Consumer Financial Protection Bureau Sacramento Hearing

On Thursday, July 30th, the Consumer Financial Protection Bureau (CFPB) held a field hearing on debt collection in Sacramento, CA. The CFPB is an agency that supports consumer finance markets and enforcement. The hearing featured remarks from CFPB Director Richard Cordray, as well as testimony from consumer groups, industry representatives, and members of the public. Over the course of her career, June Coleman has developed a niche practice defending credit and collection professionals accused of violating state and federal consumer protection laws. She is currently a director of the National Creditor’s Bar Association, and served as president of the Sacramento County Bar Association, as well as held leadership positions with the American Collectors Association and the California Association of Collectors. Ms. Coleman spoke at the hearing, and her remarks are found below. 

"Collection lawsuits make up over 60% of civil filings in California. The California Supreme Court and its trial courts have created coalitions to develop processes to handle the volume of cases in this time of diminishing court budgets – a problem faced by courts across the nation. I have worked in these coalitions, as have many of the collection attorneys here today. All of the stakeholders want uniformity so that these cases can be handled fairly and efficiently for all parties. But each state has different legal processes and uniform practices in one state will not work in another state. Regulations that supersede state law and state legal processes would put both parties and the courts at odds with un-reconcilable dilemmas. Clear and understandable rules would benefit the courts, the consumers, and creditors and their attorneys. But not rules that raise issues about which rule to follow.

Debt collectors and debtors need clear rules regarding communications. The CFPB should consider how those rules apply in all of the circumstances that surround debt collection. Do new notice periods take into consideration eviction laws which purposefully provide very limited time periods?  Do the new rules address complicated notice procedures for foreclosures?  Will the new regulation address how to meet a judge’s order to communicate during litigation if communicating exceeds the cap set forth in the regulation?  And how will the new rules reconcile the differences in these legal processes that vary state by state?

These are important issues that must be addressed in new debt collection rules."

Ms. Coleman may be reached at 916-321-4528 or jcoleman@kmtg.com.