Cracking Down on Abusive Debt Collectors

The Consumer Financial Protection Bureau must stop this national crisis.
— by

LeeAnn Hall

Have you ever picked up your phone to find an aggressive voice on the other end demanding payments on a debt you know nothing about? You’re far from alone.

Once you’re in the sights of a debt collector, the impact on your life can be devastating: Your wages can be garnished and your credit ruined. You might lose your driver’s license, or even your job.

And it could happen over a debt you don’t even owe.

In a recent analysis of 75,000 complaints about debt collection practices submitted to the Consumer Financial Protection Bureau (CFPB) — just a sample of the total number — this was the most common complaint by far. Over 40 percent of people being harassed by collectors said they didn’t owe the debt in the first place.

Other complaints charged that the collectors made false statements or threats to coerce people to pay.

Man_speaking_mobile_phone_debt_collectors
Wikipedia

The government created the Consumer Financial Protection Bureau, as part of the Dodd-Frank financial reform to address abusive financial practices after the 2008 financial crash and while the Congress was still in Democratic hands.  Since Republicans have taken over both Houses, they’ve tried to hobble or repealThis year, the bureau is considering strengthening rules to protect consumers from deceptive and aggressive collection practices.

Abusive collection tactics impact people with all kinds of debt — including credit card debt, medical debt, payday loans, student loans, mortgages, and automobile loans. Collectors often strike when people are most vulnerable, such as when they’re recovering from illness or desperately seeking work. They aggressively target the poor, immigrants, and people of color.

About 77 million people — or 35 percent of adults in the United States with a credit file — have a report of debt in collections. That alone makes a compelling case for the bureau to crack down on abusive tactics.

When my organization, the Alliance for a Just Society, analyzed the complaints for our new reportUnfair, Deceptive, & Abusive: Debt Collectors Profit from Aggressive Tactics — we tallied the complaints in the database and built a list of the 15 companies with the most complaints.

The list is topped by heavy-hitting debt buyers like Encore Capital Group and PRA Group, whose business models hinge on buying portfolios of consumer debts for pennies on the dollar and then wringing payments out of alleged debtors. Both of these companies more than doubled their profits from 2010 to 2014.

Major student loan servicer Navient (formerly Sallie Mae) also makes the top 15 list for complaints about its debt collection tactics.

But it’s particularly worth noting that six out of the top 15 offenders on this list are original creditors, not third-party collectors. They include Citibank, JPMorgan Chase, Capital One, Wells Fargo, Bank of America, and Synchrony Financial (the largest issuer of private label credit cards).

This is important, because the primary protection most consumers have against unfair collection tactics — the federal Fair Debt Collection Practices Act — applies only to third parties, not original creditors. This is a troubling double standard.

The new rules must also to apply to the original creditors — including payday lenders, credit card companies, and big banks — along with third-party collectors and debt buyers.

The rules should limit phone calls to prevent harassment and require collectors to have complete documentation before attempting to collect. The rules should prohibit selling, purchasing, and attempting to collect old, paid, or expired “zombie” debt.

Finally, the bureau should toughen the penalties for collectors breaking the rules.

Living with debt isn’t a personal failing — it’s a national crisis. The bureau needs to stand up for everyday people and put a stop to abusive collection tactics.


LeeAnn Hall is the executive director of Alliance for a Just Society, a national research, policy, and organizing network working for economic, racial, and social justice. AllianceForAJustSociety.org Distributed by OtherWords.org

Advertisements

If This is What it Means to be “Conservative” — I’m Proudly a Bleeding Heart Liberal

Clearly, members of the GOP in the House are all about looking for ways to handicap ANY organization tasked with performing regulatory actions that might impede their ideological plans for the future of the United States of Republica.  A case in point is this recent  press release from Representative Amodei’s office.  My comments are in blue italics at various points throughout his release.  Some original text has been highlight in RED for emphasis.

Amodei: Appropriations Financial Services bill reins in IRS, ACA and Dodd Frank

Wednesday June 18, 2014

FOR IMMEDIATE RELEASE                                 Contact:    Brian Baluta, 202-225-6155

WASHINGTON, D.C. – The House Financial Services and General Government Appropriations Subcommittee today passed its fiscal year 2015 bill, which would provide annual funding for the Treasury Department, the Judiciary, the Small Business Administration, the Securities and Exchange Commission and several other agencies.

