The New 7.5 Yr. Reporting Period!

[color=â?a62a2aâ?] "There is a principle which is a bar against information, which is proof against ALL arguments and which cannot fail to keep a man in a perpetual state of everlasting ignorance - that principle is contempt prior to investigation." [/color]
����������������������...................(Herbert Spencer)



How to get the most out of this thread. Grab some coffee, a beer, or better yet, a bottle (lol) take off your shoes and relax. Read this thread slowly, thoughtfully and carefully. It won't be hard to miss something otherwise. You will need to take your time, and perhaps read more than once. At times it will seem that we're bouncing around a little, we are, sometimes we have to. But by the time we're finished I hope to have cleared up one area of confusion I see happening from time to time, and even strikes fear and trembling into the hearts and minds of not only the Credit Correction Guru's but Supreme Court Justices alike. We shall examine FCRA Section 605 (c)(1), (hereinafter known as 605). We will completely tear this section apart, examine what it appears to say and what it actually says, and then reconstruct it the way it should be, if it were to be made clear so that guy's like us could actually read it. So plan on spending a little time on this one.

I do not wish to engage in controversy. We MUST, however, at all cost, endeavor to make certain that the written record remains as accurate as possible. There will soon be 8,000 members here. We cannot know how these items of information will affect those who read them, and by "geometric expansion", those around them, and then those around them and so on. It is to this end that I pose this essay.

I intend to address the following:

• That although the language of 605 does appear to add 180 days to the 7-year reporting period in all cases, it does NOT
• That this means that the 180 days is "flexible" in nature, rather than "fixed"
• That the correct interpretation of statutes is very tricky business
• Statutory Construction causes even the brightest on the planet, including Supreme Court Justices to wet their diapers (including yours truly)
• We don't really know for sure who's right and who's wrong. And won't until the courts weigh in

So, get that drink and relax - Let's Roll:

We are about to cover a lot of ground. We have to. We have no choice. In order to fully appreciate all thatâ??s involved here, we'll need to learn about several legal concepts that in most of our professions or jobs are just never talked about. We will need each of the following strange sounding phrases as we progress through this topic.

• Statutory Construction
• Statutory Interpretation
• Legislative Intent
• Words of Art
• Counting Backwards
• Time Tolling

Not only that, but weâ??ll need to examine some legal definitions too. Namely "Tolling", "Shall" and "Date Certain". Iâ??ll intersperse those. It will make reading a little more fluid.


Background:

LKH's dilemma:

The Running of the Reporting Period!


- A Disagreement Ensues:

I do agree that it appears to so state, however, IT DOES NOT!

Before we can even correctly approach the issue, and in as much as I hate to do this to you, we need to learn how to read all over again. Reading statutes is not like reading the newspaper.

We need to first visit 3 little known fine points regarding how to read a statute. It's called â??STATUTORY INTERPRETATIONâ?. I like Lectlaw. There you'll find a fabulous 5 page, detailed explanation entitled â??STATUTORY CONSTRUCTION/INTERPRETATIONâ?. To cut a long story short hereâ??s the 3 components we need to remember when we are reading a statute. Theyâ??re called the 3 Cannons of Statutory Interpretation:

• Every single word is to be taken individually, literally and at face value
• When in doubt, the court is to seek [FIRST] what Congress intended when they argued the law. This is called â??Legislative Intentâ?.
• Whatever interpretation is arrived at, it MUST NOT result in a â??Patently Absurd Conclusionâ? when taken together with other construct.

The legal system's often a mystery, and we, its priests, preside over rituals baffling to everyday citizens.
................��������������.......... (Henry Miller)

Continued:

 

Continued:

But before we can even examine â??every wordâ? we first must understand what each word means to the legal community. They have their own definitions of words you and I use every day but many times they donâ??t mean the same thing as we think they do. There are hundreds of these tricky words. In fact an entire Dictionary is required to redefine the words in question. Most attorneyâ??s prefer â??Blackâ??s Law Dictionaryâ?. These tricky words are called â??Words of Artâ?:

"Jargon known only to people who specialize in a particular occupation.


Lets examine our first one. You may have noticed the word "shall" in 605, but more than likely you read right past it. Normally when we see "shall" we see "must" or "will", which is quite understandable since that's the definition of the word. But when used in statutes "shall" doesn't mean "shall". "Shall" is "A WORD OF ART".

First, our definition of the word: "SHALL".

-Our Definition:
Shall: Def: Something that will take place or exist in the future.


