American Bar Association Didn’t Want the CFPB to Look After Debt Collection Lawyers

According to the National Law Journal*, the American Bar Association’s Business Law Section filed comments (PDF) with the Consumer Financial Protection Bureau objecting to its latest move to assume jurisdiction over debt collectorsplenty of which are lawyers and law firms. Lawyers don’t like anyone regulating us but other lawyers, generally through state professional responsibility boards, which hear complaints and dole out punishment for ethical infractions. Judges can also punish lawyers for misusing the legal system.

But those options don’t seem to have stemmed the tide of complaints about debt collection abuses, some of which surely come from law firms with more than $10 million in annual receipts from debt collection — the ones now subject to the CFPB’s jurisdiction. Exempting debt collectors from the CFPB’s jurisdiction just because they happen to work for a law firm would be just as silly as exempting them from the Fair Debt Collection Practices Act. Which they aren’t.

Now, if the ABA’s Business Section had a suggestion for getting debt collection abuses by lawyers and law firms under control, it might be a different story. But all the letter says is that the CFPB should stay far away from regulating the practice of law. You know what? Let’s put “practice of law” in quotation marks. Because hiring an army of debt collectors to make phone calls and a team of legal assistants to churn out form complaints isn’t practicing law. Lawyers don’t just sign documents. They investigate the facts, craft pleadings, construct arguments, make judgments, advise clients, and advocate in courtrooms.

The CFPB is regulating the practice of law only because people with law licenses are required to sign those documents. There is little related to the collection of consumer debts — even through litigation — that resembles law practice.

* The NLJ article is behind a paywall, so I’m not even going to bother linking to it. Here’s the quote from CL&P Blog: “In comments filed with the agency before the rule became final, the American Bar Association, the Commercial Law League of America and the National Association of Retail Collection Attorneys protested that the CFPB was going too far.”