welcome, everyone. welcome to the consumerfinancial protection bureau's field hearing in portland, maine, on the issue of debt collection.the consumer financial protection bureau is an independent federal agency whose missionis to help consumer finance markets work by making rules more effective by consistentlyand fairly enforcing those rules and by empowering consumers to take more control over theireconomic lives. my name is zixta martinez. i am the associatedirector of external affairs at the cfpb. today's field hearing is being livestreamedon our website at consumerfinance.gov, and you can follow cfpb on twitter and facebook. we will begin today's field hearing with remarksfrom maine's attorney general, janet t. mills;
and the superintendent of maine's bureau ofconsumer credit protection, william lund. next, the cfpb's director, richard cordray,will provide remarks on the bureau's most recent work in the area of debt collection.following director cordray's remarks, assistant director corey stone will lead a discussionwith a panel of experts on the topic of debt collection. following the panel, we'll kick off the audienceparticipation portion of the field hearing. this portion provides audience members withthe opportunity to share their stories and your observations about what you are seeingand experiencing in consumer finance in your community. today's audience includes communityleaders, advocates, industry representatives,
and, of course, consumers. we are pleasedto welcome staff from the offices of senator king, congresswoman pingree, congressman michaudof maine, as well as staff of the office of congresswoman shea-porter of new hampshire.also with us today are elected state and local officials and their staff from maine, newhampshire, and vermont. thank you all for joining us today. so let's get started. our first speaker isjanet mills, who was elected last year to serve as maine's 57th attorney general. thisis not general mills first time in the attorney general chair. in 2008, she was elected asmaine's 55th attorney general and became the first woman to hold the office of attorneygeneral in maine. prior to her election as
attorney general, general mills served inthe maine house of representatives representing the town of farmington in industry. she servedon the judiciary committee, the criminal justice and public safety committee, and the appropriationscommittee. she also taught in the justice studies program at the university of maine-augusta. during her time in office, attorney generalmills has been on the forefront of consumer protection. most recently, she announced lastmonth that over 1,300 maine citizens were going to begin receiving checks to compensatethem for robo-signing abuses as part of the national mortgage settlement. attorney general mills, it is my pleasureto welcome you to today's field hearing.
[applause.] attorney general janet t. mills: thank you.thank you, ms. martinez. thank you very much. i thank you very much. as she mentioned, i am both the first andsecond woman attorney general in maine. that will be on jeopardy one of these days, directorcordray. [laughter.] attorney general janet t. mills: it is a pleasureto welcome you to portland, maine, those of you who are not from portland, maine, to talkabout debt collection. it's an odd thing to talk about on a beautiful summer day likethis but really a necessary topic to discuss.
you know, i am old enough to have heard aboutthe great depression, growing up, learning about it from my grandparents and my parents,aunts, uncles, and elders in the community. at that time, your credit cards were unheardof for that generation who lived through those very hard times. credit was like putting somethingspecial, a special suit or dress, on layaway at peck's or sears or wards, until savingsaccrued to pay for it and you could take it home free and clear, and it was yours. youdidn't keep paying for the item. and then the mass production of cars and trucksin the 20th century brought loan companies specializing in paying for vehicles over time,and is there anybody in this state that doesn't owe money on a vehicle?
