Variety of Voices Featured at CFPB Debt Collection Field Hearing

In addition to the prepared remarks by Director Richard Cordray and CFPB staff, those attending today’s Consumer Financial Protection Bureau public hearing – either live in Portland, Maine, or via the Internet – heard from a variety of panelists and interested audience members.

CFPB leaders Steve Antonakes, Richard Cordray, and Corey Stone at the hearing.

Interestingly, the consumer representatives at the hearing focused mainly on issues with debt buyers and creditors, and the use of the legal collection channel by the ARM industry.

The panelists included:

• Dalie Jimenez – Associate Professor of Law, University of Connecticut School of Law
• Alexis Iwanisziw – Research and Policy Analyst, New Economy Project
• Frank D’Alessandro – Pine Tree Legal Assistance, Portland, ME
• Joann Needleman – President-elect, National Association of Retail Collection Attorneys (NARCA), and Vice President of Maurice & Needleman, P.C.
• Patrick Morris – CEO of ACA International

Frank D’Alessandro’s remarks primarily concerned debt buying and legal collection activities. He called for plain English communication by debt collectors to consumers around what can happen in the collection process. For instance, collectors should communicate limitations on collecting time barred debt and what income is exempt from garnishment. He also called for debt buyers to be held accountable for former debt collection efforts on accounts they purchase, as well as for the private right of action to be preserved for consumers.

Remarks by Alexis Iwanisziw focused primarily on activities by debt buyers, payday lenders, and banks that have charged — and then attempted to collect — significant overdraft fees.  She did not mention practices specific to third party debt collectors. Iwanisziw’s group, the New Economy Project, released a report last month titled “The Debt Collection Racket In New York” which focused on debt buyers’ and creditors’ use of the court system in New York to collect debt.

Joann Needleman and Patrick Morris testify at CFPB hearing.

Both Joann Needleman and Patrick Morris reinforced the key principle that consumers should not avoid communication with collectors. This is the only way for issues to be resolved quickly and with the least amount of hassle for the consumer.

One of the comments from the audience came from Steve Parker of NARCA member Daggett & Parker. He noted that complaints registered with regulators don’t always mean there has been a violation; often they simply mean that the consumer didn’t understand the process. He added that this is easily resolved with explanation.

Parker also suggested that, while Director Cordray suggested collections shouldn’t be personal, indeed, debt collection should be very personal (emphasis added). Collectors should strive to understand the circumstances of consumers and react accordingly and respectfully. He also identified the problem of consumer attorneys filing a multitude of lawsuits based on small technical violations.

Diane Chipalone comments from the hearing audience.

Another comment from the audience came from Diane Chipalone, Director, Fair Lending Training Program at National Fair Housing Alliance. She offered her congratulations to the CFPB on announcing that unfair, deceptive and/or abusive debt collection acts or practices apply equally to creditor debt collectors as well as third party collectors, closing a huge loophole that has existed for years, allowing creditors to escape responsibility under key portions of the FDCPA.

For more coverage on the CFPB’s announcements Wednesday, please read CFPB Tackles Debt Collection: Issues Bulletins for Collectors, Form Letters for Consumers, Warning for Banks and Debt Collection Complaints Now Being Accepted by CFPB