No, we do not believe your bank would be subject to the FDCPA, provided that you began servicing the loan before default occurs.

The FDCPA applies to “debt collectors,” defined in Regulation F as “any person . . . who regularly collects or attempts to collect, directly or indirectly, debts owed or due, or asserted to be owed or due, to another.” The term “debt collector” excludes a person collecting debts owed to another person related by common ownership or affiliated by corporate control if the person’s principal business is not the collection of debts. In this case, this exception would not apply, as the debt that your bank is seeking to collect is owned by a secondary market investor — the debt is not owed to your subsidiary.

However, Regulation F includes another exception applicable to mortgage servicers: “The term debt collector excludes . . . [a]ny person collecting or attempting to collect any debt owed or due, or asserted to be owed or due to another, to the extent such debt collection activity . . . [c]oncerns a debt that was not in default at the time such person obtained it.” The Northern District of Illinois has held that with respect to a corresponding exception in the FDCPA, “[a] mortgage servicer that begins servicing a loan before default occurs falls within this exception.” Consequently, we do not believe your bank would be considered a “debt collector” when attempting to collect on a mortgage it services for a third-party, provided you began servicing the loan before a default occurs.

For resources related to our guidance, please see:

• Regulation F, 12 CFR 1006.2(i)(1) (“Debt collector means any person who uses any instrumentality of interstate commerce or mail in any business the principal purpose of which is the collection of debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due, or asserted to be owed or due, to another. Notwithstanding paragraph (i)(2)(vi) of this section, the term debt collector includes any creditor that, in the process of collecting its own debts, uses any name other than its own that would indicate that a third person is collecting or attempting to collect such debts. For purposes of § 1006.22(e), the term also includes any person who uses any instrumentality of interstate commerce or mail in any business the principal purpose of which is the enforcement of security interests.”)

• Regulation F, 12 CFR 1006.2(i)(2) (“The term debt collector excludes: . . . (ii) Any person while acting as a debt collector for another person if: (A) The person acting as a debt collector does so only for persons with whom the person acting as a debt collector is related by common ownership or affiliated by corporate control; and (B) The principal business of the person acting as a debt collector is not the collection of debts.”)

• Regulation F, 12 CFR 1006.2(i)(2) (“The term debt collector excludes: . . . (vi) Any person collecting or attempting to collect any debt owed or due, or asserted to be owed or due to another, to the extent such debt collection activity: . . . (C) Concerns a debt that was not in default at the time such person obtained it.”)

• Martin v. Bank of Am., N.A., 2012 U.S. Dist. LEXIS 159096, *8 (N.D. Ill. 2012) (“An entity collecting or attempting to collect debts owed or asserted to be owed to another is not a ‘debt collector’ if the debt was not in default when the entity obtained it. . . . A mortgage servicer that begins servicing a loan before default occurs falls within this exception.”)