FOR IMMEDIATE RELEASE: JUNE 28, 2018 || Contacts: Persis Yu, pyu@nclc.org or Jan Kruse jkruse@nclc.org; (617) 542-8010

Boston – National Consumer Law Center advocates applauded the California Attorney General, Xavier Becerra, for taking decisive action today to protect student loan borrowers from abusive student loan servicing practices. Attorney General Becerra filed a lawsuit against Navient Corporation (Navient) and its subsidiaries, Pioneer and General Revenue Corporation debt collection agencies. The suit alleged misconduct resulting in borrowers being steered into repayment options that were lucrative for the companies and often harmful to borrowers.

“Navient and other federal student loan servicers and debt collectors are the gatekeepers to many of the flexible repayment options offered by the Higher Education Act and thus wield substantial power over the financial stability of nearly 43 million student loan borrowers,” said Persis Yu, director of National Consumer Law Center’s Student Loan Borrower Assistance Project. Unfortunately, as has been extensively documented, the student loan debt collection and servicing industries have long been rife with misconduct. “When servicers and debt collectors act abusively and deceptively, the harm can be long-term and irreparable,” said Yu.

According to a Consumer Financial Protection Bureau report based upon student loan borrower complaints, sloppy practices by servicers created obstacles to repayment, raised the costs of debt, caused distress, and ultimately contributed to driving struggling borrowers to default.

The U.S. Department of Education’s Office of Inspector General and the U.S. Government Accountability Office have cited the Department for providing insufficient oversight to its debt collectors and servicers. Yet, despite failing to hold servicers accountable itself, in a recent announcement, the U.S. Department of Education attempted to shield servicers and debt collectors from the consequences of their illegal actions by erroneously claiming that the Higher Education Act preempts state laws designed to protect consumers from unfair, deceptive practices.

“Given the Department of Education’s lax record on oversight, and as record numbers of Americans struggle to afford their student loans, enforcement of state consumer protection laws is critical to hold servicers and debt collectors accountable and to redress the harm done to borrowers impacted by illegal servicer conduct,” said Yu.

For more information on resources for students grappling with student loan debt, please visit the National Consumer Law Center’s Student Loan Borrower Project website at:  http://www.studentloanborrowerassistance.org.

FOR IMMEDIATE RELEASE: June 26, 2018 || Contacts: Margot Saunders (msaunders@nclc.org) or (202) 595-7844; Jan Kruse (jkruse@nclc.org) or (617) 542-8010

U.S. Chamber, Consumer Bankers Association, Student Loan Servicing Alliance and Others Propose Changes to Key Consumer Protection Law that Would Expose Consumers to Even More Robocalls

WASHINGTON – Comments are due this Thursday, June 28, to the Federal Communications Commission (FCC) regarding an inquiry that will determine the fate of the Telephone Consumer Protection Act (TCPA)’s protections against robocalls and robotexts to cell phones. Industry trade groups, including the U.S. Chamber of Commerce, the National Automobile Dealers Association, and the National Mortgage Servicing Association, and large businesses, including Quicken Loans, Navient and Nelnet, Sirius XM Radio, and ADT Security, have urged the FCC to effectively unravel the TCPA -opening the floodgates to unwanted robocalls and texts.

“The Telephone Consumer Protection Act exists to protect consumers’ privacy rights by limiting unwanted and invasive robocalls,” said Margot Saunders, senior attorney at the National Consumer Law Center. “Consumers need to tell the FCC not to leave them powerless in their efforts to end the deluge of robocalls.”

The three main questions on which the FCC has requested comment are:

The definition of “autodialer” (technically known as an automatic telephone dialing system).

Under current law, autodialed calls and texts are allowed only if the consumer consents to receive them. Without a broad definition of autodialer, consumers will be unable to stop these calls. The Consumer Bankers Association and others have asked the FCC to narrow the “autodialer” definition in a way that which would allow devices to flood consumers with invasive phone calls.

“Industry lobbyists want the FCC to define autodialer so narrowly that virtually nothing will be considered an autodialer,” said Saunders.

