PARSIPPANY, N.J. — Pressler and Pressler, a law firm specializing in retail collections, today announced it has entered into a settlement agreement with the Consumer Financial Protection Bureau (CFPB). While the CFPB rigorously and thoroughly scrutinized the firm for more than a year and a half, the settlement ultimately involves no consumer redress or restitution, no invalidation of judgments and no findings of the use of improper affidavit practices. This result is a reflection of the millions of dollars Pressler and Pressler has invested annually in professional human resources and technology systems to strengthen the accuracy and professionalism of its operations. The firm is also among the first to have a dedicated compliance team, whose role has continued to be refined and expanded over time to meet changing standards.
“This settlement is not about laws or rules that are currently in place,” said Sheldon H. Pressler, managing partner. “Instead, the CFPB has formed its own unique interpretation of federal and state law today and applied those interpretations retroactively to our past practices that were, at the time, in accordance with federal and state laws.”
In the settlement, the CFPB makes only two broad claims, which Pressler and Pressler contends lack substance:
- Physical Documentation vs. Electronic Data: The CFPB has determined that Pressler and Pressler must have specific media before filing a lawsuit rather than electronic data, despite the fact that: (1) electronic data has been accepted by both federal and state courts; and (2) federal appellate case law holds that lawyers are not required to possess such documents at the time a suit is filed.
- Electronic Compliance Validation: Pressler and Pressler has made significant investments in systems to ensure the accuracy of consumer information, and the firm’s professionals have always gone through a detailed and thorough validation process. The fundamentals of this process remain unchanged as a result of this settlement. The CFPB is simply requiring its preferred mechanism for compliance verification within its interpretation of federal and state law. Pressler and Pressler has already implemented this practice.
“The CFPB is out of touch not only with how financial services are conducted in a digital economy, but also the standards by which the courts themselves have deemed appropriate to practice law and satisfy the Rules of Court as written by the Court,” added Pressler. “Further, in two recent consent orders against much smaller law firms, serious affidavit offenses were cited, consumer restitution was awarded and judgments were invalidated. We had no such findings, no restitution was awarded and no judgments were invalidated. Simply put, we settled so we can move on with our law firm practice. The smaller firms paid a modest penalty for their conduct. We paid a much larger penalty for conduct that resulted in no restitution and no invalidation of judgments. We believe we were asked to pay this disproportionate penalty due to our financial success and perceived ability to pay.”
While the firm disagrees with the CFPB’s position, its leaders felt that reaching this agreement was the most prudent course of action to minimize disruption to the practice and the financial impact to the business. Many of the practices required by the settlement have long been in place, so Pressler and Pressler is well-positioned to continue providing a level of compliance that exceeds industry expectations.
Additionally, because the CFPB has yet to issue relevant rules, the industry has been grappling with how to comply with unestablished and ambiguous standards. Pressler and Pressler is interpreting this action by the CFPB as clarifying how it intends for firms in its field to operate going forward.
“This outcome should give our clients nothing but confidence that we operate within the boundaries of the law,” said Pressler. “We are compliant with this settlement, which we believe indicates the standards that will be adopted across the sector. Because we’ve already taken these steps, we are well-positioned to continue serving our clients and leading the way in terms of these required practices and expectations.”
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