Humor me a little. To get the best benefit out of what I'm going to discuss, I need your permission to play a little mind trick on you. So please bear with me as we "re-phrase" 605, 3 different times, and make it read clearly and understandably so that we can take from it what it means. To begin, I'm only going to change ONE word; the word is "shall". I'm going to change "shall" to "will", our common, every day definition. Also I've taken out the unnecessary stuff about "charged to profit and loss" and all that. We're gonna break this down in detail. We're gonna "mince" some words.

Mutilation #1:

• FCRA 605, (1) In general. The 7-year period referred to in paragraphs (4) and (6)(2) of subsection (a) WILL begin, ... upon the expiration of the 180-day period beginning on the date of the commencement of the delinquency which immediately preceded the collection activity.

Certainly seems clear enough.

When the word "shall" is replaced with the word "will" nothing changes in our understanding of what we're reading. The vast majority of people on these boards, or anywhere else for that matter construe the word "shall" to mean the same thing as the word "will". "Shall" and "will" are synonymous, and as we saw in our definition of "shall", it means "will", and "will" is merely the future tense of "must".

So if it were the case (that shall meant will/must) it would be a correct statement to say that our 7-year reporting, in all cases, WILL run for 7 years PLUS 180 days ..., as the statute seems to be saying. To this I wholeheartedly agree.

The problem here is that "shall" doesn't mean "will" with respect to 605. "Shall" means "may"! (may, as in the opposite of will/must).

When considering that according to Black's Law Dictionary, the definition of the word â??shallâ? requires two hundred and one separate words to define it, and Garnerâ??s â??A Dictionary of Modern Legal Usage,â? requires several times that amount, we ALL must realize that insisting that "the language is clear" can backfire very quickly, as it has in this case.

Let's take a look at "shall", shall we. Here's the technical, legal definition of the word according to the "Real Life Dictionary of the Law":

• http://www.law.com/index.shtml (Scroll down on the left, blue panel under â??Resourcesâ?. There youâ??ll find the â??Legal Dictionary)
  SHALL
  v. 1) an imperative command as in "you shall not kill." 2) in some statutes, "shall" is a direction but does not mean mandatory, depending on the context.
  
  Well, if that's not bad enough here's the legal definition of the word; "may"
  
  MAY
  v. a choice to act or not, or a promise of a possibility, as distinguished from "shall," which makes it imperative. 2) in statutes, and sometimes in contracts, the word "may" must be read in context to determine if it means an act is optional or mandatory, for it may be an imperative. The same careful analysis must be made of the word "shall." Non-lawyers tend to see the word "may" and think they have a choice or are excused from complying with some statutory provision or regulation.
  See also: shall

Interesting to note, by the way, the definition of "may" refers back to "shall"; "See also: shall"

Sensus verborum est anima legis. - The meaning of words is the spirit of the law.

• 
  Blackâ??s Law Dictionary, Revised 4th ed., pp 1541-1542, defines â??shallâ?? as follows:
  â??As used in statutes, contracts or the like, this word is generally imperative or mandatory... In common ordinary parlance, and in its ordinary signification, the term "shall" is a word of command, and one which has always or which must be given a compulsory meaning; as denoting obligation. It has a peremptory meaning, and it is generally imperative or mandatory. It has the invariable significance of excluding the idea of discretion, and has the significance of operating to impose a duty which may be enforced, particularly if public policy is in favor of this meaning, or when addressed to public officials, or where a public interest is involved, or where the public or persons have rights which ought to be exercised or enforced, unless a contrary intent appears.... But it may be construed as merely permissive or directory (as equivalent to "may,") to carry out the legislative intention and in cases where no right or benefit to anyone depends on its being taken in the imperative sense, and where no public or private right is impaired by its interpretation in the other sense... Also, as against the government, it is to be construed as "may," unless a contrary intent is manifest. (Emphasis added)
  
  Barronâ??s Law Dictionary, Fourth Ed., page 473, concurs:
  â??Often used to denote an obligation or direction to do some act, 170 N.W. 2d 433, 440; however, it is sometimes considered to be permissive where it is necessary to give effect to the intent of the word, and to mean the same as the word, â??may,â? 103 N.W. 2d 245, 254.â? (Emphasis added)
  
  Garnerâ??s, â??A Dictionary of Modern Legal Usage,â? Second Edition, further elaborates on the problems associated with interpreting â??shallâ?? in the imperative tense:
  
  â??Few reforms would improve legal DRAFTING more than if drafters were to begin paying closer attention to the verbs by which they set forth duties, rights, prohibitions and entitlements. In the current state of common-law drafting, these verbs are a horrific muddle and, what is even more surprising; few drafters even recognize this fact.
  