The right to revoke consent. In 2015, the FCC ruled that a consumer who has consented to receive robocalls has the right to revoke that consent. But now large businesses and their lobbyists are asking the FCC to back away from that position. Industry lobbyists are also asking the FCC to rule that, if consent to receive robocalls is part of the fine print of a contract, it can never be revoked.

Wrong number calls. Industry lobbyists want the FCC to allow robocallers to call wrong numbers with impunity, as long as someone to whom that phone number was once assigned consented to receive robocalls, The Student Loan Servicing Alliance, among others, argues that the intended recipient of the call should have the right to revoke consent.

“Put simply, if the caller is calling for Michael and I inform them I am not Michael and ask them to stop calling, the caller could continue making the calls because consent had not been revoked by Michael,” added Saunders. “It creates a scenario in which it becomes impossible to revoke consent.”

According to the call-blocking app YouMail’s Robocall Index, more than 4 billion robocalls were made to U.S. numbers in the month of May alone, the highest one-month total on record. Capital One, Wells Fargo, Comcast, and Santander Bank represented four of the top five sources of robocalls.

As the number of calls soars, lawsuits holding robocallers accountable remain few and far between. In 2017, a year that saw an estimated 30 billion robocalls, just 4,392 lawsuits were filed against robocallers. This represents a 9 percent decrease from 2016 and provides a direct contradiction to the repeated attempts to justify weakening the TCPA by claiming the vital consumer protection law leads to frivolous lawsuits.

To file comments with the FCC, go to https://www.fcc.gov/ecfs/filings/express and direct comments to docket number 02-278.

For more information, including tips for consumers to reduce robocalls, visit NCLC’s Robocalls & Telemarketing page.

FOR IMMEDIATE RELEASE: JUNE 18, 2018 || Contact: Jan Kruse (jkruse@nclc.org), (617) 542-8010

WASHINGTON – President Trump announced Kathy Kraninger as his nominee for director of the Consumer Financial Protection Bureau late Saturday. Since November 25, 2017, Office of Management and Budget Director Mick Mulvaney has also served as acting director of the consumer bureau, an agency that has returned more than $12 billion to consumers but which Mulvaney once described as a “sick, sad” joke.

“Ms. Kraninger does not appear to have any consumer protection experience that qualifies her to lead an important agency that oversees the largest banks and protects the public from risky mortgages, tricks and traps, and other abuses by Wall Street giants,” said Lauren Saunders, associate director of the National Consumer Law Center.

Kraninger is serving in the Office of Management and Budget and oversees the preparation of budgets for several cabinet departments and previously was with the Department of Homeland Security.

According to the Federal Vacancies Reform Act, Mulvaney could only serve as acting director for 210 days after the previous director left the job.. President Trump needed to nominate a permanent director by June 22 or Mulvaney would have had to vacate the position. Now that the announcement has been made, Mulvaney can continue to serve as the acting director until the U.S. Senate confirms his replacement. If the President’s first nomination is rejected, withdrawn, or returned by the Senate, the acting officer can continue to serve for no more than 210 days after the date of the rejection, withdrawal, or return. If a second nomination is made, the acting director can continue to serve until the second nomination is confirmed or for no more than 210 days after the second nomination is rejected, withdrawn, or returned.

During his tenure as acting director, Mulvaney has consistently sided with payday lenders, going as far as to drop major lawsuits against lenders (including one lender accused of charging 950 percent interest) and filing a joint motion with the payday lenders to roll back the consumer bureau’s rule to rein in short-term payday loans; the rule is set to go into effect in August 2019. Recently, Mulvaney also fired the 25 members of the bureau’s Consumer Advisory Board and requested staff to slash the agency’s FY19 budget by 20 percent, all while issuing only two enforcement actions in the last six months.

