In a small victory for the ARM and debt collections industry today against the regulatory overreach of the government, Judge Richard Stearns of the Federal District Court for the District of Massachusetts granted ACA International’s motion for a temporary restraining order and preliminary injunction in a lawsuit challenging Massachusetts Attorney General Maura T. Healey’s emergency order that stops outbound collections calls for 90 days.

Judge Stearns full 29 page order can be read here. Regulations enacted by the MA Attorney General Healey are nullified and can no longer able to be enforced.

“While I laud the Attorney General’s desire to protect citizens of Massachusetts during a time of financial and emotional stress created by the Covid-19 pandemic, I do not believe that the Regulation adds anything to their protections that the existing comprehensive scheme of law and regulation already affords to debtors, other than an unconstitutional ban on one form of communication,” wrote Judge Richard Stearns of the Federal District Court for the District of Massachusetts in his order.

However, the TRO is truly only a temporary relief in which it seeks to preserve the status quo and allows the ARM industry to continue working with lenders under this unique time of crisis. ACA International argued on the grounds that regulation passed by AG Healey last month violate the First Amendment by prohibiting only one type of calls — those from third-party debt collectors. Judge Stearns granted the TRO on the merits of First Amendment rights for commercial speech.

Prodigal will continue to follow this case and update its partners in ARM on further developments and potential implications.

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