In Speech to AGs, Consumer Financial Protection Chief Lauds Cooperation with States

In a speech Tuesday at the National Association of Attorneys General spring meeting, Consumer Financial Protection Bureau head Richard Cordray touted federal and state cooperation in cracking down on scams targeting military personnel, payday loans, foreclosure scams, auto loans and debt collection.

“Quite bluntly, we need your experience, your perspectives, and your coordination in a strategic effort to root out fraud and unfairness in the financial marketplace,” Cordray said, speaking before a packed ballroom at the Fairmont Hotel in Washington. “We want to expand on what you already do so well – and we want you to take advantage of new resources we bring to the arena, including new analytical tools and insight into market trends.”

Cordray, who previously served as Ohio attorney general, said the CFPB and state AGs have formed a series of working groups that are “meeting regularly to discuss the challenges posed to our mutual constituents” by financial scams. Also, federal and state prosecutors are creating the Repeat Offenders Against Military (ROAM) database, which will track completed enforcement actions against companies and individuals who repeatedly cheat military personnel.

“By providing a national clearinghouse for such information, we will make it difficult – if not impossible – for predators against our military to roam from one base to another, shrouded in their relative anonymity as they cross state lines,” Cordray said, noting that the idea originated with New York State Attorney General Eric Schneiderman.

He called on state AGs to team up with the feds (including the Federal Trade Commission and Department of Justice) to create a “national strategic plan” dealing with debt collection. “Our goal is to help the honest debt collectors do their jobs responsibly and see that the rest are either rehabilitated or run out of business once and for all,” he said.

In response to a question from Iowa Attorney General Tom Miller, Cordray said that the CFPB was “concerned about” for-profit colleges, which may be recruiting students with misleading information about graduation rates and job placement – “one of the worst possible kinds” of false advertising, he said. The CFPB has direct jurisdiction over private student lending.

Colorado Attorney General John Suthers described a frustrating fight with online payday lenders that have thwarted state oversight by affiliating themselves with Indian tribes. Cordray said this was an area where the state “should look to us for help.”

Cordray also promised the CFPB will issue new rules related to mortgages. One rule will require mortgage services to provide consumers with better information in their billing statements, another will cover “force-placed insurance.” Cordray said the rule will “prevent servicers from charging for this product unless there is a reasonable basis to believe that borrowers have failed to maintain their own insurance.“

He also said the CFPB will issue new rules for hybrid, adjustable-rate mortgages. “Consumers will be notified months ahead of their first interest rate adjustment and they will receive a disclosure of their new monthly payment, along with any available options to head off the higher rate, such as refinancing and renegotiation of loan terms,” he said.

Comments

[Mann]

Calabria's talking about stuff he knows nohntig about. He's an economist, not a lawyer and therefore misses a really elementary legal point: the Constitution trumps any Congressional statute. Congress cannot restrict the President's recess appointment power by statute. The real question is whether this was in fact a recess appointment, not whether the President can make a recess appointment. That's a trickier issue, as recess is not defined in the Constitution. Is a weekend a recess? A 3-day or 4-day holiday weekend? What is one to do about pro forma sessions, where the Senate doesn't conduct any actual business? What about the fact that roll call votes are not required (and if no one challenges quorum, hmmm ). I think the Senate resolution on Terry Schiavo was passed by all of two Senators in a voice vote in the middle of the night.

[Helen]

What I really don't untdrseand is how everyone is just skipping past the initial issue, which is whether or not this is a recess appointment. It clearly is not a recess appointment, and there requires the advice and consent' of the Senate. The President can argue til he is blue in the face that they Senate isn't really' in session, but I do not recall anytime in the past (or section of the Constitution) when the President has had the power to declare or decide whether or not the Senate is in session. The Senate opened session pro forma the DAY before the President announced and made this appointment. If the President can declare when the Senate is in session, and therefore declare when he does and does not require the advice and consent of the Senate, then that provision within the Constitution is meaningless. Surely, no one would argue such a thing. Least of all Senators Harry Reid and Barack Obama circa 2007-2008 when they did the same tactic. And certainly not Obama's justice department (Justice Kagen ridiculed the concept in a brief). Think about it this way . EVEN BUSH COULDN'T BRING HIMSELF TO DO THIS. So why should it be ok for Obama to do it?

[Ronica]

You cannot reasnoably argue that the Senate is not in recess when (a) none of the senators are in town, save the one guy who gavels in and gavels out 30 seconds later; (b) the Senate as a whole, the subcommittees, the caucuses, etc. are ALL out of session until late January; and (c) this is a four year old tradition to have pro forma sessions of the Senate (required by the House, which is also not functioning at all but in pro forma session , refusing to recess) in order to keep Obama from making recess appointments. Four years . . . not forty or one hundred and forty . . . but four years.Now I admit that it has been a long time since I read the Constitution. But I do not recall the phrase pro forma session anywhere in the document. This is a session in name only, one that, in theory, could last 364 days. So at what point would we all be able to agree that a pro forma session is not a real session of the Senate? Well, the tradition is a three day break in action, as the Kagen memo noted . . . but that, too, is nowhere mentioned in the Constitution.Finally, mark t. alludes to the idea that the CFPB will be rudderless after Cordray's one year stint is up. Uh, maybe. Conceivably, a GOPer president elected in November would not name anyone to the agency to which the GOPers are so hostile. But it is just ask likely that they would try to name a pro-pay day loan industry stooge into the position and try to undo every reform that Cordray puts in. And if Obama is re-elected, he certainly will fill the position, via recess appointment or otherwise, not screwing around for a year, the way he did this time, trying to cajole the GOPers into either confirming or rejecting a nominee.

[Salla Hasti]

It is a good thing that they discuss those scam thing specially the debt collectors,debt collector are really annoying what more if it is scam.I hope they will have a lot of move for those.

[Jaconda Wagner]

Interesting story. I wonder why it has taken so long for the government to act on these fraudulent practices. I am also curious about military personnel and their families being targets. Why isn't the government providing life skills to these individuals so they are aware of the scams and able to make better decisions about engaging in business with these people? Also, who is overseeing the AGS? I had an issue with a debt purchaser that it took me two states (New Jersey and Nebraska) and two years to resolve; however, the company (Merchant Credit Adjusters - MCA) is still in business and the state (Nebraska) refused to initiate an investigation into what I maintain were fraudulent practices by the company (Merchant Credit Adjusters - MCA). Even the alleged original debt holder (Township of Montclair) said it was unaware of the debt. So, how can you buy a debt that does not exist and harass a person for collection?

[Joe Jefferis]

Ohio voters fired Cordray in 2010.