[2:06pm] – And we’re off and running.
[2:06pm] – John McNamara is going to be speaking. Woo hoo!
[2:08pm] – CFPB Director Richard Cordray is now at the podium.
[2:12pm] Cordray: Some people just put their head in the sand to avoid payment.
[2:14pm] Today, we’re considering proposals that would drastically overhaul the debt collection market … Our principles are grounded in common sense.
[2:18pm] Cordray: Few consumers have the resources and time to defend themselves when sued by a debt collector.
[2:20pm] Cordray: Enforcement alone will not solve [the industry’s] problems … It is not enough to premise debt collection on the right person and the right amount … Consumers need protection from collectors.
[2:25pm] Cordray: We’re determined to put the burden of proof on collectors and protect consumers.
[2:26pm] Panelists taking the stage. There are 10 panelists, representing the CFPB, consumer advocacy groups, and the collections industry.
[2:28pm] McNamara: We are hear to learn more about the debt collection market.
[2:29pm] Each panelist will have three minutes to make an introductory statement.
[2:33pm] Jim Mastriani – Velocity Portfolio Group – Consumer access to credit is a privilege. Not a right.
[2:35pm] Mastriani – The law should not allow consumers to turn credit into a gift.
[2:38pm] Linda Guinn – C B Merchant Services – we are looking for clarity and uniformity so we know what is fair and what is right.
[2:39pm] Scott Maurer, Santa Clara University School of Law – A bright line rule is needed. At first blush, this rule is “reasonable.”
[2:41pm] Maurer – “I’m at work.” Shouldn’t those three words be enough to tell collectors that it’s not a good time to talk.
[2:42pm] Graciela Aponte-Diaz – Center for Responsible Lending – Today’s hearing is critical for millions of Americans who are being chased by debt collectors.
[2:45pm] Aponte-Diaz – Abusive collection practices harm millions of Americans.
[2:45pm] Aponte-Díaz – concerned some of the provisions will not do enough to protect consumers from unwarranted attempts. Does not go far enough to ensure that collectors are going after right people. CFPB should match tougher standards at state level.
[2:47pm] It would be a good drinking game if you had to take a shot every time someone says “bought a debt for pennies on the dollar.”
[2:48pm] Susan Shin – New Economy Project – Debt buyers have attorneys representing them 100% of the time. Defendants have an attorney representing them only 2% of the time.
[2:50pm] Panel discussion between CFPB reps and rest of panel.
[2:51pm] Brent Yarborough – representing NARCA – appears to be reading his answer to a question asked about best practices. Looks like the questions were sent around to the panel in advance.
[2:59pm] Aponte-Diaz is reading a response. Nobody wants to look unprepared. But it’s not a panel discussion. It’s just rehearsed and rehashed.
[3:01pm] Shinn – Many debt buyers filing suits without intent or ability to back up their claims. If you are sued, respond. Be sure to show up for all your court dates. When you’re in court, ask who you were dealing with. If you’re sued, look into how old the debt is. Know that the burden of proof is on the debt collector and the debt buyers. Always check to see if your income – like Social Security – is exempt from debt collection.
[3:03pm] Brent Yarborough – representing NARCA – creditor does not want to file a lawsuit. It’s expensive. If a debt can be resolved, we’d much rather resolve it before we go to court. Don’t ignore those letters. If a suit is filed, don’t ignore it. If you do owe the debt, it’s not too late. During a lawsuit is an advantageous time to settle a debt and set up payments. Consumers think it’s too late. But it’s not.
[3:05pm] Mastriani – we are willing to work with consumers to work out unique solutions, but it takes communication. Negotiating with a debt collector or debt buyer may be more advantageous for consumers. Lack of ability of debt collector to communicate results in litigation. A result is less than optimal.
[3:07pm] Guinn – We are often first point of contact when an identity theft has occurred. It is not the intention of any agency to harass. But that invokes a stalemate and that forces a decision on behalf of the collectors. If sued, challenge the collector to prove and document the information.
[3:09pm] Shinn – CFPB needs to issue strong rules so that collectors are not wasting consumers’ times with frivolous lawsuits.
[3:12pm] – Moving on to comments from the public.