the post-war housing boom of the 1950s engendereda mortgage loan industry that has grown by leaps and bounds, while mass production ofappliances and toys and manufacture of clothing led to volume consumption and consumerismand very intense competition among these businesses. good credit has become like a judge of character,second only to religion in some circles. debt is now sold on tv, on radio, on the internet,among national and international banks and financial institutions, as americans of allages are bombarded with ads that rival the seductive cigarette commercials of the '50sand '60s. postsecondary education, whether for profit or nonprofit institutions, theyhave been enslaved to federally ensured loans as much as they are to endowments, and nowwe are told that outstanding student loan
debt has surpassed outstanding credit carddebt, and student loan debt relief ads are crowding the airways and the internet, someof them sponsored by outfits which extract an upfront fee simply to enroll a debtor ina federal program that is already generally free. so when the recession came crashing down afew years ago and the subprime mortgage crisis brought the economy to its knees, those whowere drowned in debt, whether for school or for appliances or cars and mortgage loans,they had no escape, no resource, and often very little understanding of the cause ofthe crisis. we heard a lot about the failure of wall streetand the suffering of the major institutions
on wall street, the big banks too big to fail,but we heard very little about the suffering and the real life hardships of those consumerswho were brought to their knees by subprime mortgage lending and by the debt crisis thataffected every family in this nation. now popups on the social media pages of millionsof consumers' computers advertise debt relief services, and they're as plentiful as thespuds sprouting in the fields of aroostook county in july. no, this is not your grandmotheror grandfather's debt service or layaway plan with wards or peck's or sears. debt is anindustry. it's something my grandparents would never comprehend, and the question for usnow in the public sector is how to separate the predators from the benefactors, how toregulate without depriving consumers of legitimate
market choices, how to protect them from themselvesin many cases. the question also is how to rein in unconscionabledebt collection practices and debt relief services while permitting legitimate businessesto provide needed credit for consumers who see tough times. in maine, we've seen a rise in student debt.we've also experienced an increase in our senior population. we're the grayest statein the nation, as we read in the paper every day, and we have seen seniors being preyedupon by unscrupulous predators, some of them, leading them to conclude that they will needto work until the day they drop if they are going to support themselves, protect theirmeager social security income, and perhaps
even leave a piece of prosperity or securityto their loved ones. so, in maine, these are some of the challengeswe're facing, and we look forward to working with the federal government and particularlyrich cordray, director cordray, and the consumer credit protection bureau in addressing thesechallenges at every level. we also have a very active consumer protection division forsome 40 years, since the adoption of the unfair trade practices act and debt collection practicesact since that time, and we work very closely with superintendent will lund, and i'm gladto see him here today and to be conversing with him about our mutual issues. we are pleasedto work with him on litigation. we've brought four major pieces of litigation in the lastyear and a half on debt collection practices,
and i'm here to share those experiences withyou and to learn from this audience how we can do our jobs better. so i want to welcome you to portland to mainein particular and welcome director cordray and the federal consumer protection bureauto our beautiful state to discuss these issues of mutual concern. thank you very much. zixta q. martinez: thank you, attorney generalmills. our next speaker is william lund, the superintendentof maine's bureau of consumer credit protection. superintendent lund has led the bureau ofconsumer credit protection since 1987. he and his staff oversee many aspects of theconsumer finance industry, including nonbank
mortgage lenders, debt collectors, loan brokers,retail creditors, money transmitters, credit reporting agencies, and nonbank atms. hisoffice administers credit-related statutes and protects consumers by conducting complianceexaminations, responding to consumer complaints, issuing licenses, and providing consumer educationand outreach. if it all sounds familiar, much of it is the same as what the consumer financialprotection bureau carries out, so much so that i wonder how much we may have borrowedfrom maine and superintendent lund. superintendent lund, welcome. thank you forjoining us. william lund: thank you very much, and welcometo maine, and welcome to portland. general mills, those were outstanding remarks.i didn't necessarily appreciate your looking
to me when you talked about maine being thegrayest state in the nation. william lund: i am most pleased to be hostingdirector cordray, other administrators of the cfpb, fellow regulators from new englandstates and even the commonwealth. we will have a chief, a district court judge hereeither now or later today and many other distinguished guests. my name is will lund. i work with about adozen folks up at the state of maine's bureau of consumer credit protection. as you heard,i do feel—or as you can sense, i do feel a great kinship with the federal cfpb. first,the names of our agencies are amazing similar: consumer financial protection bureau versusbureau of consumer credit protection. in fact,
they are so similar that nearly every day,we receive consumer complaints from nebraska and iowa and other states from consumers thereasking for our help. we have developed a very rapid referral process to jet those complaintsdown to the federal regulators. secondly, as you have heard, with the exceptionof depository institutions, which my agency does not regulate, our jurisdictional areasare very, very well lined up, from truth in lending to fair credit reporting to fair debtcollection, respa, ability to pay standards for mortgages and so on. in terms of the numberof programs, we are ahead and we will remain ahead for years in my judgment unless thecfpb gets into such notable areas as rent to own, pawn ships, nonbank atm terminals,and litigation funding providers, so i think