The bill totals $21.3 billion in funding for these agencies, which is $566 million below the fiscal year 2014 enacted level and $2.3 billion below the president’s request for these programs.The legislation prioritizes programs critical to enforcing laws, maintaining an effective judiciary system and helping small businesses, while targeting lower-priority or poor-performing programs – such as the Internal Revenue Service – for reductions.

Well now, that makes just a ton of sense.  IRS is tasked with collecting revenue necessary for the operation of various government operations … so let’s under fund them so we can then make a scapegoat of them when they can no longer effectively perform their regulatory and tax-collecting functions.

“Every day, I am asked, ‘Why don’t you do something?’ This bill ‘does something’ by removing funding from executive agencies that have become political tools of the administration,” said Amodei.   

Bill highlights:

Internal Revenue Service (IRS)– Included in the bill is $10.95 billion for the IRS – a cut of $341 million below the fiscal year 2014 enacted level and $1.5 billion below the President’s budget request. This will bring the agency’s budget below the sequester level and below the level that was in place in fiscal year 2008. This funding level is sufficient for the IRS to perform its core duties, including taxpayer services and the proper collection of funds, but will require the agency to streamline and make better use of its budget.

Interesting! They continually carp about the IRS not providing for an EMAIL BACKUP strategy as part of their business plan. Server BACKUPs are NOT FREE!  How much more will they stop BACKING UP because they no longer have sufficient funding to do their tax collection duties, let alone ancillary functions like BACKUPS, SYSTEM UPDATES, SOFTWARE IMPROVEMENTS, etc.?

In addition, due to the inappropriate actions by the IRS in targeting groups that hold certain political beliefs, as well as its previous improper use of taxpayer funds, the bill includes the following provisions:

Here we go again, perpetuating the falsehood that ONLY right-wing political groups were scrutinized, when it was actually liberal groups that were denied with some that had already been given tax-exempt status seeing that status revoked (e.g., EmergeAmerica affiliated groups).  NO politically-focused groups should be receiving TAX-EXEMPT 501(c)(4) status, PERIOD!

A prohibition on a proposed regulation related to political activities and the tax-exempt status of 501(c)(4) organizations. The proposed regulation could jeopardize the tax-exempt status of many non-profit organizations and inhibit citizens from exercising their right to freedom of speech, simply because they may be involved in political activity.

Sorry, but I don’t get to deduct my “freedom of speech” contributions to political endeavors.  Thus, NO politically-focused organizations should be able to have a free of tax right to free speech at the American Taxpayer’s expense!

A prohibition on funds for bonuses or awards unless employee conduct and tax compliance are given consideration.

A prohibition on funds for the IRS to target groups for regulatory scrutiny based on their ideological beliefs.

Congress passed a law that clearly states that to be considered 501(c)(4) organization, your activities must be EXCLUSIVELY-FOCUSED on “Social Welfare” activities.  Politically-focused activities are NOT social-welfare activities and thus, it IS the IRS’s responsibility to scrutinize and deny tax-exempt status to ANY organization (conservative, liberal or otherwise) not meeting that exclusivity provision.

A prohibition on funds for the IRS to target individuals for exercising their First Amendment rights.

More BS related to the previous proviso — the IRS is NOT prohibiting ANYONE from exercising their free speech.  The IRS is merely and rightfully determining whether a group is a group exclusively devoted to providing SOCIAL-WELFARE opportunities/activities and thus, whether that group is entitled to TAX-EXEMPT status!

A prohibition on funding for the production of inappropriate videos and conferences.

Really?  Oh, please, pray tell, what “inappropriate videos” might it be that the IRS is producing?

A prohibition on funding for the White House to order the IRS to determine the tax-exempt status of an organization.

Again, if you want to allow any organization wanting to conduct EXCLUSIVELY politically focused activities to never have to pay taxes, well then, you need to REPEAL the law that PROHIBITS them from being tax exempt!  You cannot have a LAW on the books that says one thing and then prohibit the IRS, which is responsible for administering that section of the law, from enforcing it!

A requirement for extensive reporting on IRS spending.

