Federal Trade Commission May Cease To Exist
One of congress' recent 1997 budget developments is consideration of the elimination of the Federal Trade Commission (FTC) from the roles of government departments. Responsibilities for these duties would pass to an overworked Justice Department.
The House and Senate Budget Committees have released preliminary summaries of their plans for a fiscal year 1997 budget resolution. According to the May 12th edition, it calls for the complete elimination of the FTC, which is the regulatory body responsible for enforcement of the Federal Fair Debt Collection Practices Act (FDCPA).
Why is this important you ask? Given the fact that there is a growing number of courts which are beginning to come to the conclusion that a check is not a debt, the tide may be shifting in favor of check collections not being subject to the FDCPA, in spite of the 1988 FTC commentary to the contrary.
For example, in the 9th Federal district, CIV 95-2263 PHX PGR, the U.S. District court for the District of Arizona says, "The court disagrees with the Plaintiff's contention that the FDCPA governs this action because a merchant who takes a check extends credit until the check clears. The court concludes instead that the FDCPA does not pertain to this action because the acceptance of a check in payment for consumer goods does not constitute the extension of credit as contemplated by the FDCPA because there is not agreed-upon deferral of payment."
The 3rd Circuit Court of Appeals has come to similar conclusions, as had other courts. The elimination of the FTC, which seems to want to interpret Federal legislation to include checks, could well fall to the Justice Department and state resolution.
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