  The primary problem is shall, to which we must immediately turn our attention. (Emphasis added)
  
  This word [shall] runs afoul of several basic principles of good drafting. The first is that a word used repeatedly in context is presumed to bear the same meaning throughout. (Shall commonly shifts itâ??s meaning even in mid-sentence.) The second principle is strongly allied with the first: when a word takes on too many senses and cannot be confined to one sense in a given document, it becomes useless to the drafter. (Shall has as many as eight senses in drafted documents.) The third principle has been recognized in the literature on legal drafting since the mid-19th century: good drafting generally ought to be in the present tense, not the future. (Shall is commonly used as a future-tense modal verb.) In fact, the selfsame quality in shall-the fact that it is a CHAMELEON-HUED WORD-causes it to violate each of those principles.
  
  How can shall be so slippery, one may ask, when every lawyer knows that it denotes a mandatory action? Well, perhaps every lawyer has heard that itâ??s mandatory, but very few consistently use it in that way. And, as a result, courts in virtually every English-speaking jurisdiction have held-by necessity-that shall means may in some contexts, and vice-versaâ?¦.
  
  One solution isâ?¦ the â??ABC Rule,â? so called because, in the late 1980s, it was most strongly advocated by certain Australian, British, and Canadian drafters. The ABC rule holds that legal drafters cannot be trusted to use the word shall under any circumstances. Under this view, lawyers are not educable on the subject of shall, so the only solution is complete abstinence. As a result, the drafter must always choose a more appropriate word: must, may, will, is entitled to, or some other expression. REMEMBER THIS. WE WILL USE "NO LATER THAN" as we proceed.
  
  This view has much to be said for it. American lawyers and judges who try to restrict shall to the sense â??has a duty toâ? find it difficult to apply the convention consistently. Indeed, few lawyers have the semantic acuity to identify correct and incorrect shalls even after a few hours of study. That being so, there can hardly be much hope of the professionâ??s using shall consistently.
  
  Small wonder, then, that the ABC rule has fast been gaining ground in the U.S. For example, the federal governmentâ??s Style Subcommittee - part of the Standing Committee on Rules of Practice and Procedure â?? a subcommittee that since 1991 has worked on all amendments to the various sets of federal court rules, adopted this approach, disallowing shall, in late 1992.â?

If our own federal governmentâ??s Standing Committee on Rules of Practice and Procedure had to BAN the use of the word â??shall,â? there's just no way to proclaim that today's statutory language is plain.

Continued:

 

Continued:

Well so much for definitions. Let us now turn to Case Law.

The United States Supreme Court would be the first to tell you to "mince every word":

• 
  U.S. Supreme Court
  U. S. v. LEXINGTON MILL & ELEVATOR CO., 232 U.S. 399 (1914)
  
  "Furthermore, all the words used in the statute should be given their proper signification and effect."
  
  Washington Market Co. v. Hoffman, 101 U.S. 112, 115 , 25 S. L. ed. 782, 783.
  'We are not at liberty,' said Mr. Justice Strong, 'to construe any statute so as to deny effect to any part of its language. It is a cardinal rule of statutory construction that significance and effect shall, if possible, be accorded to every word. As early as in Bacon's Abridgment, 2, it was said that 'a statute ought, upon the whole, to be so construed that, if it can be prevented, no clause, sentence, or word, shall be superfluous, void, or insignificant.' This rule has been repeated innumerable times.'

When congress argues over a statute they hammer out the fine points word for word. And then it goes to an entire committee to rehash it, word for word yet again. It's called "Mark-Up" (where they literally mark it all up) and is a brutally detailed function of a group of people called, "Drafters". When they get into the back rooms of Capital Hill they scream, call each other names and even throw phone books at each other. I know from whence I speak. This is a huge part of the reason why it can take years to design new law. And when it's all over, they're friends again, at the end of the day, and go get drunk together.


The United States Supreme Court is in agreement with the permissive interpretation of the word â??shallâ??.

• 
  U.S. Supreme Court
  CAIRO & F R CO v. HECHT, 95 U.S. 168 (1877)
  
  CHIEF JUSTICE WAITE delivered the opinion of the court. "The word 'shall,' when used in statutes, is to be construed as 'may,' unless a contrary intention is manifest".

