The supreme court decision on the secondary market being subject to FDCPA regulations will have a huge impact to the loan industry.

The recent ruling by the supreme court on the case of Hanson et.al.v Santander Consumer USA will have tremendous implications on the secondary market particularly to those who invest in the mortgage and loan industry. Unless the Congress amends the law, the secondary markets and originators are not considered a “debt collector” as they are not subject to the Fair Debt Collection Practices Act (FDCPA).In the above case that was presented before Justice Neil Gorsuch’s in April 2017, Citifinancial Auto gave loans to individuals seeking to buy automobiles. They then repossessed the loan when the individuals defaulted and sold it to Santander Consumer USA. Santander made attempts to collect their debt from the individuals which amounted to the difference between the purchase price and the amount of money that the Citifinancial Auto sold the debt. This was consequently alleged a violation of the FDCPA regulations and thus a suit was filed against them. Santander explained their position as collecting the debts it had purchased as compared to collecting as a third party to the Justice who ruled in their favor and against the borrowers. Justice Nel in his written opinion cited a gap in the Act prompting the Congress to review the law.
Read more on the following link: http://www.dsnews.com/news/06-12-2017/supreme-court-secondary-markets-not-subject-fdcpa-regulations