Say the card company’s own collection department calls you nine times on a Saturday, swears at you, and tells you you’ll be arrested if you don’t pay by Monday. Not a collection agency. Not a debt buyer. The bank whose name is on the card.
In Texas, that bank is a “debt collector”. The cursing and the arrest threat are on a list the Legislature wrote, and so are the calls if they’re meant to harass. Each violation is a misdemeanor, and you can sue for your damages and your lawyer’s fees. In Minnesota, the state’s own debt collection statute doesn’t apply to the bank at all. It says so in black and white.
This is the latest round of a series I started at /news/minnesota-vs-texas-wage-garnishment-571-922/, “Minnesota vs. Texas: who actually protects the debtor?” Texas wins this one. But the score’s closer than the headline, because Minnesota quietly built two doors in 2023 and 2024 that most people walk right past.
In Texas, the bank collecting its own account is a “debt collector”
The federal Fair Debt Collection Practices Act, the statute on every consumer website, covers people who collect debts “owed or due or asserted to be owed or due another.” 15 U.S.C. § 1692a(6). And it specifically leaves out “any officer or employee of a creditor while, in the name of the creditor, collecting debts for such creditor”. § 1692a(6)(A). So the bank’s own collector, calling in the bank’s own name, is outside federal collection law.
Texas wrote its definition differently. Its Debt Collection Act defines a “debt collector” as “a person who directly or indirectly engages in debt collection”. Tex. Fin. Code § 392.001(6). There’s a separate, narrower term for the federal kind: a “third-party debt collector” is “a debt collector, as defined by 15 U.S.C. Section 1692a(6)”. § 392.001(7). The Legislature knew how to say “third-party”. In most of the chapter, it didn’t.
The Texas courts read it the way it’s written. In 2015 a Houston appeals court looked at a mortgage servicer that argued it wasn’t a debt collector under federal law, and so not under Texas law either. The court quoted § 392.001(6) and said: “There are no statutory exceptions.” Lamell v. OneWest Bank, FSB, 485 S.W.3d 53, 63 (Tex. App.—Houston [14th Dist.] 2015, pet. denied). A Dallas court said the same thing about the predecessor statute back in 1996: “The Act also applies to entities attempting to collect their own debts.” Monroe v. Frank, 936 S.W.2d 654, 660 & n.8 (Tex. App.—Dallas 1996, writ dism’d w.o.j.). That case started with a bail bond company’s caller cursing at a man who was 81 by the time of trial, over a $1,000 check. Id. at 656–57.
The Supreme Court of Texas took on a bank in 1986
The best case on this is forty years old. On July 16, 1986, the Supreme Court of Texas decided Brown v. Oaklawn Bank, 718 S.W.2d 678 (Tex. 1986).
The facts are almost comic. A customer came in to close his savings account. The bank had forgotten to post a $7,150 garnishment withdrawal, so the teller tried to hand him $9,348 when the real balance was about $2,198. He told the teller that was too much. Two layers of bank management confirmed it, and somebody told him the difference was interest. He took the check. Id. at 679.
The next day the bank’s senior vice president wrote him that the bank and the district attorney were prepared to bring criminal charges. The district attorney wrote too, threatening a warrant. The district attorney was also an associate director of the bank. Id.
The trial court found no violation. The Supreme Court of Texas reversed, and held that “Oaklawn’s threats of criminal prosecution violate the Debt Collection Act as a matter of law.” Id. at 680. It said why the statute exists: “the Legislature passed the Debt Collection Act to prevent creditors from preying upon a consumer’s fears and ignorance of the law to pursue allegedly delinquent debts.” Id. And it said the bank’s good intentions didn’t matter: “Intent on the part of the wrongdoer is not a prerequisite to recovery under the Debt Collection Act.” Id.