In other words if congress means to use the word "must" instead of "shall" they must use the word "must", not "shall". lol

This problem is older than dirt. Thomas Jefferson wrote about it in the Federalist #62, (I think it was 62). But if you think those are a bit too old, let's look at some newer stuff. Here's my personal favorite court, the 9th Circuit. Here we see them actually get something right:

• December 2001
  Ninth Circuit Finds "Shall" Means "May" - EPA Decisions Regarding Enforcement Action under the Clean Water Act Are Discretionary Decisions Not Subject to Judicial Review
  Sierra Club, et al. v. Whitman, et al. ___F.3d___, Case No. 00-16895 (9th Cir. Oct. 2, 2001).
  Even though CWA �§ 1319(a)(3) states that the Administrator "shall" issue an order requiring compliance with the Act upon the Administrator's finding of a CWA violation, the Ninth Circuit now holds that "shall" actually means "may."
  
  North Dekota Supreme Court MINUTES OF MEETING
  Joint Procedure Committee
  November 7 & 8, 1991
  Judge Smith reported that there is an obvious inconsistency with the federal conference report which used the word must rather than shall. Judge Glaser MOVED to amend the rule on page 46 by leaving the word "must" in place of "shall" on line 10 and on line 14 as written on page 46 of the agenda.

We're not even the only country that uses this statutory interpretation. We could have a little fun here and listen to the Brits hash it out. They talk a little funny.

Here's one from the right Honorable MP (Member of Parliament) Mr. Dinsmore, of the House Of Lords in Great Britain, where his entire case turned on the permissive interpretation of â??shallâ?. He defended the Parliament in a case called â?Crown v. Secretary of State for the Home Department, ex parte, Fire Brigades Union and othersâ?:

(Oh - btw - "Right Honorable" means they're right all the time. Like here in the U.S., they call each other "My good friend and esteemed colleague". Then when they get back to work they beat each other to death) lol

• 21 May 1999 : Column 1414
  Mr. Dismore: I am only sorry that the right hon. Member for Penrith and The Border (Mr. Maclean) is not here today--he is another member of the usual Friday crew--because we could have had an interesting trip down memory lane.
  
  When I intervened on my hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller), I mentioned the case of the Crown v. Secretary of State for the Home Department, ex parte Fire Brigades Union and others. It was the leading case that interpreted, in a particular context, wording similar to that of my hon. Friend's new clause. That represents a trip down memory lane for the right hon. Member for Penrith and The Border and myself because I was the solicitor who handled the case, and he was the Home Office Minister whom, I am pleased to say, I defeated in the House of Lords.
  
  The case concerned the then criminal injuries compensation scheme under the Criminal Justice Act 1988, which contained in its implementation provisions wording almost identical to that of the new clause. The House of Lords construed what the meaning of the word "may" was in that context. The case turned on whether "may" means "shall", or "shall" means "may", or neither, in any particular case. Bearing in mind what was said when we discussed the Road Traffic (Vehicle Testing) Bill just now, it is somewhat peculiar that, for the second time today, I am having to criticise the wording of an amendment devised by my hon. Friend the Member for Ellesmere Port and Neston.
  
  India
  Decisions from the Chair
  (Lok Sabha)
  "I need not go into the controversy whether 'shall' means may' in this context or not because it is not essential for giving my decision at this moment, though I might make a casual reference to it.
  
  
  Unpublished:
  
  Gow v. Consolidated Coppermines Corp.:
  
  "If necessary to avoid unconstitutionality of a statute, "shall" will be deemed equivalent to "may". ..."
  
  George Williams College V. Village of Williams Bay.:
  
  ""Shall" in a statute may be construed to mean "may" in order to avoid constitutional doubt".

For more research on "Shall Means May" follow these instructions;

Go to www.google.com advanced search.

In the "with all of the words" window type in: "statutory construction"
In the "with the exact phrase" window type in: "shall means may"


So let us once again redesign 605 the way it actually should read. Once again I'm going to change the word in question. This time I'm gonna change it to "may".


Mutilation #2:

• FCRA 605, (1) In general. The 7-year period referred to in paragraphs (4) and (6)(2) of subsection (a) MAY begin, ... upon the expiration of the 180-day period beginning on the date of the commencement of the delinquency which immediately preceded the collection activity.

When filtered through the correct LEGAL definitions we can see that the 7-year period â??mayâ? begin at the expiration of the first 180 days, but it need not be mandatory.

Ever heard the expression; "This Changes Everything"?

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Why the 180 days even exists:

Prior to the CCRRA (Consumer Credit Reporting Reform Act) of 96, the 7-year clock began at the time the negative action was actually taken.

The problem arose when a creditor would "sit" on an account for whatever length of time they wanted to BEFORE finally charging off or placing for collection. What if XYZ Company decided NOT to chargeoff or place for collection for 5 years after your delinquency, and then did so. The drop off date could have been 12 years after your delinquency, (5 years plus 7 years, 12 years). The act fixed that date at "commencement of the delinquency immediately preceding the ... action."