FOR IMMEDIATE RELEASE: June 12, 2018 II Contacts: Center for Responsible Lending: ricardo.quinto@responsiblelending.org (202) 349-1866; Public Citizen: abradbery@citizen.org, (202) 503-6768; National Consumer Law Center: jkruse@nclc.org (617) 542-8010; Americans for Financial Reform: carter@ourfinancialsecurity.org (202) 869-0397

WASHINGTON, D.C. – The U.S. District Court for the Western District of Texas today ruled against the request by Mick Mulvaney, the Community Financial Services Association of America, and the Consumer Service Alliance of Texas to delay the compliance date for the Consumer Financial Protection Bureau’s rule on payday loans.

This spring, industry groups filed suit to invalidate the payday and car title rule and block the consumer bureau from implementing it. Then, the consumer bureau teamed up with the industry groups to ask the judge to stay the payday rule, without litigation. If the court had sided with Mulvaney and the industry and stopped the rule from moving forward, payday lenders would be able to continue to use harmful business models to keep distressed borrowers in a cycle of debt. Consumer advocates and civil rights organizations are calling on the consumer bureau to implement the rule as planned (effective August 19, 2019) to protect consumers from predatory lenders.

The consumer bureau issued the rule last October following broad stakeholder input and more than five years of extensive research confirming that these loans trap borrowers in unaffordable debt, causing severe financial harm. At the heart of the rule is the commonsense requirement that lenders check a borrower’s ability to repay before lending money. In a 2017 poll of likely voters, more than 70 percent of Republicans, Independents, and Democrats said they support this idea. The requirement helps to ensure that a borrower can repay without re-borrowing and without defaulting on other expenses—that is, without getting caught in a debt trap.

The Stop the Debt Trap campaign, made up of more than 750 organizations from across the country, released the following statement:

“The consumer bureau, under the direction of Mick Mulvaney, should never have made this transparent attempt to destroy an important consumer protection around payday lending. Nonetheless, we’re heartened that a federal judge rejected Mulvaney’s attempt, in partnership with predatory payday lenders, to evade the requirements of the Administrative Procedures Act. “If they had succeeded in persuading the court, Mulvaney and the payday industry would have rolled back an important consumer protection with zero public input. By contrast, the payday rule as it currently stands was the subject of more than five years of public outreach, analysis and comment.”

Public Citizen, Center for Responsible Lending, the National Consumer Law Center, and Americans for Financial Reform Education Fund last week filed an amicus brief asking the judge not to stay the rule.

FOR IMMEDIATE RELEASE: June 7, 2018 || Contacts: Jan Kruse (jkruse@nclc.org) or Carolyn Carter (ccarter@nclc.org) (617) 542-8010

Consumers Have Until June 13 to Urge FCC to Protect Consumers from Illegal Robocalls

WASHINGTON – According to the call-blocking app YouMail’s Robocall Index, robocalls made to consumers in the month of May exceeded 4 billion, the highest one-month total on record. As the number of calls soars, the Federal Communications Commission (FCC) has opened an inquiry into a number of critical questions under the Telephone Consumer Protection Act (TCPA) that will determine whether this law remains viable as a protection against robocalls.

The questions presented by the FCC include:

• What constitutes an “automatic telephone dialing system” (autodialer)?
• How should the FCC treat calls to reassigned wireless numbers?
• How may a called party revoke prior express consent to receive robocalls?

What constitutes an autodialer?

The TCPA prohibits autodialed calls (ones made with an autodialer, formally known as an “automatic telephone dialing system”) to cell phones without the called party’s consent. Until recently, the FCC had clearly interpreted this prohibition as applying to the types of autodialers that businesses use today to make telephone calls or send out texts en masse. However, a decision by the U.S. Court of Appeals for the District of Columbia in March set aside the FCC’s interpretation of this term as too expansive, and sent the matter back to the FCC for reworking. The FCC then issued a request for public comments on how to interpret the law and what constitutes an autodialer.

“The real threat is that the FCC will issue a definition so narrow that virtually nothing will be considered an autodialer,” said Margot Saunders, senior counsel at the National Consumer Law Center (NCLC).

Last month, a coalition of business groups led by the U.S. Chamber of Commerce petitioned the FCC to clarify the definition of an autodialer. If the FCC lands on a definition that is too narrow, businesses represented by the Chamber can start to make more robocalls, a lot more.

