CFPB Ombudsman Quits Over Student Loan Regulation

The Consumer Financial Protection Bureau’s (CFPB’s) Student Loan Ombudsman, Seth Frotman has had enough of the political maneuvers affecting the way he does his job overseeing student loan regulation. On August 27, 2018, Frotman resigned from the CFPB. His resignation letter shows how the organization has changed under the Trump administration.

Report Shows Racial Discrimination in Auto Financing at Car Dealerships

When you go to buy a car, you expect your auto financing to depend on your income, your credit, and other money-related issues. But what about your race? A study released earlier this year shows that color directly affects how much you will pay for a car if you get your financing from car dealerships.

Michigan’s Payday Loan Rules Stay Tough In Spite of Federal Trend Against Regulation

Michigan has some of the toughest payday loan rules in the nation. Even if the U.S. Consumer Financial Protection Bureau backs off under new leadership, these rules make sure Michigan residents are protected from abusive lending practices and dangerous debt cycles.

New Head of CFPB to Reevaluate Payday Loan Regulations

The Consumer Financial Protection Bureau is responsible for regulations connected to lending and the financial industry. Since 2012, the agency has been working to develop payday loan regulations that protect consumers from the abusive and manipulative tactics used by the industry. But in a recent statement, the new head of the CFPB said the agency plans to reevaluate those regulations, and make it easier for lenders to avoid them ever being enforced.

Assembly Line Student Loan Debt Collections Called Into Question

Student loan debt collection lawsuits crowd local courtrooms across the country. But when mega-firms use assembly line tactics to push cases into court, mistakes happen. That can leave well-meaning borrowers at a loss to fight back against claims they don’t even owe. Now the Consumer Financial Protection Bureau has stepped in, but a settlement designed to protect consumers could fall apart in court.

Senate Undercuts Consumer Protection Rules Against Mandatory Arbitration

For years, consumers have used class action lawsuits to fight back against large corporations, banks, and predatory lenders who break the law. But the U.S. Senate recently passed a bill restoring the mandatory arbitration clauses in most consumer contracts, creating obstacles for consumer protection efforts and cutting off access to the courts.

New Rule Protects Consumers’ Right to Class Action Lawsuits

In the face of political opposition, the federal Consumer Financial Protection Bureau announced a new rule protecting consumers’ right to join class action lawsuits. The rule would keep banks and credit card companies from using arbitration clauses to keep small claims out of court.

Did an IRS Contractor Violate Consumer Protection Laws?

This year, the IRS has begun to outsource its tax debt collections to private contractors. But the National Taxpayer Advocate and several senators are asking whether one IRS contractor’s debt collection methods violate federal consumer protection laws.

Financial CHOICE Act Splits Michigan Representatives

Since 2010, the Dodd-Frank Act and the federal Consumer Financial Protection Bureau have protected American consumers from unfair financial practices. But now the Financial CHOICE Act could, in President Trump’s words, be a “major haircut” to the organization and its ability to protect citizens.

Wells Fargo Uses Arbitration to Hide Sham Settlements

Wells Fargo recently became the center of attention when it came to light the company’s employees were creating sham accounts using its customers’ personal information. But now the company is using private arbitration to bury settlements from the public eye.

CFPB Issues Safety Regulations for Prepaid Debit Cards

What rights to do you have if you lose a prepaid debit card? Can you get a refund? Can you keep someone else from using it? New CFPB regulations provide increased transparency and protection.

CFPB Gets Hit with Limits on Timing, Remedies

When consumers find themselves at odds with big companies or financial companies, they turn to the Consumer Financial Protection Bureau (CFPB) for help. A recent U.S. Court of Appeals decision will hamper efforts to fight for consumers’ rights.

CFPB Comes Under Fire from US Court of Appeals

The Consumer Financial Protection Bureau (CFPB) has done the hard work of protecting US consumers since it was created in 2010. Now a U.S. Court of Appeals decision has ruled the CFPB’s structure unconstitutional, subjecting the agency and consumer safety to the political system.

Wells Fargo Pays Biggest Fine Ever to CFPB for Setting Up Fraudulent Accounts

Imagine discovering that your bank has been moving your funds into a bank account you never authorized. Or worse, a credit card account. Wells Fargo is under the Consumer Financial Protection Bureau’s microscope after its community banking division was caught opening fraudulent accounts at its customers’ expense.

What You Need to Know about the New Payday Loan Rules

On June 2, 2016, the Consumer Financial Protection Bureau issued proposed rules to regulate the payday loan industry. These rules close the traps that many low-income residents find themselves in when money runs short. Here’s what you need to know about the new payday loan rules, and why they are necessary.

Michigan Considers Bill to Loosen Payday Loan Laws

Payday loans are a debt sentence to low-income families across Michigan. But while federal regulators are trying to find ways to crack down on the industry, the Michigan Legislature is considering just the opposite. Two new bills would loosen payday loan laws and make it easier for lenders to take advantage of poor Michigan families.

Federal Bill Could Gut Payday Loan Regulations

The Consumer Financial Protection Bureau is expected to crack down on payday loan regulations later this year. But a bill working its way through the House of Representatives in Washington could stop these important consumer protections in their tracks.