Do other areas of law we look at all the time back up my assertions? Yes - if one is really, REALLY digging. Whenever we're unclear about an issue we try to find congresses intent, the second in the Cannons of Statutory Interpretation. Whenever enacting law congress has a long drawn out discussion, which sometimes turns into an argument. If it's done "IN Congressâ?, or in other words "In Congress Assembled", every single word is transcribed by multiple transcriptionists and logged into the Congressional Record. So we can look up the arguments these guy's have, *WORD FOR WORD*, when talking about how best to run the country.

By looking at congresses intent maybe we can find clarification about what they had in mind when they enacted the FCRA, and when they subsequently revised 605. They're the ones who make the laws, FTC merely enforces them. Such can be found in the Staff Opinion to Johnson. Before we can do that though, we need to address the other of our Words of Art, that word/term;

â?Date Certainâ?:

• 
  -"Date Certain" does NOT mean "A Certain Date":
  
  PHOENIX NEWSPAPERS, INC., v. MOLERA
  
  "[Date Certain] just as readily may mean on or before a certain date. Both definitions of the word are given in Black's Law Dictionary 201(6th ed. 1990)."
  
  -EnergyVortex:
  
  Date Certain:
  "A day on which something is expected to be done, or the date by which it is certain to be done."

For our purposes we'll be using the expression; "No Later Than/On or Before". I could post just as exhaustive a study on â??Date Certainâ? as I have â??shallâ? but Iâ??ll save you from that, in the interest of time.

As we work through the Johnson Opinion pay special attention to where you will see â??Date Certainâ?. Also, pay special attention to the date of the Johnson Opinion, we'll get back to it:


What Appears to be the Total Destruction of a Staff Opinion:

• August 31, 1998
  
  Mr. Clifford A. Johnson
  1917 Surrey Trail
  Bellbrook, Ohio 45305
  
  
  Re: FCRA §§ 605(c) and 623(a)(5) - "Commencement of the delinquency"

• 
  
  Dear Mr. Johnson:
  
  This responds to your request for our views concerning the calculation of the period for which a consumer reporting agency ("CRA") is permitted to report accounts that have been charged off, placed for collection, or subject to similar action, under the amended Fair Credit Reporting Act ("FCRA"). You report that the following series of events occurred with respect to one of your credit accounts:
  
  "My last payment was received by the creditor 12/96. My payments were due monthly and I missed the 1/97 payment and all subsequent payments culminating in a charge off. This creditor does not report to the credit bureau until the account is 90 days delinquent. . . . The creditor contends that the delinquency did not occur until 3/97 because that is when they first reported it."
  
  Section 623(a)(5) requires a creditor that reports a chargeoff to a CRA to notify the agency (within 90 days of reporting the account) of "the month and year of the commencement of the delinquency that immediately preceded" the chargeoff. Section 605(a)(4) provides that the credit bureau may report the chargeoff for seven years. Section 605(c)(1) provides that seven year period begins 180 days from that date.

• [Butch's note: This one statement is confusing.]
  
  In the scenario you reported it is our view that the delinquency that led to the charge-off "commenced" in January 1997, the month the first payment was missed. Thus, that is the month and year that the creditor must report to the CRA, and that the CRA must use to calculate the time period dictated by Section 605. [Dammit Brinkerhoff! That's the exact opposite of what you just said at the end of the previous paragraph!]
  
  We are not in accord with the contention that the date "when (the creditor) first reported" the chargeoff to the CRA constituted the start of the delinquency. Sections 605(c)(1) and 623(a)(5) were recently added to the FCRA to correct the ineffectiveness of the previous FCRA, under which the date that started the seven-year period was uncertain or under the control of the creditor.(1) The legislative history of these provisions makes it clear that they were designed to correct the often lengthy extension of the period that resulted from delayed creditor action:
  
  From the Congressional Record: [emphasis added]
  
  Current law generally prohibits consumer reporting agencies from including in a consumer report accounts placed for collection or charged to profit and loss which antedate the report by more than seven years. The Committee is concerned that this seven year limitation is ineffective. In some cases, the ... action occurs months or even years after the commencement of the preceding delinquency. ... Consequently, the consumer report may contain such information even if the delinquency commences more than seven years before the date on which the report is provided to a user.
  
  The Committee bill specifies that the seven-year period with respect to information concerning a delinquent account charged to profit and loss . . . may begin no more than 180 days after the commencement of the delinquency immediately preceding the ... action.
  S. Rept. 104-185, 104th Cong., 1st Sess. 39-40 (emphasis added).
  