“After a failed effort to expose consumers to more robocalls through the use of ringless voicemail technologies, the Chamber and its cohorts are once again working to weaken consumer protections from the scourge of unwanted robocalls,” said Saunders.

How should the FCC treat calls to reassigned wireless numbers?

Wrong-number robocalls are particularly maddening and difficult to stop. In many cases, the reason a consumer is getting wrong-number robocalls is that someone to whom the number was previously assigned consented to receive robocalls, and the caller has not have bothered to find out whether the number has been reassigned. The FCC is considering whether to establish a database that will be highly accurate and that will show whether a number has been reassigned. With this step, the FCC would cut wrong number robocalls drastically–protecting consumers and enabling responsible callers to limit their liability. Businesses making robocalls would be expected to reference the database before dialing and would be held liable for calling any individual who has not expressed consent.

How may a called party revoke prior express consent to receive robocalls?

The right to revoke consent is perhaps the most critical protection for consumers — allowing them to maintain the right to stop robocalls. Even in cases where consent is provided to the calling party as a matter of contract, often hidden in the fine-print of consumer financial contracts, the consumer must maintain the right to say “stop,” and the automated callers must stop calling.

Consumers have until June 13 to submit comments to the FCC using docket number 18-152 and urge the Commission to maintain a common-sense definition of an autodialer, establish a reassigned number database, and allow consumers the right to revoke consent to receive robocalls even when consent is given as a matter of contract.

“NCLC will be submitting comments by the June 13 deadline, urging the FCC to maintain a strong stance against unwanted robocalls and to protect consumers’ right to peace and privacy,” said Saunders. She encouraged individuals who have been disturbed and interrupted by robocalls to submit their comments as well.

For more information, including tips for consumers to reduce robocalls, visit NCLC’s Robocalls & Telemarketing page.

FOR IMMEDIATE RELEASE: June 6, 2018 || Media Contacts: Jan Kruse, National Consumer Law Center, (617) 542-8010, jkruse@nclc.org, Kelli Johnson, Texas Appleseed, (512) 473-2800, x103, kjohnson@texasappleseed.net, Nehama Rogozen, California Reinvestment Coalition, (415) 676-1320, nrogozen@calreinvest.org

WASHINGTON – Today marked another in a series of unilateral moves that signal the destruction from within of the Consumer Financial Protection Bureau’s (Bureau). The Bureau informed Consumer Advisory Board (CAB) members and members of two other CFPB Advisory Boards that their terms were terminated and that they were not permitted to re-apply. This action takes place two days after 11 consumer advocates and academics* shared their concern over the cancellation of the only two CAB meetings scheduled for this year, as well as the direction of the Bureau away from helping everyday Americans. “Firing the current CAB members is another move indicating Acting Director Mick Mulvaney is only interested in obtaining views from his inner circle, and has no interest in hearing the perspectives of those who work with struggling American families,” said Ann Baddour, CAB chair.

In a call with advisory board members this morning, Anthony Welcher, a political hire brought in by Acting Director Mick Mulvaney, cited these reasons for the termination:

• The Bureau wanted to save a few hundred thousand dollars, which is estimated to be less than .08 percent of the agency’s overall budget. This is despite the fact that members on today’s call offered to pay to attend meetings from their own budgets.
• The Bureau cited responses to a Request for Information (RFI) on External Engagement as a justification for the change. When pressed, Welcher admitted that the decision was made before the Request for Information had closed, and he could point to no RFI response calling for dissolving the advisory boards. A review of the RFI responses reveals there was no response calling for a restructuring or dissolution of the current advisory boards.
• The Bureau cited wanting a more diverse, smaller and inclusive group of people involved. Yet, the advisory groups are inherently a small, diverse group of members, based on the Dodd-Frank Act. Members questioned how Acting Director Mulvaney could have come to this conclusion based on the fact that there had been no meaningful interaction with members.
• One of the additional explanations for the firing of the Advisory Board members is a “new” plan to hold Town Hall meetings and intimate roundtable discussions — two long-standing practices of the CFPB — and therefore not a justification for firing over 60 committed and diverse volunteers.

