Trump’s Destruction of the Consumer Financial Protection Bureau May Give Collection Agencies Unprecedented Control Over People’s Lives

In about 9 weeks, the future of the Consumer Financial Protection Bureau (CFPB) may be decided at the hands of the D.C. Circuit Court.

For many consumers, especially those without a lot of money to pursue legal options, the CFPB is a vital defense mechanism to keep creditors and collection agencies from essentially controlling a person’s financial future. While FCRA and FDCPA regulations would still exist, many creditors toe the line when it comes to what could be considered a violation of those statutes. Many times, lawyers would not be willing to take on a case that isn’t considered “slam-dunk” material without a retainer.

A complaint to the CFPB usually puts an end to deceptive and malicious practices since it only takes a relatively small number of complaints to start an investigation. These investigations can easily cost creditors millions of dollars in fines, along with their professional certifications.

An example of how the the CFPB works can be seen when collection agencies and charged-off creditors continually report payments as late even after accounts have been closed. It’s a gray area according to FCRA statutes but it is clearly malicious behavior designed to force consumers to either pay a bill they may have no responsibility for anymore, or continue to see their credit get ruined for up to a decade.

Similarly, the CFPB can protect consumers against malicious lawsuits, especially those filed near the end of the 5-7 year credit reporting period, which can restart the collection statute of limitations either due to an admission by a consumer in court, or by a default judgement if they fail to show up. These judgments can be renewed virtually forever, allowing the creditor to destroy an individual’s credit score their entire life.

This effectively means that unless an individual has the means to get legal representation in borderline abuse cases, old creditors will have the tools to collect far beyond the debt’s statue of limitations.