Affordable Care Act (ACA) –The bill also includes provisions to stop the IRS from further implementing ObamaCare, including a prohibition on any transfers of funding from the Department of Health and Human Services to the IRS for ObamaCare uses, and a prohibition on funding for the IRS to implement an individual insurance mandate on the American people.

Well, let’s see.  We elected President Obama and a Democratic Congress to get health care reform. Then, the Republican propaganda machine bought a Republican House.  Despite their efforts to gerry-rig the system, we still re-elected President Obama. Health care reform is one of the hardest things we’ve ever worked on. But no matter, they just keep trying to either LIE ABOUT REPEAL or DEFUND access to healthcare for the American People despite its need or popularity.

Securities and Exchange Commission (SEC)– Included in the bill is $1.4 billion for the Securities and Exchange Commission (SEC), which is $50 million above the fiscal year 2014 enacted level and $300 million below the President’s budget request. The increase in funds is targeted specifically toward critical information technology initiatives. The legislation also includes a prohibition on the SEC spending any money out of its “reserve fund” – essentially a slush fund for the SEC to use without any congressional oversight.

In addition, the legislation contains requirements for the Administration to report to Congress on the cost and regulatory burdens of the Dodd-Frank Act, and a prohibition on funding to require political donation information in SEC filings.

My my, lookie here — looks like an increase in funding.  But wait, isn’t this the organization that’s supposed to regulate Wall Street?  It’s a shame that the increase in funding is just for a bit of information technology so they can determine how their GOP-Donor base is affected by any sort of regulation.  It’s also despicable that they’ve included a proviso that PROHIBITS any reporting of information as to Corporate political donations.  If you and I donate, our freedom of speech is broadcast for all to see … but the Republican Donor-base has a special privileged secreted freedom of speech.  Apparently the Republicans believe their Donors are free to speak with their Dollars, but the general American public is underserving of being able to speak with their dollars in response.

Consumer Financial Protection Bureau (CFPB)– The bill includes a provision to change the funding source for the CFPB from the Federal Reserve to the congressional appropriations process, starting in fiscal year 2016. Currently, funding for this agency is provided by mandatory spending and is not subject to annual congressional review. This change will allow for increased accountability and transparency of the agency’s activities and use of tax dollars. The legislation also requires extensive reporting on CFPB activities.

The Republicans have done EVERYTHING conceivably possible to handicap, repeal, defund and decapitate the Consumer Financial Protection Bureau (CFPB).  This is yet their latest attempt to defund and cripple any and all Consumer financial protection at the behest of their Donor-base.

The President’s Housing Plan–What You Need to Know

The White House

President Obama took Wednesday morning to answer your questions on housing during an online interview, and it’s worth a watch. It’s part of his push for a more secure foundation for middle-class home ownership.

We want to make sure you’ve got the facts about President Obama’s plan, and the resources that are already available for homeowners.

Here’s what you need to know:  The President’s plan involves simple, commonsense steps that folks on both sides of the aisle agree on. That means making it easier for families to refinance, reforming the system so families aren’t on the hook for the bad behavior of certain mortgage lenders, and helping folks who aren’t homeowners yet get affordable housing that’s right for them.

Click here to find out more about President Obama’s plan.

And while  we need to do more, there are some resources we’ve already helped make available:

  • MakingHomeAffordable.gov is there to help get you mortgage relief and avoid foreclosure. If you or someone you know needs assistance, they can help you find programs that can help — both online and through a free, 24/7 support line that can connect you with housing experts.

Take a minute to share this information with your family and friends, so that people who might not know about these resources can start getting help if they need it.

Everything You Need To Know About The ‘Nuclear Option’ And Harry Reid’s Plan To Fix The Senate

By Ian Millhiser

On Thursday, Senate Majority Leader Harry Reid (D-NV) took the first step to invoking the so-called “nuclear option,” a Senate procedure that will allow a majority of the Senate to effectively change its rules to limit widespread obstructionism by the minority. As the trigger for this reform involves seven executive branch nominees being held up by Senate Republican filibusters, the likely consequence of this round of rules reform will be to eliminate the minority’s ability to filibuster nominees to non-judicial jobs. Here’s what you need to know about the showdown in the Senate that will occur next week:

What Is The “Nuclear Option?”