This past Monday, 11 CAB members* stated their concern that Mulvaney was sidelining the talented, committed, and hard-working CAB members whose diversity of membership and perspectives has informed the CFPB’s work for years. With today’s action, Acting Director Mulvaney now has the opportunity to stack the board with new CAB members who likely will embrace his deregulatory efforts. “This partisan act will endanger families across the nation as well as our economy,” said Lynn Drysdale, CAB vice chair. “Federal law requires that the CAB be a well-balanced entity in terms of point of view and that it not be ‘inappropriately influenced by’ the Bureau director. Any other composition goes against the standards of the law.”

On May 18, the chair of the CAB sent a letter to Acting Director Mick Mulvaney regarding their concerns, and on May 25, 15 members of the CAB sent a follow-up letter to Mulvaney urging him to hold the June 6-7 meeting (which was subsequently cancelled). Acting Director Mick Mulvaney provided a response to the May 25 letter after a press call on Monday, June 4. The letter outlined that there is “no cause for concern” related to the cancelled meetings but did not address the many other Bureau actions that are undermining consumer protections for the American people.

Apparently there was “cause for concern” as all of the current members on all three Advisory Boards have been fired.

In reaching its decision, Welcher admitted that the Bureau had relied on conversations and roundtables that were not part of the official record for the RFI for External Engagement. The 11 members demand that the records of these conversations and roundtables be publicly released.

“Firing current members of the advisory board is a huge red flag in this administration’s ongoing erosion of critical consumer financial protections that help average families. Apparently Acting Director Mulvaney is willing to listen to industry lobbyists who make campaign contributions, but not the statutorily appointed Consumer Advisory Board members,” said National Consumer Law Center attorney Chi Chi Wu and member of the Bureau’s Consumer Advisory Board.

*The 11 members (affiliations for informational purposes only) are:

Ann Baddour, Texas Appleseed; Consumer Advisory Board Chair
Lynn Drysdale, Jacksonville Area Legal Aid, Inc. Consumer Advisory Board Vice Chair
Seema M. Agnani, National CAPACD-National Coalition for Asian Pacific American Community Development
Sylvia Alvarez, Housing and Education Alliance
Kathleen Engel,
Suffolk University Law School
Judith Fox, Notre Dame Law School
Paulina Gonzalez, California Reinvestment Coalition
Julie Kalkowski, Creighton University
Ruhi Maker, Empire Justice Center
Lisa Servon, University of Pennsylvania
Chi Chi Wu, National Consumer Law Center
Josh Zinner, Interfaith Center on Corporate Responsibility

FOR IMMEDIATE RELEASE: June 4, 2018 || Media Contacts: Jan Kruse, National Consumer Law Center, (617) 542-8010, jkruse@nclc.org; Kelli Johnson, Texas Appleseed, (512) 473-2800, x103, kjohnson@texasappleseed.net; Nehama Rogozen, California Reinvestment Coalition, (415) 864-3980, nrogozen@calreinvest.org

Washington – 11 consumer advocates and professors* who serve on the Consumer Financial Protection Bureau’s (Bureau) Consumer Advisory Board (CAB) expressed deep concern about the policies and direction of the Bureau. “We can’t forget that American families lost one-third of their wealth just a decade ago, due to reckless market practices that hurt individuals, communities, and honest businesses alike,” said Ann Baddour, chair of the CAB and director of the Fair Financial Services Project at Texas Appleseed. “As the Bureau unilaterally shifts its mission from one prioritizing consumer protection and upholding fair market practices to one focused on industry regulatory relief—we see families, once again, being left behind.”

On May 18, the chair of the CAB sent a letter to Acting Director Mick Mulvaney regarding their concerns and on May 25, 15 members of the CAB sent a follow-up letter to Mulvaney urging him to hold the June 6-7 meeting (which was subsequently cancelled). The letter noted that under the direction of Mulvaney, the Bureau is failing in its mandate to convene in-person meetings of the Consumer Advisory Board, as required by the governing law for the Bureau, the Dodd-Frank Act. The current Administration has taken further harmful actions, such as changing the mission of the organization and restructuring key offices without stakeholder or public input. The group has yet to receive a response to its letter.

