Consumer Attorney Says CFPB Regulation Should be All About the Money

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Just in case there was a doubt about what the consumer bar is really after, a prolific attorney that targets the ARM industry argues that the CFPB is “ineffective” in its regulatory efforts because it doesn’t get enough money from collection agencies and debt buyers to settle consumer complaints.

Sergei Lemberg just released a whitepaper under a press release headline of “CFPB Ineffective in Obtaining Financial Relief for Victims of Debt Collection Violations.” The whitepaper argues that rights of private action under the FDCPA are far more effective than the stuffy old CFPB…at extorting money from debt collection agencies, of course.

To Lemberg and his peers, money = justice. If they can get a collection agency to pay a consumer $3,500 in a settlement (and, naturally, several times that amount to the lawyers for their trouble), then everything will be better. What is not mentioned is that settlements under rights of private action almost always see the defendant admit no wrongdoing and make no promise to change practices.

This point is nearly conceded as Lemberg notes, “When debt collection agencies know they’re in violation, they don’t want to incur the expense of litigation, so they offer to settle in the pre-litigation phase.”

The whitepaper argues that the fact that only two percent of the debt collection complaints the CFPB forwarded to companies last year resulted in monetary relief proves that private FDCPA suits are more effective. Because it’s all about the money.

Equating a complaint to a definite “violation,” the report ignores the fact that the CFPB addresses each complaint it receives individually, determining the exact issue. To a consumer attorney, the thought of reasonable resolution without money exchanging hands is foreign and probably terrifying.

When the CFPB does take action against an ARM company, a change in practices is paramount in any settlement agreement. Often, the CFPB will have a company revise its practices without litigation, using its supervisory authority.

That’s all secondary to Lemberg, though. All that matters is money.

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Posted in CFPB, Collection Law Firms, Collection Laws and Regulations, Debt Buying, Debt Collection, Featured Post, Opinion .

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  • avatar Bob Pugh says:

    So, what he’s really saying is that the CFPB should refer consumers to attorneys. Does he also wish the CFPB to publish a list of FDCPA litigators who might take the case? A list ranked, maybe, by visibility in the community, or based on the number of YouTube videos the attorney has personally starred in?

  • avatar Sandy Leatham says:

    Who is he kidding? The consumer doesn’t get any money, he keeps the majority of it for himself. And most importantly, most of the people he “represents” don’t even know that he represents them. He files willy nilly and sees what sticks. Those who pay to settle are part of the problem.
    I hope the CFPB takes on predator attorneys and starts slapping their hand out of the “candy dish”. These people are criminals and should be monitored, controlled and have policies and procedures and compliance jammed down their throats. I think that if people like him were to be MONETARILY punished, it might mean more.

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