Ten years after passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act, with the country again facing an economic crisis, new polling data from Lake Research Partners, commissioned by the Center for Responsible Lending and Americans for Financial Reform shows that voters across all political parties are broadly and intensely supportive of strong consumer financial protections and of tough regulation of the financial services industry. Download the: Polling memo Toplines Time series
More than 4 million Americans are subject to wage garnishments for outstanding consumer debts and over 64 million people are being pursued by debt collectors, making them vulnerable to being sued for the wrong debt or the wrong amount of debt, among other predatory debt collection practices. People of color are more likely to be contacted by collectors and to be impacted by lawsuits resulting in wage garnishment and bank levies. CRL advocates for the protection of $1,000 per week in take home pay from wage garnishment and works to expose abusive debt collection and settlement practices.
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The undersigned consumer and civil rights organizations appreciate the opportunity to submit comments on the Consumer Financial Protection Bureau’s (CFPB or Bureau) 2020 Supplemental Notice of Proposed Rulemaking (supplemental proposed rule) on debt collection. As organizations dedicated to eliminating abusive financial practices – particularly focused on communities of color and low- to moderate-income consumers – we are deeply concerned about the supplemental proposed rule’s content and impact. The Bureau proposes in its supplemental proposed rule that collectors would be permitted to...
We support the CFPB’s decision to conduct additional testing of the validation notice it has proposed and agree that such research is a necessary part of the Bureau’s debt collection rulemaking. As discussed below, we believe that the utility of the research will depend upon: the criteria used to select individuals to participate in the research; and the scope of the issues that are probed through the research. This comment is thus offered to address ways to “enhance the quality, utility, and clarity of the information to be collected.” Download the full comment.
Even before the onset of the COVID-19 pandemic, US household debt was on the rise, reaching over $14 trillion. While much of this debt stems from mortgages, a growing amount stems from non-mortgage consumer debt, including student loans, medical debt, credit cards, installment loans, and auto loans. With the number of Americans facing unemployment, lost wages, and depleted savings due to the COVID-19 crisis, we can expect that household debt as well as defaults and delinquencies will rapidly climb. Download the policy recommendations. (PDF)
The 232 undersigned consumer, civil and human rights, labor, community and legal services organizations from all 50 states and the District of Columbia submit the following comments on the Consumer Financial Protection Bureau’s (CFPB or Bureau) proposed debt collection rules. The rule as proposed does far more to protect abusive debt collectors than consumers. The proposal opens consumers up to harassment, abuse and violations of their privacy by telephone, email, text and other means; obscures information about consumers’ rights; and protects debt collectors and collection attorneys who...
The undersigned consumer and civil rights organizations appreciate the opportunity to submit comments on the Consumer Financial Protection Bureau’s (CFPB or Bureau) proposed rule on debt collection. As organizations dedicated to eliminating abusive financial practices – particularly focused on communities of color and low- to moderate-income consumers – we are deeply concerned about the proposed rule’s content and impact. Without significant changes, we believe the rule will perpetuate abusive practices, harm already struggling families, and widen the racial wealth gap. We urge the Bureau to...
Earlier this year, the Consumer Financial Protection Bureau proposed new rules for debt collectors. The proposal authorizes, for the first time, a specific number of communication attempts to collect past-due debts. The rules also authorizes new means of communicating with people to collect debts, such as email and direct messaging, and expands the ability to collect time-barred debt. Download the polling memo. (PDF) Take Action: Urge the CFPB to protect consumers, not abusive debt collectors
Although debt collection plays an important role in how credit markets function, it can also expose American households to unnecessary abuses, harassment, and other illegal conduct. Unscrupulous debt collectors sometimes use incorrect data and illegal collection tactics to file lawsuits or pressure consumers into making payments on debt they may not owe. Even worse, millions of consumers become aware of lawsuits having been filed against them only after courts have reached judgments on cases frequently based on inaccurate information. Communities of color as well as low and middle-income...
Debt collection efforts around the United States rely heavily on litigation to collect past due debt. The ease of obtaining default judgments and garnishment orders has led debt buyers to use the courts as a critical tool for extracting payments from consumers, despite the lack of documentation showing that the consumer actually owes the amount claimed. Debt buyers are skilled at using the court system for collection purposes, but the people they sue typically are generally ill-equipped to fight the claims in court on their own and cannot retain counsel. Previous research has established that...
By the Stop the Debt Trap Alliance of Oregon, in partnership with the Center for Responsible Lending (CRL) In 2006, when Oregonians noticed the devastating impact payday and car-title lending was having on their communities, a coalition pushed for a change in the state laws, bringing new consumer protections to hundreds of thousands of people in the state. This example shows the power of communities to make change on issues affecting the day-to-day lives of people in Oregon. Today, community organizations are once again coming together to continue improving the marketplace and economic...