What Mandatory Arbitration Means to Consumers

You may not realize it, but buried in your cell phone contract, mortgage documents, or credit card contract is a mandatory arbitration agreement. This paragraph can keep you from taking your bank to court when problems arise. Now the Consumer Financial Protection Bureau is cracking down on mandatory arbitration agreements to protect consumers' rights.

Consumers used to be able to bring problems with their banks to court and ask a judge to decide if the bank had done something wrong. Then, to save companies' time and expense, business contracts started to include arbitration provisions. These agreements allowed either party to take a case out of court and have it decided informally by a neutral arbitrator (often a retired judge or attorney).

But mandatory arbitration agreements almost always turn out in favor of the company. Consumers usually don't know they have signed them, and so will not force arbitration when it would help them. When the banks do enforce arbitration provisions, the arbitrator they choose is often biased toward the industry.

Arbitration can't be appealed like a judge's ruling. When the consumer gets an arbitration decision she doesn't like she is out of luck. So bad decisions go unchallenged and companies are able to continue bad practices that hurt consumers.

When a consumer signs a mandatory arbitration agreement, he is also signing away his right to participate in class-action lawsuits against the company. When an individual's claim is small, but the company's behavior affects a large number of customers, consumer protection attorneys can use class-action lawsuits to get the company to change its ways. Class-action lawsuits combine the claims of a broad category of people into one legal action – letting them share the cost of litigation.

Mandatory arbitration agreements take away that tool. By requiring each individual claim to be taken to an arbitrator, rather than to court, companies are able to ensure they won't have to face classes of consumers whose cases are stronger together.

That's why last month the Consumer Financial Protection Bureau (CFPB) issued a new regulation banning “class-action waiver” language in mandatory arbitration agreements. Under the new rule, consumers with small claims would still be able to pursue a class-action lawsuit even if they had signed mandatory arbitration agreements. If they sue individually, the banks can still remove the case from court and take it to arbitration.

Some commentators believe this move is too little to provide meaningful consumer protection. They believe CFPB should have banned mandatory arbitration agreements entirely.

A ban on mandatory arbitration agreements would protect consumers from businesses who take advantage of a corrupt arbitration system. It would restore their access to the courts. It would put tools back into the hands of consumer protection attorneys like Dani K. Liblang who fight for their clients against big businesses and their harmful practices. If you have a dispute with your bank and are worried about arbitration, contact The Liblang Law Firm, P.C., for a free consultation today.

Why Consumers Shouldn't Rely on the Better Business Bureau

Whether you are looking for a reliable service provider or trying to choose the best product among a field of options, you may be inclined to look to the Better Business Bureau to help you choose. A new report from CNN Money explains why that might be a bad idea.

A CNN Money investigation recently revealed more than 100 businesses facing serious legal trouble from government regulators, but still maintained at least an A- rating from the Better Business Bureau. Here's a sample of the companies that made the list:

• Recall Failures: Stove manufacturer Electrolux failed to issue recalls for ovens it knew malfunctioned causing flames to shout out of them, causing facial burns. The company paid a $750,000 fine to the Department of Justice in May 2014. BBB Rating: A+
• Discriminatory Lending: Provident Funding Associates, a mortgage broker, charged African-American and Latino borrowers higher interest rates and fees based on their race. They faced a lawsuit from the Consumer Financial Protection Bureau and the Department of Justice. The company paid $9 million in damages to borrowers. BBB Rating: A+
• Abusive Collections Practices: Drive Time harassed borrowers and their friends and families with excessive phone calls at inappropriate times, and even at work. It also sent false information to credit bureaus. The lender paid $8 million in civil penalties and provided free credit reports to affected borrowers. BBB Rating: A-

What did all these companies have in common that let them maintain their high ratings? For one, they are all paying members. In 2013, the BBB had nearly 400,000 paying members, resulting in nearly $200 million in revenue. “Accreditation” is something that companies can purchase through membership fees.

The Better Business Bureau is a non-profit company with a set of internal criteria that it uses to rate companies – both members and non-members. But even when the BBB issues “red flags” against a company, it can still maintain a high rating based on long-time membership. Companies can also receive higher ratings for addressing complaints through the BBB system than for any other factor – including not having any complaints at all.

At the same time, government lawsuits and penalties may have such a small impact that a company can maintain an A rating while paying regulators thousands of dollars in fines. Consumer protection lawsuits rank even lower: they aren't a factor at all.

The Better Business Bureau isn't a consumer protection agency. Instead it is in the business of offering paid endorsements to companies, even in the face of regulatory penalties. Don't get fooled by their ratings. Make sure you know whether any review is paid for before you put your money on the line.

Dani K. Liblang is a consumer protection attorney at The Liblang Law Firm, P.C. She represents consumers against businesses that would take advantage of them. If you have been injured by a product defect or are facing harassing debt collections, contact The Liblang Law Firm, P.C., today for a free consultation.

CFPB Calls Fowl on 2 Biggest U.S. Debt Collectors

The Consumer Financial Protection Bureau recently ordered the nation's two biggest debt collectors, Encore Capital Group and Portfolio Recovery Associates, to stop using deceptive tactics to collect bad debts. The order sends millions of dollars back to the nation's citizens and gives a clear warning to other debt collectors.