Here’s the concession, and it’s a real one. The bank still got its money back. The same opinion held Oaklawn “is entitled to restitution of the funds paid to Brown in excess of the correct closing balance.” Id. at 681. The statute doesn’t erase what you owe. It controls how they come get it.
Brown and Monroe construed the old article 5069-11 of the civil statutes. The Legislature moved that act into chapter 392 of the Finance Code effective September 1, 1997. Ford v. City State Bank of Palacios, 44 S.W.3d 121, 135 n.7 (Tex. App.—Corpus Christi 2001, no pet.). Lamell applied the codified definition.
What a Texas card company can’t do on the phone
Four sections, thirty-four numbered practices. Tex. Fin. Code §§ 392.301–.304. The ones a cardholder actually runs into:
- No arrest threats. A debt collector may not threaten “that the debtor will be arrested for nonpayment of a consumer debt without proper court proceedings”, or accuse someone falsely of fraud or any other crime. § 392.301(a)(2), (5).
- No swearing. No “profane or obscene language or language intended to abuse unreasonably the hearer or reader”. § 392.302(1).
- No phone barrage. No “causing a telephone to ring repeatedly or continuously, or making repeated or continuous telephone calls, with the intent to harass a person at the called number.” § 392.302(4). Note the intent requirement. Nine calls isn’t automatically a violation; nine calls meant to wear you down is.
- No made-up fees. No collecting interest or a fee unless it’s “expressly authorized by the agreement creating the obligation or legally chargeable to the consumer”. § 392.303(a)(2).
- No lying about the balance. No “misrepresenting the character, extent, or amount of a consumer debt”. § 392.304(a)(8).
And here’s my favorite. A debt collector has to go by its own true name or, while it’s collecting a credit card debt, the “name appearing on the face of the credit card”. § 392.304(a)(1). That one binds the agencies too. But you don’t write a rule about the name on the card unless you’re thinking about card companies.
The Legislature also cut card companies one break: the rule requiring a collector to disclose who the debt is owed to doesn’t apply to “a person servicing or collecting real property first lien mortgage loans or credit card debts.” § 392.304(b). Even Texas has a lobby.
And a creditor can’t launder abuse through a vendor. It “may not use an independent debt collector if the creditor has actual knowledge that the independent debt collector repeatedly or continuously engages in acts or practices that are prohibited by this chapter.” § 392.306.
Is it really a crime in Texas?
Yes. “Except as provided by Subsection (d), a person commits an offense if the person violates this chapter.” Tex. Fin. Code § 392.402(a). It’s “a misdemeanor punishable by a fine of not less than $100 or more than $500 for each violation”, and the charge has to be filed within a year. § 392.402(b), (c). The only carve-out, subsection (d), is the time-barred-debt section, § 392.307, which applies to debt buyers.
Nothing in § 392.402 exempts a bank. A card company’s collector who curses at a cardholder in Austin is committing a misdemeanor under the plain words of the statute. Whether a county attorney will ever charge one is a different question, and I’d bet against it. But the line is drawn.
What can a Texan actually recover?
Less than you’d guess from that list, and more than a Minnesotan gets.
Section 392.403 lets “a person” sue for an injunction and for “actual damages sustained as a result of a violation of this chapter.” § 392.403(a). A winning plaintiff “is entitled to attorney’s fees reasonably related to the amount of work performed and costs.” § 392.403(b). That fee sentence is the whole ballgame in a consumer case. It’s what makes a $2,000 claim worth a lawyer’s time.
There’s no statutory minimum for most of it, including the unfair-means section, § 392.303. A $100-per-violation floor applies only to violations of three provisions: the bond requirement, the file-correction rules, and § 392.301(a)(3), which bars telling third parties you’re “wilfully refusing to pay” a debt you’ve disputed in writing. § 392.403(e). Everything else is actual damages. In Brown, the Supreme Court of Texas treated the customers’ testimony that they were “seriously upset”, lost sleep, and missed work as some evidence of damages and sent the case back to measure them. 718 S.W.2d at 680–81.