  BY THE GODS! Even congress can't get it right. "More" is a quantity. "Later" is a time. The correct phrase is; "No Later Than". But I guess that all depends on what the definition of "IS" is. LOL
  
  Thus, Congress intended to establish a date certain -- the start of the delinquency -- to begin the obsolescence period (now seven years, plus 180 days).
  ...
  In sum, we believe that the phrase "commencement of the delinquency that led to the action" in Sections 605(c)(1) and 623(a)(5) of the FCRA should be construed according to its normal meaning. If a consumer falls behind on an account and never catches up, the delinquency has its "commencement" when the first payment is missed. From that point on, the account is past due and thus delinquent.
  
  The opinions set forth in this informal staff letter are not binding on the Commission.
  
  Sincerely yours,
  
  Clarke W. Brinckerhoff

- Preeminence of Legislative Intent in the Rules of Statutory Construction:

"The primary rule of statutory construction, to which every other rule as to interpretation of particular terms must yield, is that the intention of the Legislature must be ascertained if possible, and when once ascertained, will be given effect, even though it may not be consistent with the strict letter of the statute." Marina Village v. California Coastal Zone Conservation Commission (1976) 61 Cal.App.3d 388, 392

Legislative intent is as important in statutes as the language itself. When ambiguity occurs itâ??s the deciding factor. Again, in the interest of time Iâ??ll save you from all the other â??Legislative Intentâ? references I have, about 300 or so. We just saw where congress itself stated, in stenographed testimony, in congress assembled, that the â??No Later Thanâ? component applies to the 180 days. If one wishes to argue further, I refer you to no less of an authority than the Congress of the United States.

Continued:

 

Continued:

Realizing that this portion of Brinkerhoff's letter only serves to promulgate the confusion, the FTC later added an item of clarification, the footnote. The FTC would not go back and change the letter because itâ??s already been sent to Johnson, and that would result in a Staff Opinion alleged to have been sent to Johnson, that Johnson never received. Moreover, it had already been published and relied upon by many. FTC Staff really does have more class than that. Rather, they would issue a technical correction in the form of a footnote. Here's the rest of the Johnson Opinion. As I've stated countless times, always VERY CAREFULLY examine your footnotes. If you do a search on this opinion you'll find MANY of them, but I bet you won't find many that include this critical footnote. This too, only serves to confuse because the board doesnâ??t get the benefit of the entire opinion.


The Footnote:

• The additional 180 day period accords a measure of flexibility to credit bureaus whose furnishers may provide them with the wrong date. However, the expansion of the time period that Section 605 allows chargeoffs and similar actions to be reported accents the desirability of treating the "commencement" of the delinquency as the first missed payment -- not some later date that would further extend the period.

Two points can easily be gleaned from this footnote:

• A measure of flexibility does NOT mean fixed
• ... "not some later date that would further extend the period" means; NOT designed to further extend the time frame from 7 years to 7 years PLUS 180 days

NOW WATCH THIS:

Remember the Johnson Date?!?!

Johnson (above) is dated August 31, 1998. Therein, as I've already stated, Brinkerhoff confuses us, thus necessitating the clarification footnote. But in Kosmerl, dated June 4, 1999, almost a year later, he finally gets it exactly right. Huge Congrats to Brinkerhoff!

Read the underlined below, carefully:

• 
  June 4, 1999 <-----------
  
  Mr. Jeff Kosmerl
  949 Ormewood Terrace
  Atlanta, Georgia 30316
  
  Dear Mr. Kosmerl:
  
  1. As explained in the enclosed letter (Johnson, 8/31/98), it was Congress' intent in enacting Sections 605(c)(1) and 623(a)(5) to establish a single date -- the start of the delinquency -- to begin the obsolescence period on these accounts. This avoids the "multiple date" problem that arguably existed prior to the 1996 amendments. In the case you described, the date of the "commencement of the delinquency" that led to the creditor's chargeoff or collection action would be July 1991 or earlier (depending on how long the account was continuously delinquent before that). The seven year period would start no later than January 1992 (180 days later), with the result that the chargeoff or collection could no longer be reported in most cases beyond January 1999.
  
  Sincerely yours,
  
  Guess who? You got it:
  
  Brinkerhoff

He sure changed his tune! LOL

The next opinion down in that series of the Staff Opinions is Amason, from 2000. There youâ??ll see the â??Date Certainâ? terminology used again. To save time no need to post it here.