Although the term “nuclear opinion” was embraced by its opponents in an effort to cast aspersions it — its supporters have at times preferred to call it the “constitutional option” or the “Byrd option” — this maneuver is deeply rooted in the Senate’s history. As an article published by the conservative Federalist Society explained in 2004, the basic mechanism was devised by Republicans in 1890 to defeat a Democratic filibuster of a bill permitting military intervention in southern states that prevented African-Americans from voting.

Under this 1890 plan, Sen. Nelson Aldrich (R-RI) proposed introducing a motion asserting that “[w]hen any bill, resolution, or other question shall have been under consideration for a considerable time, it shall be in order for any Senator to demand that debate thereon be closed.” Aldrich then envisioned a series of steps where the presiding officer of the Senate would reject the process proposed by his motion, and a simple majority of the Senate would reverse the presiding officer’s decision. Aldrich, however, never executed this plan because Democrats eventually caved and allowed a vote on the bill out of concerns that Aldrich would succeed.

More recently, in 1977, Senate Majority Leader Robert Byrd (D-WV) successfully used a similar process to prevent senators from forcing debate on amendments introduced purely for the purpose of delay. Under this maneuver, Byrd asked Vice President Walter Mondale, who was then presiding over the Senate, to rule that he was required to “take the initiative” to rule such dilatory amendments out of order. When Mondale sustained Byrd’s request, supporters of more delay appealed that decision, and Byrd led the Senate to table this appeal by a majority vote. Thus, Byrd effectively eliminated a mechanism allowing a minority of senators to prevent a vote on a matter the majority supports, just as Reid seeks to do now.

Indeed, in a memo provided to ThinkProgress, Sen. Jeff Merkley’s (D-OR) office identifies 17 additional times since Byrd originally executed this maneuver in 1977 when the Senate has changed its procedures by a majority vote. The most recent example occurred on October 6, 2011, when the Senate voted 51-48 that senators could not use “motions to suspend the rules in order to consider non-germane amendments post cloture” in order to delay a vote.

Wasn’t There A Big Fight Over This During The Bush Administration?

Yes. President George W. Bush nominated a number of unusually ideological judges to the federal appellate bench. As a Texas Supreme Court justice, for example, Judge Priscilla Owen took thousands of dollars worth of campaign donations from Enron, and then wrote an opinion reducing Enron’s taxes by $15 million. As Alabama’s Attorney General, Judge William Pryor defended handcuffing prisoners to a hitching post in the hot sun, and then making them remain there for up to seven hours with barely any water and no bathroom breaks. Judge Janice Rogers Brown compared liberalism to “slavery” and court decisions upholding the New Deal to a “socialist revolution.” Since joining the federal bench, she wrote an opinion suggesting that all labor, business or Wall Street regulation is constitutionally suspect. Democrats filibustered these nominees, and a handful of others.

Many Republicans who are now playing a key role in defending the filibuster labeled Democratic filibusters unconstitutional in 2005. Future Senate Minority Leader Mitch McConnell (R-KY) accused Democrats of wanting “to reinterpret the Constitution to require a supermajority for confirmation.” Future Senate Minority Whip John Cornyn (R-TX) labeled Democrats’ actions an “unconstitutional use of the filibuster.” Sen. Lamar Alexander (R-TN), who has since voted to filibuster several Obama nominees, declared that “I would never filibuster any President’s judicial nominee, period.”

The Democrats’ filibusters did not last very long, however, in the so-called Gang of 14 agreement, seven Democrats agreed to a near total surrender to Republican demands — agreeing to permit Owen, Pryor and Brown to be confirmed to federal appeals courts. As an added bonus for Republicans, this agreement left the filibuster intact, thus allowing them to turn it against President Obama.

But Wait, Didn’t Democrats Oppose The Nuclear Option In 2005?

They did, but circumstances have changed quite a bit since then. Democrats filibustered nominees like Owen, Pryor and Brown because they viewed them as uniquely offensive nominees justifying the use of unusual tactics. Republicans under Obama, by contrast, say that there are some jobs that they will confirm no one to, no matter who President Obama nominates. Many Democrats who still believe that the filibuster can exist if it is only used, in the words of the Gang of 14 agreement, in “extraordinary circumstances,” now see that filibusters are being used in extraordinarily ordinary circumstances. They believe this is a bridge too far.