The fees cut both ways. If a court finds a suit “was brought in bad faith or for purposes of harassment, the court shall award the defendant attorney’s fees reasonably related to the work performed and costs.” § 392.403(c). And there’s a bona fide error defense for a mistake made in spite of reasonable procedures. § 392.401.
The DTPA door
Then Texas bolts on its consumer-protection statute. “A violation of this chapter is a deceptive trade practice under Subchapter E, Chapter 17, Business & Commerce Code, and is actionable under that subchapter.” § 392.404(a). That subchapter lets the factfinder award “not more than three times the amount of economic damages” for conduct committed knowingly, and a prevailing consumer “shall be awarded court costs and reasonable and necessary attorneys’ fees.” Tex. Bus. & Com. Code § 17.50(b)(1), (d). When another law grants the right to sue under the subchapter, the claimant isn’t limited to economic damages, may recover actual damages, and the trier of fact may award up to three times actual damages “in accordance with that subsection.” § 17.50(h). On my reading, § 392.404(a) is exactly the other law subsection (h) was written for. “May” is the operative word. Treble damages aren’t automatic.
The DTPA brings its own fine print: 60 days’ written notice before a damages suit, unless the claim comes in as a counterclaim or the deadline is about to run, § 17.505(a), (b), and a two-year limitations period, § 17.565.
Both states make the collection industry post a bond, and neither makes the bank post one. A Texas third-party debt collector can’t collect at all without a $10,000 surety bond on file with the secretary of state, in favor of anyone damaged by a violation. Tex. Fin. Code § 392.101(a)–(c). The rule says “third-party debt collector or credit bureau”. Minnesota asks for more. Every licensee, which means every collection agency and debt buyer, has to keep a corporate surety bond of “at least $50,000”, plus more as its Minnesota collections grow, and “The total amount of the bond shall not exceed $100,000.” Minn. Stat. § 332.34; § 332.31, subd. 3. The card company doesn’t post one in either state.
Minnesota’s collection law stops at the bank’s front door
Minnesota does have a collection statute, and I walked through its licensing system and its 24 prohibited practices at /news/minnesota-debt-collection-practices/. I won’t repeat it. The point here is who it reaches.
A “collection agency” is a person collecting “for others”, or a debt buyer. Minn. Stat. § 332.31, subd. 3. Then the exclusions. The term “collection agency” does not include “banks when collecting accounts owed to the banks and when the bank will sustain any loss arising from uncollectible accounts”, and it doesn’t include credit unions either. § 332.32(a). The prohibited-practices list opens “No collection agency, debt buyer, or collector shall:” and stops there. § 332.37(a).
So the bank collecting its own card balance isn’t a collection agency, isn’t a debt buyer, and its employees aren’t “collectors” acting under a collection agency’s authority. Chapter 332 doesn’t regulate how it collects. And even when chapter 332 does apply, it’s enforced by the Attorney General, county attorneys, and the Commerce Commissioner, §§ 332.39, 332.40, not by you. And chapter 332 isn’t among the laws § 8.31, subd. 1 names. That list is written “specifically, but not exclusively,” so whether a chapter 332 violation carries the private attorney general remedy in subd. 3a is a fight, not a given.
Minnesota’s robocall statute has the same blind spot. The rule against automatic dialing-announcing devices doesn’t apply to “messages to subscribers with whom the caller has a current business or personal relationship”. Minn. Stat. § 325E.27(b)(2). A card company calling its own cardholder looks a lot like that.
