Financial
Federal Official Reaches Out to States on Consumer Finance Help
By Charlene Crowell
NNPA Columnist
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lthough the Dodd-Frank Financial Reform
Act requires regular reporting to Congress
by the Consumer Financial Protection
Bureau, the still-new agency is actively working to
engage other federal and state officials too.
On March 6, CFPB Director Richard Cordray
reached out to the nation’s state attorneys generals
to share the Bureau’s recent progress and also
request continued collaborations to protect the
nation’s consumers. In a keynote address before the
National Association of Attorneys General, Director
Cordray heralded strategic partnerships, special ini-
tiatives and shared plans for new areas of action.
“Our goal is straightforward but the responsibility
looms large,” said Director Cordray. “We are deter-
mined to make consumer financial markets work
better for all Americans, for the honest businesses
that serve them, and for the economy as a whole.”
In recognition of the collaborative efforts with
state attorneys general in reaching the recently-
announced mortgage settlement, Cordray assured
officials that mortgage markets will remain an
urgent CFPB priority.
In addition, CFPB will soon require mortgage ser-
vicers to improve the clarity of billing statements.
Servicers will also be required to provide consumers
with written, advance notice of interest rate adjust-
ments on hybrid, adjustable-rate mortgages.
Currently, as many as 10 million mortgage borrow-
ers are at risk of default and nearly 4 million are
more than 90 days delinquent.
Administratively, CFPB is now organized into
functional teams across several lending areas for
research, supervision and enforcement. In addition
to mortgages, these teams will examine credit cards,
payday loans, overdraft fees and an emerging con-
sumer issue – debt settlement.
A newly-proposed rule that has yet to take effect
will supervise all debt collectors in the United States
with more than $10 million in annual receipts result-
ing from collection activities. Once final, the rule
will enable CFPB’s supervision team to examine
and determine whether debt collectors are comply-
ing with the law.
“While debtors need to pay back their creditors,”
said Cordray, “the methods used by some debt col-
lectors are just unconscionable. Harassment.
Inexcusable language and threats. Repeated late-
night phone calls ... Some of this activity is
downright illegal, and none of it comports with any
proper vision of a civilized society.”
A December 2011 study by the Better Business
Bureau found that consumer complaints on debt col-
lection jumped 17 percent in just one year.
Additional findings from the study included:
· Debt buyer-collectors pay pennies on the dollar
for billions of dollars in delinquent debts
that have been charged off and then try to
collect the face amount of the debts.
· Income increased an average of 58
percent in one year for two large debt
buyer-collectors.
· After unsuccessful oral or written
attempts to collect a debt, collectors have
filed suits in courts, often obtaining
default judgments, and then garnishing
the wages or attaching bank accounts of
the debtor.
· The suits are often filed with scanty or
false information regarding the debt, and
sometimes are backed by affidavits
which are robo-signed at the rate of hun-
dreds daily per worker by employees
who have no knowledge of the debt.
Page 12 The Portland Skanner March 14, 2012
CFPB intends to work closely with
state attorneys general along with the
Federal Trade Commission and Depart-
ment of Justice on debt collection
practices.
According to Corday, “Our goal is to
help the honest debt collectors do their
jobs responsibly and see that the rest are
either rehabilitated or run out of business
once and for all. Until we do so, we will
be failing all those people who are count-
ing on us to change the world for the
better – including ourselves.”
Charlene Crowell is a communications
manager with the Center for Responsible
Lending.
‘Some of this activity is downright illegal, and
none of it comports with any proper vision of
a civilized society’