we're safe in that race so far. third, i feel a kinship with the cfpb becausethey have—some would say stolen; i would say hired away—many state regulators tofill their ranks. so that when i am asked to meet with the cfpb, it is as if i am ata state regulators conference. the cfpb is beginning to understand what westate regulators have known for a long time, and that is that it's very difficult to providereal protection to consumers. i was talking to a cfpb staffer about 6 weeks ago, and isaid that i was going to be watching very carefully to see whether their high levelof consumer response was going to remain because it started out—or it has started out very,very strong. in the early days of the cfpb,
in my opinion, many creditors simply askedor responded, replied by giving—or by providing whatever relief was requested because, quitefrankly, they were intimidated by the cfpb. so now we will see whether that high levelcan continue, and so far, i think that it will. the folks i have talked to at the cfpb, i'vetold them that if creditors begin sensing that they are receiving form letters ratherthan careful analysis of consumer complaints that they will begin responding with formletters, and that really doesn't get to the root of consumer assistance. the staffer respondedby saying that they are really becoming or close to being overwhelmed, or at least there'sa danger of them being overwhelmed by the
numbers of complaints and that the complaintsare very complicated. again, that's something that state regulators have known for a numberof years. so i welcomed him to our world. i've done some prosecuting in the past, somedefense work, and some plaintiff's work, and i think it's best to think of each consumercase as a legal case that walks in your door. you get some facts from your clients. youget some facts that your client doesn't tell you and that you won't know until you go outon a limb for that client. you've got a law or regulation to apply to the facts. you'vegot limited resources and time, and you've got a host of other cases calling for yourattention. you get complaints if you do things in a way that the consumer is not happy with,and if you get in many years an occasional
thank-you note for a job well done, it's sorare that you post it and frame it and put it on your wall. debt collection is a large part of what wedeal with here in maine, and i am delighted that the cfpb is focusing on that issue, especiallyin the area of payday lending, collection of payday loan debts. we need all the helpwe can get, and i welcome their participation. i think it's great that the cfpb has cometo portland. i think it's great that regulators from our other new england states have traveledhere to join us. i think it's great that lawyers and industry representatives are also heretoday. it's a daunting challenge to provide effective consumer complaint while still recognizingthe legitimate business practices of the majority
of the members of the industry out there.we are partnering in every way possible with the cfpb to continue to do our best to helpconsumers. we are working to have access to the portal of consumer complaints, so thatwe can again effectively help maine consumers. so i am just delighted to be able to be heretoday to welcome you and to participate in this morning's and this afternoon's activities.so thank you very much. zixta q. martinez: thank you, superintendentlund. the next speaker is richard cordray who becamethe cfpb's director when he was appointed by the president on january 4th, 2012. priorto his role, director cordray led the cfpb's enforcement office. before that, he servedon the frontlines of consumer protection as
ohio's attorney general. in this role, herecovered more than $2 billion for ohio's retirees, investors, and business owners,and took major steps to help protect its consumers from fraudulent foreclosures and financialpredators. before serving as attorney general, he also served as ohio state representative,ohio treasurer, and franklin county treasurer. director cordray? richard cordray: thank you, zixta. i wantto especially thank general mills and superintendent lund for the both illuminating and actuallyquite personal nature of their comments, and we do apologize for fishing among the ranksof the state regulators, but we've gotten some of our best people from there, so wedon't apologize too sincerely.
[laughter.]ricahrd cordray: also, welcome and thank you to all of you who have taken your time tobe here today. we are here for this fielding hearing to say more about a very difficultmarketplace, which is the marketplace for the for the collection of consumer debts.this topic has long been a source of frustration for many consumers practically i'm sure foras long as there has been consumer debt, generating a heavy volume of consumer complaints at alllevels of government. this subject is also the focus of considerable enforcement activityby the federal trade commission, including yesterday, by state attorneys general, andmost recently now by the new consumer financial protection bureau. we are all determined tomake steady progress together to protect consumers
in this area, and it will take all of us todo that. debt collection also has more salience todaythan perhaps at any time in our country's history. in the wake of the recent financialcrisis, we see far too many people who have fallen into financial difficulties. many losttheir jobs. many lost their savings and even their homes. bills piled up and sat unpaid.many consumers fell behind, either because of bad decisions they made or because theywere victims of predatory practices or just of tough economic conditions during the greatrecession. the best estimates are that currently 30 million americans, nearly one out of everyten of us, came out of the financial crisis with one or more debts in collection for amountsthat average about $1,400 per person.