Well ... we're finally in a position to bring this all the way back around and complete the circle. I need to play two word tricks on you this time instead of just one. Somehow, I don't think you'll mind:

• "SHALL" means "MAY"
• "NO LATER THAN" is used by the FTC, Congressional Testimony, and has been sanctioned by the Supreme Court to replace less stable words of art. It has also already been outlawed in statutory construction by portions of our own government (as well as other countries) and the rest will soon follow.

I'm thoroughly justified at continuing our experimental mutilation of 605, but this time we're really gonna annihilate it. This time we need to change a word AND a phrase. You guessed it, â??mayâ? and â??no later thanâ? But we must do so in order to fix it.

Now lets see what you should see (never mind what you think you see) when you read 605:

Mutilation #3. The last one, I promise.

• FCRA 605, (1) In general. The 7-year period referred to in paragraphs (4) and (6)(2) of subsection (a) MAY begin, ... NO LATER THAN the expiration of the 180-day period beginning on the date of the commencement of the delinquency which immediately preceded the collection activity.

And again my statement from above:

Indeed, 605 is not carved is stone but is flexible, in the sense that it's within this [fixed] time frame when the 7-year reporting period must begin, thus rendering my statement EXACTLY correct in every respect, even right down to the fact that it's a misconception shared by many.

Continued:

 

Continued:

So now that weâ??ve demystified how it does NOT work letâ??s see how it does.

The single biggest problem we have when we try to understand this 7-year mystery is that of our perception. When we perceive the 7 years we look forward donâ??t we? We want to know when this negative TL will drop off. But thatâ??s not how the law looks at it. THE LAW COUNTS BACKWARDS, that's what the word "antedate" means. We must learn to count backwards.

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  § 605. Requirements relating to information contained in consumer reports [15 U.S.C. § 1681c]
  (4) Accounts placed for collection or charged to profit and loss which antedate the report by more than seven years.

So letâ??s apply these concepts to 3 real world examples and see what happens;

Example #1:
You became delinquent on January 1, 1998 and never made another payment. The Creditor waits until April 11, 98 to take action (charge off, send to collections, sell/transfer debt, etc.) on the debt. The 180 day count began on January 1, 98 and runs until April 11, 98 at which time the seven (7) year reporting period begins, because this is when the OC reported to the CRA, and runs until April 2005, exactly 7 years.

How many of the 180 days were used? 100 Days. 1/1/98 to 4/11/98.


Example #2:
You became delinquent on January 1, 1998 and never made another payment. The Creditor waits until Feb. 21, 98 to take action (charge off, send to collections, sell/transfer debt, etc.) on the debt. The 180 day count began on January 1, 98 and runs until Feb. 21, 98 at which time the seven (7) year reporting period begins, because this is when the OC reported to the CRA, and runs until Feb. 2005, exactly 7 years.

How many of the 180 days were used? 50 Days. 1/1/98 to 2/21/98.

Therefore:

This beautifully articulated example of how it doesnâ??t work is precisely how it DOES work. Moreover, the 180 day period begins at the point of the commencement of the original delinquency that immediately preceded the negative action, not the DLA.


Letâ??s imagine an example where the entire 180 days WOULD be used. But now the concept of Tolling will come into play:

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  Toll
  v. 1) to delay, suspend or hold off the effect of a statute. Examples: a) a minor is injured in an accident when he is 14 years old, and the state law (statute of limitations) allows a person hurt by negligence two years to file suit for damages. But for a minor the statute is "tolled" until he/she becomes 18 and decides whether or not to sue. Thus the minor has two years after 18 to file suit.
  
  3) My example: Beginning at the commencement of delinquency, days will be counted until 180 days are reached. At this point each additional day [beyond that] will be tolled against the 7-year reporting period.

Example #3:

A payment was due on January 1, 1998 but, you failed to make that payment and never made another payment. The Creditor waits until January 1, 2000 to take action adverse action on the debt. The 180 day count began on January 1, 98 (your last missed payment month) and runs until June 31, 98 at which time the seven (7) year reporting period begins.

How many of the 180 days were used? ALL of em. 1/1/98 to 6/31/98.

Try treating the calculation of the 7.5-year Obsolescence Period as a completely separate issue from the actual 7-year Reporting Period, (the time on your report). We should calculate the time first to determine how long it can legally remain on your report, complete with a â??Must Remove Byâ? date. In the above case the â??MUST Remove Dateâ? is June 31, 2005.

Now go back and insert the date when it was posted to your report. Treating these two time calculations as separate issues should help tremendously. Stated differently; FIRST calculate when the 7.5-year period begins and when it should expire, and THEN we will see the latest point at which it MUST be removed as obsolete.

