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ABA raises new concerns over FTC rule

The American Bar Association this week raised fresh concerns with the Federal Trade Commission about definitions covering lawyers as debt relief agencies, this time as they related to provisions within the FTC’s proposed “Mortgage Assistance Relief Services” rule.

In a March 29 letter to the FTC, the ABA outlines how the commission’s proposed Rule No. R911003 could impose excessive new federal regulations on many lawyers, undermine the confidential attorney-client relationship and negatively affect state court supervision and the discipline of lawyers.

The ABA wants the FTC to modify the proposal so that consumers will be able to access legal services to renegotiate mortgages and, in many cases, avoid foreclosure.

“One of the goals of securing legal representation is to avoid bankruptcy and litigation if possible, not encourage them,” the letter, signed by ABA Governmental Affairs Office Director Thomas Susman, states.

In a separate statement, the ABA argues the FTC defines “mortgage assistance relief service provider” so broadly that it will likely apply to many bankruptcy lawyers, consumer lawyers, real estate lawyers, family lawyers, litigators and general practitioners. The association also said some of the proposed rules’ key provisions would conflict with ABA Model Rules of Professional Conduct 1.5 and 1.6 relating to fees and confidentiality of information, and could limit a lawyer’s ability to fulfill fiduciary duties to clients.

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