while we can put a number on debt, we cannotquantify the emotional toll that it takes on consumers to live under the shadow of indebtedness,especially if they are treated poorly by debt collectors. such experiences are almost inevitablyaccompanied by mounting feelings of frustration and helplessness. while many debt collectorsplay by the rules and treat consumers fairly and respectfully, others try to get aheadby flouting the rules. our job is to root out bad actors and protect consumers againstunfair, deceptive, and abusive practices and other legal violations which damage both consumersand also every debt collector that tries to operate within the law. we recognize that debt collectors representa wide spectrum of firms. they are an essential
part of the credit system. congress has concludedthat much lending should be done on the basis of the borrower's ability to repay, and weunderscored this notion with the important qualified mortgage rule we recently adopted.but the principle of lending based on the ability to repay runs in tandem with the broaderand accepted notion that people who owe money to others should in fact repay the money theyhave borrowed, and they should feel their obligation and responsibility to do so. in fact, i have served as a debt collectormyself in two distinct positions in local and state government. when i served as franklincounty treasurer, i set new records for collection of unpaid delinquent property taxes. as ohioattorney general, i was the primary debt collector
for the state government, where we also setrecords for repayment of funds, but i was also charged with enforcing the law againstdebt collectors that were operating in the state. i came to appreciate how challengingall of this work can be. at the same time, i came to know that debt collection can bedone the right way: treating people honestly and with respect for the circumstances inwhich they may find themselves. i also came to know how hard it is on people when debtcollection is done the wrong way. in january, the consumer bureau first beganto exercise its authority to supervise firms that have more than $10 million in annualreceipts from consumer debt collection activities. our supervision authority extends to about175 debt collectors and debt buyers, which
account for more than 60 percent of the consumerdebt collection industry as measured by annual receipts. and, yes, as general mills mentioned,it is now an industry. through our examinations, we are now in a position to evaluate whetherfederal consumer laws are being followed at every stage of the process, from credit originationto debt collection, and through our enforcement authority, we can take action when we seethe law being violated. last month, we held a joint roundtable withour partners at the federal trade commission to gather information and solicit input froma wide range of stakeholders on the integrity of information used in debt collections andin lawsuits against debtors. we often hear about collectors who pursue payments fromthe wrong consumers or for the wrong amounts.
this can happen when information about a debtchanges as it gets sold off, and this data may be unrecognizable to the consumer as thedebt gets passed down the line. at our joint roundtable, we heard strong consensus aboutthe need for robust national documentation standards and the need to maintain the accuracyof information used to collect debts. we will keep that in mind as we move toward a rulemakingprocess on debt collection issues. today, we are announcing other steps in our effortsto ensure accountability in this market and make sure that all consumers are being treatedfairly. we have already learned a great deal aboutthe debt collection marketplace from our ongoing supervision and enforcement work. based onthat work, and in support of it, we are issuing
two bulletins that warn companies about practicesthat will receive particular attention. the first bulletin makes clear that certainpractices in the collection of consumer financial debts violate the law, regardless of whatkind of entity engages in them. only the conduct of third-party debt collectors and debt buyersis subject to the specific restrictions and prohibitions set out in the federal statuteknown as the fair debt collection practices act. first-party collectors, or those seekingto collect directly on debt they themselves extended to a consumer, are generally notcovered by this statute. today's bulletin makes clear, however, that these first-partycollectors are subject to the general prohibition against unfair, deceptive, or abusive actsor practices in the dodd-frank financial reform
law, and many of the same kinds of restrictionsmay be applicable here as well. some collection methods violate the law becausethey involve deception. our bulletin identifies a number of practices that we view as likelyto be illegal in this regard. for example, no matter who owns the debt, the person collectingcannot use any false, deceptive, or misleading representation to get a consumer to pay. debtcollectors should not threaten legal action, like arrest or prosecution or imprisonment,when they do not have the authority to pursue it. they should not falsely represent theamount of debt that is owed or misrepresent that a consumer's debt could be forgiven.it is also improper to fail to post a customer's on-time payment correctly and then chargethem late fees, and intimidation, abusive
tactics, or profane language are simply outof line. these are just a few examples of data collection practices that can harm consumers. so today's bulletin makes clear that we willbe working to ensure that everyone collecting on consumer debts is following the law. thisis consistent with our new responsibility to engage in evenhanded oversight of entiremarkets, regardless of whether or not individual participants are chartered institutions, likebanks, or non-chartered institutions, like debt collectors and debt buyers. illegal practices by anyone harm consumers,erode consumer confidence, and undermine fair competition by responsible providers in thefinancial marketplace. the law clearly recognizes
that debt collectors can significantly hurtconsumers in ways that go beyond pure dollars and cents. much of the law was deliberatelycrafted to protect the dignity and privacy of the individual consumer and to ensure thathe or she is treated with the respect we all deserve, even if we have fallen behind onone or more of our financial obligations. our second bulletin warns companies that theymust be especially careful whenever they make statements about how paying a debt will affecta consumer's credit score, credit report, or creditworthiness. our experience indicatesthat the debt collection industry would benefit from cautionary counsel on how to have thesediscussions with consumers. debt collectors use all sorts of strategies, some legitimateand some illegitimate, to convince consumers
