NCBA Meets With CFPB To Discuss Meaningful Involvement Provision of Proposed Rule

In the midst of a wave of more than 1,000 comments that have been filed in the past two days protesting the Consumer Financial Protection Bureau’s proposed debt collection rule comes the details of a meeting between a number of representatives from the National Creditor’s Bar Association and senior staffers from the CFPB.

The details, filed as a comment by Yale Levy, NCBA’s President, detail the overall support that the association has for the proposed rule, while also expressing concern about one key provision; a safe harbor for meaningful attorney involvement. From a report of the meeting that was filed as a comment regarding the proposed rule:

Specifically, NCBA noted that meaningful attorney involvement is not stated in the text of the Fair Debt Collections Practices Act (FDCPA) and the proposal on its face fails to achieve clarity for both consumers and attorneys. The proposal would ultimately regulate attorney process rather than content. NCBA is concerned that the current proposal would lead to more lawsuits against attorneys, who would then be required to show that the standard was met through discovery and/or at trial. Thus, the proposal is not a safe harbor, but rather an affirmative defense to a private right of action. Pursuant to the proposal, collection attorneys will have to disclose attorney client communications as well as all of their notes and evidence of work product in order to effectively assert the defense. Furthermore, the proposal would interfere with the attorney client privilege as the client would have to waive that privilege in order for the collection attorney to use those communications in their defense. Unlike the proposals outlined in the limited content message and the model validation form, which are clear safe harbors, this proposal would not achieve that outcome. 

NCBA reminded the Bureau that the FDCPA already has protections for the consumer if false, deceptive or misleading representations are made. The current proposal does not address express representations and instead provides implied process, which is not workable. NCBA expressed concern that the proposal was ultimately the regulation of the practice of law. 

The concept of meaningful attorney involvement has been a hot-button issue for the CFPB for some time. Many in the industry should recall a lawsuit the CFPB filed — and lost — against Weltman Weinberg & Reis, accusing the agency of misrepresenting the amount of attorney involvement in letters and calls made to individuals with unpaid debts. The CFPB also sued another law firm in May for allegedly misrepresenting that attorneys were involved in the decision to file lawsuits against individuals with unpaid debts.

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