http://www.flickr.com/photos/fbouly/3568409530/
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http://www.flickr.com/photos/robotson/38315975/
This is good news. Mandatory binding arbitration is one more way that corporations end-around the civil justice system. And it keeps getting worse, thanks to the U.S. Supreme Court.
The new bill requires the CFPB to study arbitration in financial products and services, and report back to Congress. Based on the findings of its report, the CFPB may restrict the use of arbitration or ban it outright in financial products and services. We’ll hope for the latter.
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http://www.flickr.com/photos/jessgarduno/4748397648/
I realized that if someone owes one person money, they owe a lot more people money and they really aren’t deserving of such harsh treatment.
One particularly hard story comes from Bob Cook, who called a debtor to repossess his mobile home around Christmas time. Cook says he tried to be nice, but the debtor “winded up going home and shooting himself. I quit after that.”
Done properly or not, collecting debts takes a toll on collectors and debtors alike.
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http://www.flickr.com/photos/williac/626962261/
The New York Times popped in on Tuesday with a report that at least one New York law firm is filing 80,000 lawsuits per year, enough to put a serious strain on the New York court system. Minnesota Senator Al Franked pointed out to the Federal Trade Commission that the same sort of monkey business is going on in Minnesota, and asked the FTC to take action now and through future regulation. Minnesota legislators also promise to fix the broken debt collection system.
Update: the FTC says it is going to look into debt collectors who are jailing debtors in Minnesota. No report on whether the FTC will look into the other allegations of abuse Senator Franken mentioned.
Oh, and surprise of surprises, a Chicago debt collection law firm, stopped paying its own bills. When asked if it could borrow the money from a friend or family member, the firm had no comment.
But we didn’t even get to all the news this week. We still haven’t weighed in on the sweeping (?) financial reform that Congress finally got around to. And if you just can’t get enough debt collection news, here is a sprinkling of links on the Office of the Comptroller of Currency, which is (apparently) charged with protecting banks from state laws, and on the Military Lending Act, which isn’t actually helping members of the military escape scammers and loan-shark-sized interest rates service fees.
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http://www.alfranken.com/pages/meet_al/
Update: the FTC says it is going to look into debt collectors who are jailing debtors in Minnesota. No report on whether the FTC will look into the other allegations of abuse Senator Franken mentioned.
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http://www.flickr.com/photos/dystopos/8921528/
Wow.
It seems impossible for a lawyer to actually examine each lawsuit, make sure it has merit and there is evidence to support it, and sign off on it. This means that the courts end up trying to sift through the cases the law firm has not really bothered to look at, so the courts become the debt collectors’ back room.
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If you take a bad thing—debt collection—and subtract fairness, it gets worse. The FTC sounded off on the problems with combining debt collection and forced arbitration. In fact, the FTC recommending banning arbitration on the mandatory binding arbitration of debt collection disputes:
Such a ban should remain in place until the arbitration process can be shown to be fair, transparent, and as affordable as traditional litigation, and until consumers have a meaningful opportunity to opt out of pre-dispute arbitration without losing access to the credit services they seek. Once these conditions have been met, Congress could lift the ban itself, or it could delegate that authority to the Federal Trade Commission or another appropriate consumer financial protection agency or bureau established in the future.
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In a completely unsurprising development, the Federal Trade Commission reports that consumer complaints about debt collection are on the rise. Just as they have been for years. Consumerist points out some of the more salient points from the FTC news, such as a debt collector who harassed a 54-year-old woman as well as a parade of family members and exes.
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http://www.flickr.com/photos/chicagogeek/4689772042/
Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population.
It’s a pretty big difference. About 14% of people with mortgages over $1 million are seriously delinquent, while only about 8% of people with mortgages under $1 million are. Real estate firm CoreLogic, which came up with the numbers, thinks the rich simply dump bad homes like any other bad investment.
Apparently, the rest of us are suckers, dutifully paying down our under-water houses. New York Times writer David Streitfeld suggests that “the rich do not seem to have concerns about the civic good uppermost in their mind.”
(I think Streitfeld meant to write “the banks’ good.” The civic good seems to have already contributed all the bailout money it is going to.)
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