to pay their debts. one strategy is to discusshow the unpaid debt affects a person's creditworthiness, and we are concerned that some of these discussionscould be illegal. the text of this bulletin highlights someof the potentially deceptive claims that debt collectors may make to consumers about theircredit reports and credit scores. debt collectors know that the information in a credit reportcan have a powerful influence over a consumer's further access to credit, and they may usethis as leverage when talking to consumers. but some debts are too old, under federallaw, to be included on a consumer's credit report for most purposes. collectors may tryto conceal this fact, telling consumers that paying the debt would remove it from theircredit report, even though the debt does not
show up there anyway. we have also seen othertypes of cases where debt collectors mislead consumers by telling them that paying a debtwould improve their credit score or creditworthiness. the bulletin is intended to serve as a warningthat such practices are wrong and that the consumer bureau will be attentive to holdpeople accountable for illegal actions. today, we are also announcing two ways weare helping consumers help themselves to hold debt collectors accountable under the law.first, the consumer bureau now will accept consumer complaints about debt collection,including those referred from maine, which has long been one of the issues that consumerscomplain about most frequently at all levels of government. so we will be able to addressconsumer debt collection complaints and help
individual consumers try to reach an appropriateresolution with their collectors. consumers can submit a complaint against anycompany that tries to collect a debt from them, but consumers can also do more. theycan choose to submit a separate complaint against the company with whom they had theoriginal account. this intake system will be useful as a feedback mechanism for creditorsthat have hired third-party debt collectors or sold their debts. they will be made awareof the kinds of struggles consumers are having with their continuing debts and can potentiallyrethink what is happening to their customers or cut off those collectors they deem to beproblematic. we have found consistently that complaintsprovide us with essential insight into the
actual experiences of consumers who are navigatingthe complex financial marketplace. it is through our consumer response function that we areable to have the most direct and immediate impact on the lives of individuals. once a consumer submits a complaint to us,it is screened and forwarded to the appropriate company. the company reviews the information,communicates with the consumer as needed, and determines what action to take in response.it then reports back to us and to the consumer. we invite the consumer to review the responseand provide feedback. we review the feedback, using this information along with other information,such as the timeliness of the company's response, to help prioritize complaints for investigation.we already accept complaints on many other
consumer financial products and services,mortgages, credit cards, student loans, auto loans, bank accounts, credit reports, andwe are pleased now to be able to take debt collection complaints as well. we will learnmuch from these efforts. the second way we are helping consumers isby publishing five different action letters on our website that consumers themselves canuse to communicate with a debt collector. this approach reflects our view that self-protectioncan be an effective form of consumer protection in some situations. several of the lettersare designed to help consumers gain valuable information about the debt being collected.putting a specific request to a debt collector in writing is often the best way to do this.other letters help consumers protect themselves
from unscrupulous behavior by debt collectors.these action letters are valuable because consumers have rights under the law, but theyoften do not know what rights they have or how to assert them. for many americans, self-helpis a good starting place in the struggle for dignity and respect. these letters are nota substitute for legal advice or representation that consumers may want to seek as a meansof preserving their legal rights, but they are important initial tools that consumerscan use to protect themselves. the first action letter is for consumers seekingmore information about a debt the collector has told them they owe. it asks specific questionsabout the debt and can be used to inform the collector that the consumer is disputing thecharges until they have more information.
this letter is useful for a consumer who maynot immediately recognize the nature or amount of the debt or who needs to find out moreabout the debt before deciding whether to pay it. the second letter tells the debt collectorto stop contacting the consumer unless the debt collector can show evidence that theconsumer is responsible for that particular debt. the letter also makes clear that theconsumer is disputing the debt. consumers who affirmatively believe they have no responsibilityto pay the claimed debt may want to send this kind of letter. the third action letter is for consumers whowant to restrict when and how a debt collector
can contact them. under the fair debt collectionpractices act, debt collectors are prohibited from contacting a consumer about a debt ata time or place they know, or should know, is inconvenient. until the collector is puton notice, more specific notice of the consumer's individual circumstances, however, much contactmight occur that the consumer actually finds harassing. in this letter, the consumer tellsthe debt collector how they would like to be contacted, which is a useful option fora consumer who wants to work with the collector to resolve a debt. the fourth letter is for consumers who havehired a lawyer. generally, the debt collector should be directed to contact the lawyer insteadof the consumer in this situation. so in this
letter, the consumer provides the debt collectorwith the lawyer's information and puts the collector on notice by specifying that anyfurther contact should be made only with the lawyer from that point forward. the fifth action letter tells the debt collectorto stop any and all contact. under the fair debt collection practices act, a collectorgenerally must stop contacting a consumer after it receives a written request to doso. but it is also important for consumers to note that stopping contact from a debtcollector does not cancel the debt, and it does not prevent the collector from suingthem. for consumers who find that they are being harassed by a collector, this lettercan be a valuable option.