If Republicans succeed in maintaining the filibuster, moreover, it will cripple much of the government’s ability to function and lead to severe consequences for many American workers and consumers. By refusing to confirm anyone to the National Labor Relations Board, Republicans will likely shut down nearly all of federal labor law. Without the NLRB,

there will be no one to enforce workers’ rights to join a union without intimidation from their employer. No one to enforce workers’ rights to join together to oppose abusive work conditions. And no one to make an employer actually bargain with a union. Without an NLRB to enforce the law, it may be possible for an employer to round up all of their pro-union workers, fire them, and then replace them with anti-union scabs who will immediately call a vote to decertify the union.

Similarly, a Republican filibuster of Consumer Financial Protection Bureau Director Richard Cordary will likely shut down that agency’s new authority to regulate Wall Street. Anticipated filibusters of three nominees to the United States Court of Appeals for the District of Columbia Circuit will enable Republicans to strike numerous rules promulgated by the Obama Administration to protect workers, consumers and the environment. The filibuster is no longer being used to block unusually offensive nominees, it’s being used to hobble America’s ability to govern itself.

Beyond these specific examples, there can be no doubt that filibusters spiked significantly since McConnell took over at the Senate’s Republican leader. A common mechanism used to measure the frequency of filibusters is to count the number of “cloture motions” filed in a particular Congress — cloture motions are the mechanism used to attempt to break a filibuster. The number of such motions spiked massively the minute McConnell became Minority Leader:

Indeed, nearly 3 in 10 of all cloture motions filed in the history of the Senate were filed during McConnell’s reign as Minority Leader.

With respect to filibusters of executive branch nominees, the issue likely to be addressed next week, the data shows a similar spike in McConnell-led filibusters once President Obama took office:

Why Is This Happening Now?

In the past three years, Democrats twice agreed to minor rules changes that did little to quell McConnell’s tactics. This time, however, they appear likely to pursue meaningful reform. This shift is likely due to a pair of court decisions by Republican judges that created a looming crisis Senate Democrats can no longer ignore.

The reason why the NLRB is in danger of going dark, stripping away much of American labor law in the process, are two decisions joined by five Republican judges that effectively strip away President Obama’s power to fill these seats via a recess appointment. And, while there is no guarantee that the Supreme Court will uphold these decisions, the fact remains that there are five Republicans on the Supreme Court and only four Democrats.

If the NLRB goes dark, unscrupulous employers could do significant and irreversible damage to workers and the unions they rely upon to protect their livelihoods. Even if the Senate were eventually able to fill the open seats on the NLRB, the labor movement may never recover from the blow such employers could deal in the absence of an NLRB capable of enforcing federal law. Thus, the irony of the five Republican judges’ decisions stripping away much of the government’s ability to function is that it could ultimately have the opposite effect. Because Democrats no longer have the option to delay filibuster reform without risking permanent harms, robust reform is more likely today than it has ever been. And that will lead to a far more functional government than the one we have under Mitch McConnell’s preferred regime.


This material [the article above] was created by the Center for American Progress Action Fund. It was created for the Progress Report, the daily e-mail publication of the Center for American Progress Action Fund. Click here to subscribe.

Coincidence or Corruption?

43 Senators

 

The central mission of the Consumer Financial Protection Bureau (CFPB) is to make markets for consumer financial products and services work for Americans — whether they are applying for a mortgage, choosing among credit cards, or using any number of other consumer financial products.  The CFPB’s goal is to ensure

  • consumers get the information they need to make the financial decisions they believe are best for themselves and their families,
  • that prices are clear up front, that risks are visible, and
  • that nothing is buried in fine print.

In a market that works, consumers should be able to make direct comparisons among products and no provider should be able to build, or feel pressure to build, a business model around unfair, deceptive, or abusive practices.

It begs the question: “Why are GOP Senators against ensuring that consumers across America aren’t afforded adequate protection from financial abuses we’ve clearly seen across the financial sector?”  Could it be that they’re beholden to the financial barons within that sector that stuffed their campaign contribution envelopes?  Nevada’s Senator Heller was one of those Senators who apparently believes consumers don’t need effective financial protection.  Read the letter here; check his signature.