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Regular Session, 2012
HOUSE BILL NO. 782
BY REPRESENTATIVE CONNICK
CONTRACTS: Provides with respect to certain contracts for the collection and settlement
of debts as the practice of law
AN ACT1
To amend and reenact R.S. 37:212(A)(introductory paragraph), (1), and (2)(a) and (b) and2
to enact R.S. 37:212(A)(2)(e), (f), and (g), (3), and (E) and (F) and R.S.3
37:213(A)(8), relative to contracts for collecting or settling certain debts; to provide4
relative to definitions; to provide that certain activities related to debt settlement or5
collection shall be considered the practice of law; to provide for exceptions; and to6
provide for related matters.7
Be it enacted by the Legislature of Louisiana:8
Section 1. R.S. 37:212(A)(introductory paragraph), (1), and (2)(a) and (b) are hereby9
amended and reenacted and R.S. 37:212(A)(2)(e), (f), and (g), (3), and (E) and (F) and R.S.10
37:213(A)(8) are hereby enacted to read as follows: 11
§212. "Practice of law" defined12
A. The practice of law means and includes all of the following:13
(1) In a representative capacity, the appearance as an advocate, or the14
drawing of papers, pleadings, or documents, or the performance of any act in15
connection with pending or prospective proceedings before any court of record in16
this state; or.17
(2) For a consideration, reward, contingency fee, referral fee, commission,18
or any other pecuniary benefit, present or anticipated, however phrased or styled,19 HLS 12RS-1293 REENGROSSED
HB NO. 782
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whether direct or indirect;, through an intermediary or by means of a fee-splitting1
agreement or other arrangement for monetary compensation:2
(a) The advising or counseling of another as to secular law;, consumer debt3
settlement, consumer debt avoidance, or consumer debt defense.4
(b) In behalf of another, the drawing or procuring, or the assisting in the5
drawing or procuring of a court pleading, paper, document, or instrument affecting6
or relating to secular rights;, consumer debt settlement, consumer debt avoidance,7
or consumer debt defense.8
* * *9
(e) The advising of a debtor who is a Louisiana resident or domiciliary of10
any of the following:11
(i) To ignore, delay payment of, or not to pay at all, a legal debt or charge12
or any portion of the legal debt or charge.13
(ii) To file pleadings pro se or in proper person in any pending or prospective14
litigation or lawsuit.15
(iii) That a debt is illegal, unenforceable in a court of law, extinguished by16
a prescriptive or peremptive period, uncollectible, or subject to modification without17
the consent of the creditor.18
(iv) That he is subject to arrest or prosecution for the nonpayment of a civil19
court judgment.20
(f) After a lawsuit has been filed to foreclose a mortgage or to seize or21
recognize a lien on immovable property, advising a defendant who is a Louisiana22
resident or domiciliary of his options and alternatives for responding to the lawsuit23
or seizure, or otherwise dealing with or disposing of a lawsuit.24
(g) After a lawsuit has been filed to collect a consumer debt, preparing for25
or furnishing to, directly or indirectly, any pro se or in proper person pleadings in26
connection with the lawsuit.27
(3) For a profit or for any direct or indirect financial remuneration or28
consideration, to operate any service or program represented, directly or by29 HLS 12RS-1293 REENGROSSED
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implication, to renegotiate, settle, or in any way alter the terms of payment or other1
terms of the debt between a person and one or more unsecured creditors or debt2
collectors, including but not limited to a reduction in the balance, interest rate, or3
fees owed by a person to an unsecured creditor or debt collector.4
* * *5
E. Nothing in this Section shall prohibit a person directly employed by an6
attorney at law licensed in Louisiana, a professional legal association, legal7
corporation, or legal limited liability company, or a debt collector or collection8
agency whose activities are governed and regulated by the Fair Debt Collection9
Practices Act, 15 U.S.C. 1692 et seq., and which has registered as a collection10
agency with the Louisiana secretary of state as required by law, from attending to11
and caring for the business, claims, and demands of its clients against third parties12
for the payment of a lawful debt owed to its principal.13
F. Nothing in this Section shall prohibit an FDIC insured institution and its14
affiliates and subsidiaries from lawfully collecting debts owed pursuant to state and15
federal law, and from advising its customers on debt settlement, consolidation, or16
restructuring options for debts owed to such institutions.17