the point of these action letters is to placedebt collection activities on the plane where they belong. they should be business dealings,and they should not become personal in nature. it is simply not true that every consumercontacted by a debt collector is a so-called "deadbeat," and even those mired in tougheconomic situations are entitled to the dignity and respect they deserve as free and equalhuman beings. giving someone grief and making their life miserable are familiar but unacceptabledebt collection tactics. armed with knowledge of their rights and how to pursue them, consumerswill be better able to stand up for themselves and defend against such tactics. we ask thosein the consumer movement to help us make people aware of these resources that are now availableas part of our ask cfpb page on the consumer
bureau's website at consumerfinance.gov. the marketplace for the collection of consumerdebt remains a very challenging market for consumers. it did not get this way in a hurry,and it will take time to change it in a lasting way. but we will work closely with our partnersacross the country to achieve that important result. consumers need to know that they havesomeone who will stand on their side, and we want to ensure them the dignity of beingtreated fairly, even in adverse economic conditions. we take these goals to heart, and they willguide our actions. those debt collectors that are treating consumers fairly have nothingto worry about and should go on about their business, but those using illegal means tocollect consumer debts should be forewarned
that we will not tolerate such behavior. wewill use our supervisory and enforcement authorities to identify and eliminate illegal practiceswhile simultaneously empowering consumers to stand up more effectively for their rightsunder the law. promoting honest behavior in the marketplaceis in our country's best interest. both responsible businesses and consumers stand to benefitby enforcing adherence to these basic norms. there is no reason why debt collectors cannottreat consumers with dignity and respect, even as businesses are able fairly to collectthe money that is actually due to them. thank you for joining us here today, and ilook forward to vigorous and enlightening discussions. thank you.
zixta q. martinez: thank you, director cordray. at this time, i would like to invite staffand distinguished panelists to join the stage. while the panelists take their stage, i wantto take a moment to thank those joining by livestream. you can access the web link bytwitter or facebook, and before we get started with our panel discussion, i will take justa few moments to show you how you can file a complaint with the cfpb. consumers will be able to submit their complaintsregarding debt collection by clicking on the debt collection icon on consumerfinance.govor calling our contact center at 855-2372. when submitting a complaint, consumers willtell us the type of debt, the specific issue
and sub-issue, their narrative about whathappened, and their desired resolution. when consumers submit their case, they willbe asked to tell us the name and information of the company that is contacting them aboutthe debt, the name and information of the company that the original account was with.consumers can choose to submit a separate complaint about each company, if there aremore than one, using the single complaint. they can also add any documents, like theirg notice, if they received one from the debt collector. consumers provide their contact informationsimilarly to all other product complaints. on the review and submit page, the consumercan see exactly what information will be sent
to the company and edit their informationbefore submitting the complaint. after they submit the complaint, consumers will receivea complaint number for each company that they submitted a complaint for and can track thestatus of each complaint by logging at consumerfinance.gov/complaint. additionally, consumers can find the sampleletters that director cordray described at consumerfinance.gov/blog/debt collection/or at ask cfpb when you have questions. so let's get started with our panel discussion.deputy director antonakes joined the cfpb in november 2010 as the assistant directorof large bank supervision and was named the associate director for supervision, enforcement,and fair lending in june of 2012. his background includes more than two decades as a financialservices regulator. in january of this year,
he was named as the acting deputy director. corey stone is the assistant director forthe cfpb's office of deposits, cash, collections, and reporting reports. his team works acrossall of the bureau's divisions to build market intelligence, develop policy options, andcoordinate with consumer groups and industry to do outreach in the markets it covers, includingdebt collections. corey, you have the floor. corey stone: thank you, zixta, and thank youand all of your colleagues for organizing this out-of-the-beltway event. we know there'sa lot that goes into bringing all these people together in places, and these are an importantpart of our outreach as a bureau. so it's
a pleasure to be here in this beautiful cityand this gorgeous hall. director cordray spoke today about a numberof different initiatives that the bureau is taking in the debt collections market, andthese are quite varied, and they really reflect the complexity of debt collections. thesecut across—our debt collections activity cuts across all of the different kinds ofcredit in the market. we tend to talk about credit card debt because it is the biggest—ithas been the biggest category for a while, but the fastest growing categories of debtcollections today are student debt and medical debt, and each of those has particular complexitiesand contexts that we need to pay attention to.