I couldn’t find a Minnesota statute that regulates how a bank collects its own credit card debt and lets the cardholder sue over it. I read chapter 332’s definitions, exclusions, and prohibitions, the § 8.31 list, chapter 332C, and the robocall statute. The one exception is narrow. Minnesota’s coerced-debt law defines a “creditor” as anyone “claiming to own or have the right to collect a debt owed by the debtor”, so it does reach the card company. § 332.71, subd. 3. But it only decides whether you owe a debt someone forced on you, and what it hands you is a court order, a declaration and an injunction, not damages. §§ 332.73, subd. 1(b); 332.74, subds. 1, 3(a). I covered it at /news/minnesota-coerced-debt-332-71/. Otherwise the pattern is consistent: Minnesota regulates the collection industry, and the original creditor isn’t the collection industry.
Minnesota wrote the strong version. For hospital bills.
This one surprised me. In 2024 Minnesota passed a collection remedy that beats Texas’s on damages, and then fenced it off for medical debt.
Chapter 332C reaches any “collecting party”, defined as “a party engaged in collecting medical debt”. Minn. Stat. § 332C.01, subd. 2. That’s the hospital collecting its own bill, not just an agency. A collecting party that violates the chapter “is strictly liable to the debtor” for actual damages, “additional damages as the court may allow, but not exceeding $1,000 per violation”, and costs and a reasonable attorney fee. § 332C.05(b). Strict still leaves two outs. A collecting party isn’t liable if it shows by a preponderance of the evidence that the violation was an unintentional bona fide error made in spite of reasonable procedures, or came from inaccurate information supplied by a health care provider, a health carrier, or another collecting party. § 332C.05(g). Texas has the first of those. § 392.401. Willful and malicious violations get three times the damages. § 332C.05(c). The $1,000 cap moves with the Consumer Price Index every even-numbered year. § 332C.05(d).
Per violation. Strict liability. Texas has nothing like that for a card company. It has actual damages and a $100 floor on three provisions.
But put the same hospital bill on a general-purpose Visa and, as I explained at /news/minnesota-medical-debt-fairness-act/, it stops being medical debt. Minnesota built the right tool and handed it to one aisle of the store.
So can a Minnesotan sue the card company at all?
Maybe. The door is the Consumer Fraud Act, and it opened wider in 2023 than most people realize.
The Act forbids “any fraud, unfair or unconscionable practice, false pretense, false promise, misrepresentation, misleading statement or deceptive practice, with the intent that others rely thereon in connection with the sale of any merchandise”. Minn. Stat. § 325F.69, subd. 1. “Merchandise” includes “loans”. § 325F.68, subd. 2. The words “unfair or unconscionable practice” came in by 2023 Minn. Laws ch. 57, art. 4, § 16, and a new subdivision defines them to include any practice that “is unethical, oppressive, or unscrupulous” or “is substantially injurious to consumers.” § 325F.69, subd. 8. That’s language a court could apply to a 6:30 a.m. call.
The same year, the Legislature gave consumers their own damages action. A consumer injured by a violation “in connection with a sale of merchandise for personal, family, household, or agricultural purposes” may sue for damages, costs, and reasonable attorney fees, and “An action brought under this section benefits the public.” § 325F.70, subd. 3(a). That last sentence matters. Before it, a private plaintiff had to go through § 8.31, subd. 3a, where the Minnesota Supreme Court held the remedy “applies only to those claimants who demonstrate that their cause of action benefits the public.” Ly v. Nystrom, 615 N.W.2d 302, 314 (Minn. 2000). The new subdivision is “effective August 1, 2023, and applies to causes of action commenced on or after that date.” 2023 Minn. Laws ch. 52, art. 19, § 15. I covered how it works at /news/minnesota-consumer-fraud-act-deceptive-trade-practices/, and the Ly problem it routes around at /news/minnesota-private-attorney-general-831/.
The question I couldn’t find answered
Here’s the catch, and it’s in five words: “in connection with the sale”. The card was sold years ago. Is the collection call “in connection with” it?
