September 18, 2019
Director Kathleen Kraninger
Consumer Financial Protection Bureau
1700 G Street NW
Washington, DC 20552
Re: Comment on Proposed Rulemaking on Debt Collection Practices, Docket No. CFPB-2019-0022, RIN 3170-AA41
Dear Director Kraninger:
The CFPB’s proposed debt collection rule sanctions and provides safe harbors for abusive and discriminatory debt collection, and would take the country in exactly the wrong direction. We therefore call on the CFPB to withdraw its pro-industry proposal.
New Economy Project works to promote economic justice and to eliminate discriminatory economic practices that perpetuate inequality and poverty. For years we have operated a legal hotline serving low-income New Yorkers, and have spoken to thousands of people harmed by unsubstantiated debt collection lawsuits, particularly those brought by debt buyers.
We testified about these practices at CFPB field hearings and documented them in a groundbreaking report, The Debt Collection Racket in New York: How the Industry Violates Due Process and Perpetuates Economic Inequality (June 2013), which shows that judgments stemming from debt collection lawsuits are disproportionally concentrated in NYC’s communities of color (see attached). Our forthcoming report will further show that NYC neighborhoods that are predominantly of color stand to have significantly more wealth extracted from them as a result of these debt collection lawsuits than predominantly white communities, further widening the racial wealth gap.
Attached please find the comment letter we submitted on February 28, 2014, urging the CFPB to enact a strong debt collection rule, including requirements that debt collectors have basic information before contacting someone about a debt; provide a meaningful response, including copies of original documents, to a person’s dispute of a debt; and have the ability to substantiate their claims before filing lawsuits. We resubmit this letter today because the CFPB’s proposed rule utterly fails to provide these and other basic, common-sense protections.
Susan Shin, Legal Director
Sarah Ludwig, Founder & Co-Director