there are over 4,000 debt collection companiesand many more creditors who are using debt collection agencies to collect debt, and sothese represent local players, national players, a vast array of different kinds of organizationsand companies of varying levels and sophistication. and we need to pay attention to that and theirability to comply with the law. and there are many different parts of theprocess. so from initial notice to consumers, all the way down to, as a last resort, litigationand all of the things in between, from the telephone calls to the voicemails to the conversationsthat happen over the phone, each of those has a particular importance in the processand present opportunities for effective collection and also opportunities for harm to consumers.
so we use this event as we used our roundtablelast month as part of being a data-driven agency to learn more about the process andlearn more about what consumers are experiencing and how we all at the state and national levelcan work to make it better. we have assembled distinguished panels todayof consumer advocates on my left and industry representatives on my right, and we will beintroducing the panelists, each of whom will give 3 minutes of remarks, and then zixtaand steve and i will be posing questions to them as part of the larger effort today tolearn more about what consumers are experiencing and how we can make the system work better. so i am going to start by introducing ourconsumer panel on our left. we will begin
with daliã© jimã©nez, who is an associateprofessor of law and the jeremy bentham scholar at the university of connecticut law school.we will then hear from alexis iwanisziw, a research and policy analyst for the new economyproject in new york city, and finally, we'll hear from frank d'alessandro, who is the southernregional directing attorney of pine tree legal assistance, here in portland. daliã©? dali㉠jimã‰nez: thank you, corey. it's apleasure to be here, and i'm very excited, both about the announcements that directorcordray just made with regards to the bureau's activities in debt collection as well as reallyexcited to learn about the letters that have
just been posted to the cfpb website. i amexcited because those letters really aim to empower consumers to communicate with debtcollectors, and consumer, yes, can communicate with debt collectors now. the problems mightbe that they may not feel like they have the right language or understand their rightsor know what kinds of questions to ask, and these letters go to that. and this is interesting to me because of thelarger concern i have about the number of lawsuits filed in debt collection proceedingsand the number of consumers that actually never show up to answer those lawsuits which,depending on which study you read, goes between 70 and 90 percent of consumers who are suedin a debt collection proceeding that don't
show up, and so that ends up meaning thatfor those consumers, the collector can get a default judgment, which in many cases canmean garnishment or a lien on their home if they have one, which is a very serious consequencefor consumers, and the question is why is it that they don't show up. is it becausethey don't understand the consequences? is it because they don't know their rights orthey're intimidated by the process, by the legal system? and i actually have a study with lois lupicaat maine law school and professor greiner at harvard law school, where with pine treelegal assistance as well, that is going to try to find out the answer to that question,by giving consumers a sort of empowerment
package, giving some consumers an empowermentpackage with information about how to resolve or how to help themselves in a lawsuit andgiving some an offer of representation by pine tree, and seeing whether those thingsactually make a difference in either the number of consumers who engage with the debt, eitherby showing up or by contacting the collector, or the results of the lawsuit, the outcomeof the lawsuit, or even more importantly later on, their financial health and well-being.i think these are important questions to cfpb. there are many, many questions and issuesin debt collection. as corey said, it's a very complex system, and it really does touchon the lives of many, many consumers, 30 million and counting, and implementation' very excitedthe cfpb is putting a lot of their efforts
behind this. thank you. corey stone: alexis? alexis iwanisziw: thank you, and thank youto the cfpb and to director cordray for having me here today. my name is alexis iwanisziw,and i am a research and policy analyst at new economy project, former. nedap. we promoteeconomic justice in low-income communities and communities of color in new york city,and among our activities, we bring impact litigation, and through a legal hotline, wework with low-income new yorkers to resolve a host of financial justice issues. our hotline is flooded with calls from peoplewhose lives are being devastated by abusive
debt collection lawsuits. people can't paytheir rent or can't pay their utility bills because collectors have frozen their bankaccounts or are garnishing their wages, and because of too often fraudulent debt collectionjudgments that appear on credit reports, people are unable to find housing or even jobs asmore and more employers are checking people's credit. i'm going to focus today on two major debtcollection issues we see in new york: first, the prevalence of abusive debt collectionlawsuits particularly filed against people living in communities of color; and second,the large bank's role in facilitating abusive debt collection tactics.