Members of the CAB have a broad range of expertise related to consumer financial products and services, come from many regions of the United States, including urban and rural areas, and represent a diversity of races, ethnicities, ages, and genders. They include industry representatives, academics, and consumer advocates, whose work together has led to fruitful conversations and unexpected points of agreement. This diverse CAB has informed the Bureau of trends in financial products occurring across industries, demographics, and geography. This vital information from diverse groups is unavailable in any other forum and can lead to important interventions before serious harm is done to American families and the economy. Since he was appointed last November, the only interaction CAB members have had with Acting Director Mulvaney was a phone call on March 6, 2018, for 20 minutes.

When the Bureau was created in 2011 in the wake of the Great Recession, the initial CAB members were deeply involved in advising the Bureau regarding the many rules that the Dodd-Frank Act required the Bureau to issue. Subsequently, CAB members have had productive and open discussions on debt collection in preparation for an upcoming rulemaking, small business lending as part of the Bureau’s required study under Section 1071 of the Dodd-Frank Act, mortgage lending and servicing, and credit reporting.

Each year, one-third of the members complete their service to the CFPB and a new group of people are appointed to the CAB. The next round of appointments to the CAB will likely take place in the next few months. The group of concerned CAB members fears that the current leadership will eliminate this diversity of perspectives by appointing partisans who share only one viewpoint. The result will be a less robust body and, if the body is not well-balanced in terms of point of view as contemplated by the Dodd-Frank Act, or if it is “inappropriately influenced by” Mulvaney, the Bureau could violate the law.

Furthermore, the current administration has not engaged with the CAB, in its statutorily created advisory role to the Bureau, regarding the radical changes it has made to the Bureau. Some of these changes include effectively shutting down the Office of Students and Young Consumers, failing to bring any new enforcement actions except some already in the pipeline before the change in Administration, stripping enforcement authority from the statutorily-required Office of Fair Lending and Equal Opportunity, and joining with payday loan trade groups to seek a court order delaying compliance with the Bureau’s own payday loan rule.

*The 11 members (affiliations for informational purposes only) are:

Ann Baddour, Texas Appleseed; Consumer Advisory Board Chair
Lynn Drysdale, Jacksonville Area Legal Aid, Inc. Consumer Advisory Board Vice Chair
Seema M. Agnani, National CAPACD
Sylvia Alvarez, Housing and Education Alliance
Kathleen Engel,
Suffolk University Law School
Judith Fox, Notre Dame Law School
Paulina Gonzalez,
California Reinvestment Coalition
Julie Kalkowski, Creighton University
Ruhi Maker, Empire Justice Center
Lisa Servon, University of Pennsylvania
Chi Chi Wu, National Consumer Law Center
Josh Zinner, Interfaith Center on Corporate Responsibility

FOR IMMEDIATE RELEASE: JUNE 1, 2018 II Contact: Jan Kruse (jkruse@nclc.org) or (617) 542-8010

WASHINGTON – Yesterday, a joint motion was filed with the U.S. District Court in Texas by Plaintiffs Community Financial Services Association of America, Ltd., and Consumer Service Alliance of Texas, and Defendants Consumer Financial Protection Bureau (CFPB) and John Michael Mulvaney (interim director of the CFPB) to significantly delay the consumer bureau’s final payday rule.

The following statement is issued by National Consumer Law Center Associate Director Lauren Saunders:

“The consumer bureau finalized the payday rule over five years of research, outreach, and a review of more than one million comments on the proposed rule from payday borrowers, consumer advocates, faith leaders, payday and auto title lenders, tribal leaders, state regulators and attorneys general, and others. It is despicable that the consumer bureau’s interim director Mick Mulvaney is colluding with payday lending lobbyists who push unconscionable loans up to 400 percent annual interest on struggling families who can least afford it. The court should reject this blatant collusion to kill the payday rule in a way that Mulvaney could not legally do directly.”