Minnesota’s Attorney General has already run this play against a card bank. The state sued Cross Country Bank, a Delaware-based subprime card issuer, and the company that collected its accounts, under the Consumer Fraud Act, the Deceptive Trade Practices Act, the robocall statute, and the privacy tort. State ex rel. Hatch v. Cross Country Bank, Inc., 703 N.W.2d 562, 565–66 (Minn. Ct. App. 2005). The affidavits described collectors calling people “idiot,” “thief,” and “liar”, calling homes “as early as 6:30 a.m. and as late as 11:00 p.m.”, and one identifying himself as “Adam Dunn, Director of Federal Fraud Investigations”. Id. at 566–67. In September 2005 the court of appeals upheld a temporary injunction under the three statutes. Id. at 574–75.
But read the sentence that made that easy: “Appellants do not dispute that they are subject to the above-cited statutes”. Id. at 573. The bank never argued that collection falls outside “in connection with the sale”, so the court never decided it. I couldn’t find a published Minnesota appellate decision that has. I searched CourtListener’s Minnesota appellate opinions under several phrasings and the Caselaw Access Project archive, and the only hit on point was Cross Country Bank itself.
So a Minnesotan has an argument the Texan doesn’t need. A Texan points to § 392.001(6). A Minnesotan has to win a statutory-interpretation fight first.
Two other doors, both narrow
The common law. Minnesota recognized the tort of intrusion upon seclusion in 1998. Lake v. Wal-Mart Stores, Inc., 582 N.W.2d 231, 235 (Minn. 1998). It reaches an intentional intrusion that “would be highly offensive to a reasonable person.” Id. at 233. It applies to anybody, bank included, and the Attorney General pleaded it against Cross Country Bank. 703 N.W.2d at 566. The bar is high.
Federal robocall law. The Telephone Consumer Protection Act applies to “any person”, creditor or not. It bars calls to a cell phone using an automatic telephone dialing system “or an artificial or prerecorded voice” without “the prior express consent of the called party”, and lets you sue for actual loss or “$500 in damages for each such violation, whichever is greater,” up to three times that if the violation was willful or knowing. 47 U.S.C. § 227(b)(1)(A)(iii), (b)(3). It’s about how they call, not what they say. A live collector who curses at you on a hand-dialed call is outside it.
The scorecard
Texas. Not close on the statute, closer on the outcome.
Texas wrote a collection law that names the card company as a debt collector, lists thirty-four things it can’t do, makes each violation a misdemeanor, pays a winning cardholder’s lawyer, and plugs into a consumer statute that allows treble damages. Its Supreme Court applied the statute’s predecessor against a bank in 1986. The caveat: the chapter 392 remedy itself is actual damages and fees, and treble damages come only through the DTPA door, with its own notice and its own clock.
Minnesota regulates the collection industry and exempts the bank. What it gives you against the card company is the Consumer Fraud Act’s 2023 private action, which is strong if a court agrees that a collection call is “in connection with the sale”, and no Minnesota appellate court I could find has said whether it is. It also has a privacy tort with a high bar, and federal law adds the robocall statute. And it has a strict-liability, $1,000-per-violation remedy that would make a Texas lawyer jealous, for medical bills only.
Minnesota already wrote the right sentence. It just wrote it for hospitals.
I covered the larger pattern, a state that talks like a consumer advocate on card debt and keeps the machinery that collects it, at /news/minnesota-credit-card-debt-garnishment-arbitration-forum-pocket-service/.
Madgett Law, LLC
Madgett Law, LLC represents Minnesotans in debt collection disputes: FDCPA claims, defense of collection lawsuits, credit reporting fallout, and coerced debt. We also help people look at what’s exposed and what isn’t before a judgment narrows the options; more on that is on our distressed asset protection page. If the card company itself is the one calling, keep a log of every call and every letter, because whichever statute fits, it gets proved with documents. Then send us a message.
