DBA International Responds to Wall Street Journal
posted on 2009-10-20 by Roger Knauf
A Consumer Financial Protection Agency Would Offer
editorial "Another Scary Czar" (Oct. 8)
appropriately airs many concerns that the financial services industry has about
the creation of a Consumer Financial Protection Agency (CFPA).
organization recognizes the problems and potential excesses CFPA poses.
However, one regulator for both originating creditors and debt buyers could
eliminate confusion for the financial services industry and consumers alike.
CFPA must be given pre-emptive rule-making authority over states, or this super
agency will be an ineffective paper tiger with little authority to create
protection for consumers nationwide.
buyers today operate under state-by-state regulation, with different rules and
attitudes about enforcement. Several states have sought short statutes of
limitations—as little as three years—along with extinguishing the creditors'
rights to collect overdue bills, hoping to protect consumers from the excesses
of a small minority of debt collectors.
the time period in which creditors can collect on past due debts further
tightens credit standards in order to limit a lender's risk. It leaves many
creditors with no choice but to rush to the courtrooms seeking judgments, with
the cost of that unnecessary litigation passed on to the consumer.
a simple idea that has become a part of our national fabric, from the loans
that make purchasing a home possible, to the revolving credit that makes
smaller purchases convenient. It's incredibly hard to protect simple ideas in a
single piece of complex legislation. CFPA could be a viable solution to
consumer protection, but with federal pre-emption, this one agency could have
the ability to protect all consumers and businesses equally.