to original creditors or to “any officer or employee of the United States or any State to the extent that collecting or attempting to collect any debt is in the performance of his official duties.”546 The Act does, however, apply to private, third-party debt collectors, even when expressly authorized by law—or contracted by government officials—to serve as debt collectors.547
Collection Actions: 11.6.4.3 Debts Covered by the FDCPA
The FDCPA applies to criminal justice debt only if that debt meets the Act’s definition of “debt.”551 The FDCPA defines “debt” as a consumer’s obligation to pay money arising out of a “transaction . . .
Collection Actions: 11.6.5 Fair Credit Reporting Act
One of the potential adverse consequences of criminal justice debt is that both the debt and its nonpayment might be reported to a consumer reporting agency (CRA), though the legal landscape has been changing. The Fair Credit Reporting Act (FCRA) regulates consumer rights in this area (as to the practices of CRAs) and those who furnish or use information from the CRAs.
Collection Actions: 11.6.7.2.1 Overview
When an act by a state or local official is covered by judicial immunity, the official is completely immune from suit for damages, no matter how egregious the misconduct. Judicial immunity also limits Civil Rights Act section 1983 claims against judges for injunctive relief arising out of actions taken in their judicial capacity.598
Collection Actions: 11.6.7.2.2 Specific immunity considerations for criminal justice debt litigation
To avoid running into judicial immunity problems in criminal justice debt litigation, advocates should identify court practices that are the result of policies or widespread custom and not simply the result of decisions by individual judges in individual cases. Suits based on these policies and practices are unlikely to chill judicial actors from exercising their discretion in particular cases.
Collection Actions: 11.6.7.3.1 Younger abstention
Younger abstention limits federal courts from intervening in ongoing state court proceedings.621 Younger abstention clearly applies to ongoing state criminal prosecutions.622 It also applies to certain civil enforcement proceedings that are akin to criminal prosecution in important respects and pending civil proceedings involving certain orders uniquely in furtherance of the state courts’ ability to perform their judicial functions.62
Collection Actions: 11.6.7.3.2 Heck v. Humphrey
The Supreme Court decision of Heck v.
Collection Actions: 11.6.7.3.3 Rooker-Feldman
The Rooker-Feldman doctrine, which is a matter of jurisdiction, bars federal district courts from modifying or reversing state court judgments.633 A federal court lacks jurisdiction only when the losing party in a state court action seeks “what in substance would be appellate review of the state judgment”634 or when the plaintiff’s injury was caused by the state court’s ruling and the plaintiff seeks relief that would undo that judgment.635
Collection Actions: 11.7.2 Major Tenant Screening Consumer Reporting Agencies (CRAs)
The Consumer Financial Protection Bureau (CFPB) releases an annual (non-exhaustive) list of CRAs subject to the FCRA.642 Some of the major tenant screening CRAs are:
Collection Actions: 11.7.3.1 The Wrong Person
An applicant’s tenant screening report may include criminal records belonging to a different person, referred to as a “mismatched report.” This type of error often results from background screeners’ use of unsophisticated or over-inclusive criteria to match applicants with their criminal record information, along with their failure to use other available information to verify that the criminal record in fact belongs to the rental applicant.
Collection Actions: 11.7.3.2 Incomplete or Misleading Status of Criminal Proceedings
Reporting on the accurate status of a criminal proceeding requires regularly checking the original source data at courthouses. Tenant screening companies typically do not search courthouse records each time they conduct a background check, and instead rely on databases of this information that may not be regularly updated. Thus, a tenant screening company may report an arrest or a criminal charge, but not a subsequent dismissal or acquittal, for example.644
Collection Actions: 11.7.3.3 Misclassified Offenses
Screening reports commonly miscategorize offenses, such as categorizing a misdemeanor as a felony, or a traffic ticket as a misdemeanor. This occurs because, after retrieving criminal record information, the tenant screening company must then sort the records into categories. At this point, screeners sometimes inaccurately categorize the records, often due to a misunderstanding of how a particular state reports and classifies criminal record information.645
Collection Actions: 11.7.3.4 Duplicate Criminal Records
A tenant screening report may list a single arrest or incident multiple times, wrongly suggesting that the applicant has committed multiple offenses. For example, when a tenant screening company relies on multiple databases of criminal record information, the company may treat the same offense listed in each database as a separate offense. Similarly, the tenant screening company may report various stages of the same offense as separate offenses.646
Collection Actions: 11.7.3.5 Expunged Records
Nearly all states provide remedies to limit the dissemination of criminal record information. They do so under a host of names, including “expungement,” “sealing,” “clearing,” “set-aside,” and “pardon.” In this section, the term “expungement” is meant to encompass all such remedies. Unfortunately, tenant screening companies commonly report expunged records. The reporting of expunged records often occurs due to tenant screeners’ and records vendors’ failure to regularly update their databases to remove these records.647
Collection Actions: 11.7.3.6 Obsolete Criminal Records
Background screeners can only report non-conviction records for seven years. Non-conviction records include arrests, criminal complaints, warrants, indictments, parole, probation, and other various possible dispositions besides convictions.648 The seven-year period for arrest records starts from the day of arrest. Arrest warrants that are still outstanding can be reported beyond seven years, however.
Collection Actions: 11.7.3.7 Nuances About Reporting Criminal Convictions
The FCRA allows background screeners to report conviction records indefinitely. However, it is important to understanding the following nuances:649