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AFSA, Trades File Amicus in FTC “Holder Rule” Case

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AFSA, Trades File Amicus in FTC “Holder Rule” Case

AFSA and a coalition of trade associations (the “Trades”) filed an amicus brief supporting TD Auto Finance in Pulliam v. TD Auto Finance, a case concerning the Federal Trade Commission (FTC) Holder Rule. Under this rule, every consumer credit contract must contain a two-sentence clause. The first sentence subjects any “holder” or seller of the contract to all claims and defenses that the “debtor” may have against the seller under the contract. The second sentence limits the debtor’s “recovery” to the amount the debtor paid under the contract.

At issue is whether “recovery” includes attorney fee awards, as well as damages, in the Holder Rule’s second sentence. In the amicus brief, the Trades argue that the Holder Rule’s second sentence limits all monetary recovery from the holder, including attorney fees as well as damages, that the debtor asserts against the seller for misconduct, citing the plain meaning of the statute and the broadness of the word “recovery”. As such, the Trades urge the Court to apply the plain language of the entire Holder Rule in its decision, including the word “recovery”, which encompasses all monetary sums awarded by a judgment, both damages and any attorney fee award.

November 23rd, 2021 by