§213. Persons, professional associations, professional corporations, and limited18
liability companies entitled to practice law; penalty for unlawful practice19
A. No natural person, who has not first been duly and regularly licensed and20
admitted to practice law by the supreme court of this state, no corporation or21
voluntary association except a professional law corporation organized pursuant to22
Chapter 8 of Title 12 of the Revised Statutes, and no partnership or limited liability23
company except one formed for the practice of law and composed of such natural24
persons, corporations, voluntary associations, or limited liability companies, all of25
whom are duly and regularly licensed and admitted to the practice of law, shall:26
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(8) Operate any service or program represented, directly or by implication,28
to renegotiate, settle, or in any way alter the terms of payment or other terms of the29 HLS 12RS-1293 REENGROSSED
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debt between a person and one or more unsecured creditors or debt collectors,1
including but not limited to a reduction in the balance, interest rate, or fees owed by2
a person to an unsecured creditor or debt collector.3
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DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Connick HB No. 782
Abstract: Provides that conducting business under certain types of contracts, such as
contingency fee, referral fee, commission, and fee-splitting contracts, in order to
collect or settle consumer debts shall be considered practicing law.
Present law provides an extensive definition of the "practice of law" which provides, in part,
that the practice of law includes appearing in a representative capacity as an advocate, or the
drawing of papers, pleadings, or documents, or the performance of any act in connection
with pending or prospective proceedings before any court of record in this state, and
advising or counseling of another as to secular law for consideration, reward, or pecuniary
benefit.
Proposed law retains present law but also includes those activities listed in present law
pursuant to certain types of contracts, such as contingency fee, referral fee, commission, and
fee-splitting contracts. Further defines the "practice of law" to include the advising of a
debtor who is a La. resident or domiciliary on certain matters involving debt.
Present law provides, in part, that no natural person, who has not first been admitted to
practice law by the supreme court of this state, no corporation, no partnership, and no limited
liability company shall practice law, furnish attorneys to render legal services, or render or
furnish legal services or advice.
Proposed law provides that no natural person, who has not first been admitted to practice law
by the supreme court of this state, no corporation, no partnership, and no limited liability
company shall operate any service or program represented, directly or by implication, to
renegotiate, settle, or in any way alter the terms of payment or other terms of the debt
between a person and one or more unsecured creditors or debt collectors.
Provides that proposed law shall not prohibit a person directly employed by an attorney at
law licensed in La., certain professional legal entities, or a debt collector or collection
agency whose activities are governed and regulated by the Fair Debt Collection Practices
Act, 15 U.S.C. 1692 et seq., and which has registered as a collection agency with the La.
secretary of state as required by law, from attending to and caring for the business, claims,
and demands of its clients against third parties for the payment of a lawful debt owed to its
principal.
Provides that proposed law shall not prohibit an FDIC insured institution and its affiliates
from collecting debts owed pursuant to state and federal law, and from advising customers
on certain debt related issues.
(Amends R.S. 37:212(A)(intro. para.), (1), and (2)(a) and (b); Adds R.S. 37:212(A)(2)(e),
(f), and (g), (3), and (E) and (F) and 213(A)(8)) HLS 12RS-1293 REENGROSSED
HB NO. 782
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Summary of Amendments Adopted by House
Committee Amendments Proposed by House Committee on Civil Law and Procedure
to the original bill.
1. Added an exception relative to attorneys licensed to practice law in La. and debt
collectors or collection agencies regulated by the Fair Debt Collection Practices
Act.
2. Added technical amendments.
Summary of Amendments Adopted by House
House Floor Amendments to the engrossed bill.
1. Added persons directly employed by an attorney, certain professional legal
entities, and FDIC insured institutions and their affiliates to those excepted from
application of proposed law.