In Peters v. Financial Recovery Services, Inc., here, Judge Fenner held that although TILA may prohibit a creditor –and hence, it’s debt collector – from charging post-charge-off interest, neither TILA nor the FDCPA prohibit the debt collector from charging state statutory pre-judgment interest after charge-off.
Defendant’s final basis for dismissal is that even if GE waived the right to contractual interest, it retained the right to charge Plaintiff statutory interest post charge-off. (Doc. # 22, pp. 3-4). Missouri law provides for a statutory interest rate of nine percent per year when no other rate is agreed upon. Mo. Rev. Stat. § 408.020. Courts have held that creditors are entitled to charge post charge-off interest at a state’s statutory interest rate even if interest was waived at the contractual rate. See Grochowski v. Daniel N. Gordon, P.C., No. C13-343 TSZ, 2014 WL 1516586, at *3 (W.D. Wash. Apr. 17, 2014) (holding that a charge-off does not operate to waive interest at the state statutory rate); Stratton v. Portfolio Recovery Associates, LLC, Civil Action No. 5:13-147-DCR, 2013 WL 6191804, at *4 (E.D. Ky. Nov. 26, 2013) (“[The defendant]’s request for statutory prejudgment interest . . . from the date that [the plaintiff]’s account was charged-off was not improper.”). Plaintiff’s argues that Defendant was prohibited from charging interest at the statutory rate because Truth in Lending Act (“TILA”) forbids charging any post charge-off interest. (Doc. # 24, p. 6). Even assuming that TILA does prevent post charge-off interest at both the statutory and the contractual rate, TILA does not apply in this situation. Defendant, a debt collector, charged the post charge-off interest. (First Amended Complaint ¶¶ 4, 10). However, TILA only applies to “creditors” which refers only to: “a person who both (1) regularly extends . . . consumer credit . . . and (2) is the person to whom the debt arising from the consumer credit transaction is initially payable. . . .” 15 U.S.C. § 1602(g). Thus, Defendant does not fit within that definition and is not subject to TILA because Defendant is a debt collector and not the person to whom the debt was originally payable. See also Kellar v. Fin. Recovery Servs., Inc.,1:12-CV-097, 2014 WL 129239, at *5 (D.N.D. Jan. 9, 2014) (finding that TILA’s requirements did not apply to debt collectors and therefore could not be the basis of a claim); Lee v. Northland Grp., No. 02 C 6083, 2003 WL 25765398, at *1 (N.D. Ill. Apr. 24, 2003) (dismissing the plaintiff’s claim against the defendant because the claim was based on a TILA violation and the defendant was not a creditor within the meaning of 15 U.S.C. § 1602(g)). Thus, if the interest was charged by Defendant at the statutory rate Plaintiff’s First Amended Complaint fails to state a claim upon which relief may be granted. Plaintiff’s Complaint does not specify whether the interest charged was at the statutory or at the contractual rate. (See generally First Amended Complaint). As noted above, it is Plaintiff’s responsibility to plead facts sufficient to state a claim “that is plausible on its face” and would entitle her to the relief requested. See Twombly, 550 U.S. at 570. Moreover, to survive a motion to dismiss, Plaintiff must have adequately asserted facts to support her claim. See Whitney v. Guys, Inc., 700 F.3d 1118, 1129 (8th Cir. 2012). Plaintiff has not adequately asserted facts to support her claim because she has not specified that the type of interest charged was at the contractual rate. Thus, Plaintiff has failed to state a claim for relied upon which relief may be granted and her claim must be dismissed.