[3:13pm] – Room doesn’t look very full. Did fewer people show up than expected?
[3:15pm] – First commenter – Harvey Moore, president of NARCA. I welcome rulemaking that will result in a higher degree of consistency.
[3:18pm] Susan Martindale – Consumers Union – Federal inaction has left states and courts to pick up the difference to establish what the minimum standards should be … Sets an important ground rule at the national level. This protects the dignity of consumers.
[3:20pm] Jan Stieger – Executive Director of DBA International. We are truly committed to working with regulators at state and federal level. We have worked across the aisle to work out solutions to the issues. A quick look – standards in DBA certification process match well with CFPB’s outline proposals.
[3:22pm] Tony Diaz – SchoolsFirst Federal Credit Union. Arguing that credit unions and other banks should be treated differently than third-party collectors. New rule could inadvertently create adversarial relationship with our members. Sending out debt validation notices does not comport since debt is owed by creditor itself. Credit unions should be held exempt from any debt collection rules.
[3:29pm] Jerry Terrell – Collector. Arguing that burden is on consumer to disprove a debt is theirs. A lot of consumers do not choose to file paperwork to prove their case. Debtors do not want to communicate on the phone. Other forms of technology would enhance communication.
[3:31pm] Ohad Samet – TrueAccord. Proposal is a big step forward in furthering consumer protection. When finalizing rule, CFPB should continue to foster innovation in collection space. Using new technologies – text, email, social media – digitizing dispute process, improves consumer protection. Marked reduction in consumer complaints. Consistently reduces call volume and improves communication.
[3:33pm] June Coleman – Collection Attorney. Collection lawsuits make up 60% of civil filings in California. Problem faced by courts across the nation. All of the stakeholders – want uniformity so the cases can be handled fairly and efficiently.
[3:38pm] Kelly O’Brien – Credit Bureau Associates. Like to avoid constant worry of consumer attorneys coming after us for the gray areas of the law.
[3:41pm] Linda Dios – Consumer attorney. Every one I have represented and I have represented hundreds – no supporting documentation. Harassing phone calls and numerous phone calls.
[3:42pm] Sharon Lindeman – California and Nevada Credit Union Leagues. Credit unions do not engage in illegal or harassing debt collection activities.
[3:44pm] Where is everyone? A lot of people being called who are not there.
[3:45pm] Rodney Meeks – Credit Consulting Services. Second-generation collector. I’d be retired right now if I stayed as a firefighter. Disclosures and mini-miranda put consumers on defensive.
[3:47pm] Mark Ellis – Ellis Law Group. Institutionally, when you are putting rules and regulations together, please remember the doctrine of unintended consequences. Seen FDCPA be amended. Seen FCRA be amended. Seen TCPA come into effect and, interestingly, listening to the panel, often the bad faith of debt collectors and the good faith of debtors is overstated. California Rosenthal Act balances responsibilities of collectors and responsibilities of debtors. Be interested in meeting you folks in five years and see if your complaint numbers go down or not.
[3:59pm] Amy Morris – Attorney and Debt Collector. CFPB should add a box to their complaint form that says “I have informed creditor of this dispute.” Is it really a problem that the industry needs to wait 30 days if a debtor becomes deceased. What’s going to keep debtors from saying, “that person is dead.”
[4:02pm] James Hughes – Attorney. Be careful when looking at bad apples. There are bad apples in every industry. Do not make acts based on acts of few bad players. Very important CFPB address technology issue since FDCPA is so old. Technology could drive down prices. Which would make settlements easier to maintain.
[4:06pm] Michael Hawkins. Wants CFPB to recognize uniqueness of healthcare debt.
[4:07pm] Charles Messer – Lawyer. I agree with all of the Bureau’s objectives. But I submit the proposals are misconceived, ineffective and unfair. Debt collectors are messengers for creditors. Cracking down on collectors is like shooting messengers for delivering messages. Obligations only being imposed on messengers. If CFPB were concerned about accurate reporting and documentation, it is the creditor that has the information, not the messenger. Creditors never warranty the accuracy of their information. Collectors have no power. All the risks are crammed down on collectors. Bureau is cracking down on weakest persons in the industry.
[4:10pm] Wrapping up. Field hearing is concluded.