Sources: Tex. Fin. Code § 392.001(3), (5)–(7) (definitions; “debt collector”; “third-party debt collector”); § 392.101(a)–(c) (third-party collector and credit bureau bond, $10,000); § 392.301(a)(2), (3), (5) (threats or coercion); § 392.302(1), (4) (harassment; abuse); § 392.303(a)(2) (unauthorized interest and fees); § 392.304(a)(1), (a)(8), (b) (misrepresentations; true name or credit card name; card-debt exception to (a)(4)); § 392.306 (use of independent debt collector); § 392.307 (debt buyers; time-barred debt); § 392.401 (bona fide error); § 392.402(a)–(d) (criminal penalty); § 392.403(a)–(c), (e) (civil remedies); § 392.404(a) (DTPA); Tex. Bus. & Com. Code § 17.50(b)(1), (d), (h) (DTPA relief; additional damages; fees; claims granted by other law); § 17.505(a), (b) (pre-suit notice); § 17.565 (limitation) (Texas Constitution and Statutes, Texas Legislative Council). Brown v. Oaklawn Bank, 718 S.W.2d 678, 679–81 (Tex. 1986); Lamell v. OneWest Bank, FSB, 485 S.W.3d 53, 63 (Tex. App.—Houston [14th Dist.] 2015, pet. denied); Monroe v. Frank, 936 S.W.2d 654, 656–57, 660 & n.8 (Tex. App.—Dallas 1996, writ dism’d w.o.j.); Ford v. City State Bank of Palacios, 44 S.W.3d 121, 135 n.7 (Tex. App.—Corpus Christi 2001, no pet.) (codification of art. 5069-11 in ch. 392). Minn. Stat. § 332.31, subd. 3 (collection agency); § 332.32(a) (exclusions, including banks collecting their own accounts and credit unions); § 332.34 (licensee surety bond); § 332.37(a) (prohibited practices); § 332.39 (injunctions); § 332.40, subd. 1 (license suspension and revocation); § 8.31, subd. 1 (laws enforced), subd. 3a (private remedies); § 325E.27(a), (b)(2) (automatic dialing-announcing devices; business-relationship exemption); § 325E.31(a) (remedies); § 325F.68, subd. 2 (merchandise includes loans); § 325F.69, subd. 1, subd. 8 (unlawful practices; unfair or unconscionable acts defined); § 325F.70, subd. 3 (consumer private action; public benefit); § 332C.01, subd. 2 (collecting party); § 332C.05(b)–(d), (g) (strict liability; additional damages up to $1,000 per violation; treble for willful and malicious violations; inflation adjustment; bona fide error and inaccurate-information defenses); § 332.71, subd. 3 (coerced debt; creditor); § 332.73, subd. 1(b) (creditor’s 30-day response); § 332.74, subds. 1, 3(a) (debtor’s petition; declaratory and injunctive relief) (Minnesota Office of the Revisor of Statutes). 2023 Minn. Laws ch. 52, art. 19, § 15 (adding § 325F.70, subd. 3, effective August 1, 2023, for causes of action commenced on or after that date); 2023 Minn. Laws ch. 57, art. 4, §§ 16–17 (adding “unfair or unconscionable practice” and § 325F.69, subd. 8). State ex rel. Hatch v. Cross Country Bank, Inc., 703 N.W.2d 562, 565–67, 573–75 (Minn. Ct. App. 2005); Lake v. Wal-Mart Stores, Inc., 582 N.W.2d 231, 233, 235 (Minn. 1998); Ly v. Nystrom, 615 N.W.2d 302, 314 (Minn. 2000) (Caselaw Access Project). 15 U.S.C. § 1692a(6), (6)(A) (FDCPA “debt collector”; creditor-employee exclusion); 47 U.S.C. § 227(b)(1)(A)(iii), (b)(3) (TCPA; private right of action) (United States Code, 2024 ed., govinfo). This article is general legal information about Minnesota law, with Texas and federal law for comparison. It is not legal advice, reading it does not create an attorney–client relationship, and no outcome is promised or implied.