The 180 days began counting on 1/1/98, and concluded on 6/31/98. At this point the 7 years is required to begin, (because the 7 years must begin "No Later Than" this date). Suppose this OC waited until today, (July 20, 2003) to finally take adverse action and reports your TL to the CRA, who then, immediately posts it. How much longer can the negative TL remain on your report? From 7/20/2003 to 7/1/2005. Not quite 2 years. Why? Because the days between the expiration of the 180 days (7/1/98) and the date at which they posted it (July 20, 2003) are TOLLED against the 7-year reporting period. They LOSE that time on your CR.

Hereâ??s the most critically important thing to remember regarding this entire conversation. This whole 180-day mystery will apply only if/when the CRA needs to avail itself of the flexibility provided by it, because the DF failed to provide correct information, or none at all, as denoted in the Johnson Opinion footnote. Since DFâ??s are now extremely good at complying with 623 (5) (below) your 7 years will almost always begin the point of original delinquency. The 180 days will almost NEVER apply. Moreover, even if it did, you as a CreditNetter, know how to make them fix it.

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  § 623. Responsibilities of furnishers of information to consumer reporting agencies [15 U.S.C. § 1681s-2]
  
  (5) â?¦ not later than 90 days after furnishing the information, notify the agency of the month and year of the commencement of the delinquency that immediately preceded the action.

As Crofttk so succinctly puts it;

To state categorically that the reporting period is 7 years plus 180 days in duration is almost ALWAYS a non-applicable, â??Patently Absurd Conclusionâ? of the highest order. Absurdity, youâ??ll recall, is the third in the 3 Cannons of Statutory Constructive Interpretation which we are commanded to avoid.

Continued:

 

Continued:

In Conclusion:

To insist that any of this stuff is "crystal clear", or that we ought not mince words, is to misunderstand, at the outset, the complex nature of Modern American Jurisprudence, as it spirals ever downward into a cesspool of mind numbing complexity. Our Internal Revenue Code is now 45,000+ pages long - IN FINE PRINT!

Fortunately Consumer Protection Law isn't quite that bad, NOT YET.

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The more corrupt the state, the more numerous the laws. - Tacitus (55-117 A.D.) ******************************************************

One time I told Bill Bauer (in my Validation Thread) that I didn't mind being wrong, if in fact I am. But to simply scream ones opinion over and over again, from the rooftops, without backing it up with detailed research is merely that, opinion. And you know what they say about opinions.

I also told Bauer that those on this board are quite capable, and will study carefully each persons research and draw their own conclusions about who "gets it" and who doesn't, so if he insisted on making vacuous claims without backing them up he would forever lose his arguments.


This is also a good place to remind everyone that the vast majority of this stuff has never even been litigated in court. It's too new. We might ALL be right, and yet ALL be wrong. I went to exactly the same law school as did my good friend and esteemed colleague LKH, Wal Mart.

So we ought not to be too tough on each other. Getting to a full understanding of how to interpret what we read in today's law, Congressional Testimony, US Code, CFR, etc., etc., (add nausea) is difficult to say the very least. We should all forgive and be gentle with each other for making the innocent mistakes of a layperson, and a little less quick to proclaim someone else "Dead Wrong", or a "Troll", or whatever.


If you ever do run into a judge or an attorney that tells you the 180 days is fixed, not flexible, you can not only tell him/her to POUND SAND, but you can also tell em exactly why.

Proving yet again, CreditNet remains on the cutting edge of modern day Credit Correction Technology.


Oh - And remember ->

When the law is against you, argue the facts. When the facts are against you, argue the law. When both are against you, discredit your opponent.
..................... (R. Rinkle)





(Kudoâ??s to the Foxy Mrs. Butch, who helped tremendously with research)

************************************************************

 

Thanks Sassy,

I was going to add that but decided I was already waaaay too long.

 

It's not at all hard to be confused over this one FedUp.


FCRA REQUIRES a DF to report the date of the "commencement of the delinquency immediately preceding the negative action" to the CRA within 90 days. So for all practical purposes this is the date that they go by.

The 180 days would come into play ONLY if the DF neglected to follow the above requirement by providing the incorrect info. or none at all. Since they are actually pretty good about it this these days, it's for the most part a nonapplicable issue.

I just didn't want people to think it would be on our report for 7 years plus 180 days. I've seen folks calculate from [for example] Jan, 2000 to July 2007, because of this stupid thing.

Even if they do screw it up and try to add more than 7 years, make em fix it.

Good question.