I’m thrilled to announce that Bedard Law Group is the new sponsor for the Compliance Digest. Bedard Law Group, P.C. – Compliance Support – Defense Litigation – Nationwide Complaint Management – Turnkey Speech Analytics. And Our New BLG360 Program – Your Low Monthly Retainer Compliance Solution. Visit www.bedardlawgroup.com, email John H. Bedard, Jr., or call (678) 253-1871.

Every week, AccountsRecovery.net brings you the most important news in the industry. But, with compliance-related articles, context is king. That’s why the brightest and most knowledgable compliance experts are sought to offer their perspectives and insights into the most important news of the day. Read on to hear what the experts have to say this week.
Bill Introduced to Subject CFPB to Congressional Appropriations Process
Another bill has been introduced in the Senate that would require the Consumer Financial Protection Bureau’s budget to be approved by Congress as a means of instituting checks and balances against what the sponsor of the bills calls a “radical nominee” who is set to take over running the agency. More details here.
WHAT THIS MEANS, FROM LESLIE BENDER OF CLARK HILL: Senate Bill 2790 – What does it mean? As reported last week, as the Senate was confirming incoming CFPB Director Rohit Chopra, sixteen Senators led by Sen. Bill Hagerty of Tennessee proposed a bill to restrict the financial resources available to the CFPB. Republican senators have strenuously opposed the appointment of FTC Commissioner Rohit Chopra as the CFPB’s sole director. Senate bill 2790 has been referred to the Committee on Banking, Housing and Urban Affairs. No hearings are currently scheduled. 2790, titled the “Consumer Financial Protection Bureau Accountability Act of 2021” is brief and would modify the authority the Consumer Financial Protection Act has to use civil penalties it recovers. After paying out civil penalties to direct victims, excess monies, per this proposed law, would have to be paid over to the Treasury’s general fund instead of remaining at the CFPB to fund its own operations. in a number of ways. First, in instances in which the CFPB recovers civil penalties, pays them out to direct victims harmed by acts (or omissions) that led to the penalties – the Bureau would now have to pay over any excess funds to the Treasury’s general fund. Stay tuned as it is too early to tell if this bill will progress.
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California DFPI Fines Collector, Debt Buyer $375k
The California Department of Financial Protection and Innovation has issued its first enforcement action against a debt buyer and debt collector, fining a firm $375,000 for allegedly breaking state and federal law by unlawfully threatening to sue consumers and submitting negative information to credit bureaus without notifying consumers. More details here.
WHAT THIS MEANS, FROM RICK PERR OF KAUFMAN DOLOWICH & VOLUCK: It has begun. As expected, however. The California Department of Financial Protection and Innovation has publicly issued its first enforcement action against actors in the ARM space. The DFPI is the California state version of the CFPB. It was born out of concern by local authorities that the Trump CFPB intended to cede its role as the primary financial watchdog in the country. It is anticipated that the DFPI will become an extremely active participant in the regulatory scheme. Most agencies, even tangentially, engage in collection activity in California. They can expect a very aggressive posture by the DFPI. This may have been the first enforcement action, but it surely is not the last.
W.V. AG Sues Collector For Breaking Terms of Settlement, Seeks Shutdown and Fine
The Attorney General of West Virginia has filed a lawsuit in state court seeking to fine a New York collection agency for operating in the state without a license as well as ban the company from collecting debts in the Mountain State. The suit was filed after the company signed an agreement with the AG’s office where it promised to comply with all laws, refund consumers of payments that were made, and pay a fine — a settlement on which the company allegedly reneged, according to the complaint. More details here.
WHAT THIS MEANS, FROM MITCH WILLIAMSON OF BARRON & NEWBURGER: There’s not much to say other than this represents a nightmare scenario for those of us in the industry working day and night to be compliant, telling the world that the debt collectors of today are different than in the past. By way of example, I recall hearing stories that once upon a time some collectors would drive a truck, like those sign trucks in Vegas advertising private entertainment, except that the collectors would park a truck or a red car with a sign that said “a debtor lives here.”
Bayside stands accused of some of the worst behavior, taking actions that most of us thought were left in the past. Threatening to have debtors arrested, visiting them at their place of employment and apparently actually going to a debtor’s home. Hard to believe.
But what makes Bayside and its owner’s actions, even more bizarre is the fact that they had already been “called out” by the West Virginia Attorney General for these and other illegal activities and had agreed to enter into a formal agreement, called an Assurance of Discontinuance, in which it promised to comply with all applicable laws, to make a full refund of all payments it collected from West Virginia consumers, and to pay a civil penalty.”
Rather than actually sign the Assurance as agreed, Bayside continued to thumb it nose at the authorities and continued its bad behavior. By the way, did I forget to mention, Bayside called Buffalo, New York home?
It is my belief that our industry needs to remain vigilant, and when we learn of a bad actor, like Bayside, at a minimum alert the authorities, because as they say, only one bad apple can ruin a basket
Collector Reaches $995k Settlement in Collection Letter Lawsuit
A motion has been filed in a West Virginia federal court to approve a settlement in a class action Fair Debt Collection Practices Act and West Virginia Consumer Credit Protection Act case that will see the defendant pay $995,000 after it was accused of sending letters that did not include updated language required under state law when attempting to collect on time-barred debts. More details here.
WHAT THIS MEANS, FROM CHRISTOPHER MORRIS OF BASSFORD REMELE: This case illustrates the challenge of monitoring and promptly incorporating into collection notices the ever-changing requirements of state law, particularly with respect to arguably time-barred debt (which can be inherently difficult to determine, involving application of law, as well as facts as to when the limitation begins to run and when it may be tolled). The CFPB’s final rule does not specify language for use in notices as to time-barred debt; yet, states may attempt to do so through their own legislation. Here, a collector allegedly failed to timely respond to a change in West Virginia law that required the following new disclosure for time-barred debt: “The law limits how long you can be sued on a debt. Because of the age of your debt, [collector] cannot sue you for it.” After several years of litigation, plaintiffs overcame challenges to class certification (i.e., ascertaining those consumers who were sent notices on debts that were truly time-barred), and the parties reached a class-wide settlement.
I’m thrilled to announce that Bedard Law Group is the new sponsor for the Compliance Digest. Bedard Law Group, P.C. – Compliance Support – Defense Litigation – Nationwide Complaint Management – Turnkey Speech Analytics. And Our New BLG360 Program – Your Low Monthly Retainer Compliance Solution. Visit www.bedardlawgroup.com, email John H. Bedard, Jr., or call (678) 253-1871.