we just released a report called the debtcollection racket in new york. that report shines a light on abusive debt collectionlawsuits filed by collectors that routinely obtained default judgments from the courts,even though they almost always fail to present evidence of the debt, as the law requires.these abuses stem largely from structural problems related to the buying and sellingof old charged-off debts. we also found that new york's communitiesof color have disproportionately borne the brunt of these abusive debt collection lawsuits.communities of color make up all 10 of the new york zip codes, with the highest concentrationsof default judgments and debt collection lawsuits. these are the very communities that banksredlined for decades, that have been at the
epicenter of the predatory lending and foreclosurecrises. these abusive debt collection practices are directly linked to broader economic discriminationand wealth inequality. another problematic debt collection issueswe've seen relates to banks that illegally facilitate and profit from payday lenders'abusive collection tactics. some internet payday lenders make loans in new york illegally,and as the cfpb has documented, payday loans trap people in an inescapable cycle of debt.we've seen that when borrowers request that banks stop payday lenders' illegal debits,which they have the right to do under federal law, the bank often refuses and then chargesoverdraft fees when there isn't enough money to cover the payday lenders' attempt to debits.
in the case of our client, ms. b, payday lendersattempted to debit her bank account 55 times over the course of two months, and her bank,one of the country's largest, charged her more than $1,500 in overdraft fees. the bankthen proceeded to harass her to pay the overdraft and negatively reported her to chex systems,which prevented her from opening a new checking account at another bank. we sued the bank over these illegal practices,and i'm pleased to report that we reached a groundbreaking settlement with them, andthe bank has committed to revamp its systems and procedures to ensure that it now properlystops payments upon customers' requests. our organization has worked on debt collectionabuses for years as a matter of racial justice
and neighborhood equity. we look forward tothe cfpb using its authority to create meaningful standards for bank's sale of charged-off debt,to address rampant robo-signing abuses, and other violations of law that i've describedtoday. thank you. corey stone: thank you. frank? frank d'alessandro: thank you. i'd like tothank the cfpb for getting outside the beltway today and being in portland and permittingour participation in this field hearing. when pine tree legal assistance first opensits doors nearly 50 years ago, one of its first major court victories involved a challengeto the longstanding debt collection practice in maine that permitted judgment creditorsto imprison maine debtors until a judgment
was satisfied. since the recent economic collapseprecipitated by under-regulated financial markets, pine tree has intensified its workin the area of consumer rights, first with the defense of homeowners and foreclosureactions and more recently with the representation of consumers against third-party debt collectors. our recent experience in both foreclosureand credit card debt collection cases has been remarkably similar. in both instances,we encountered a system dominated by mortgage services and debt collectors who are ableto obtain court judgments with very questionable evidence. we encountered homeowners and consumersthat were terrified that nonpayment of a mortgage or credit card debt would result in theirincarceration, and we encountered stiff resistance
from many quarters to the notion that attorneysshould even appear in court and vigorously advocate for a homeowner behind on their mortgagepayment or a family who might be over their head in credit card debt. we have learned two things from our experience.the first is that legal representation makes a dramatic difference in the outcomes forhomeowners and consumers, and, second, additional legal protections are desperately needed tofully address consumer interests. the vast majority of cases brought by debtbuyers in maine courts result in a default judgment. we also routinely observe casesin which people agree to make payments that they cannot afford from income that is exemptfrom collection, such as disability or retirement
benefits. this is wrong. it's against thelaw, and we need to do better. in order to remedy the problems that we haverepeatedly observed, at a minimum, the following four steps should be taken. first, every communicationfrom a debt buyer or debt collector with a consumer should be in plain english and explainthe steps a consumer needs to take to avoid a default judgment or another loss of theirrights and describe the types of income that a consumer may have that are exempt from collection.second, debt collectors should be prevented from taking any action to convince a consumerto make payments on a debt that is time-barred or otherwise uncollectable at law. third,subsequent debt buyers need to be held responsible for the acts of previous debt collectors;and, finally, action must be provided to all
consumers, so they have the power to bringa case on their own behalf to make sure that legal protections are enforced. that's it. corey stone: great. thank you, frank, andthanks to all of our consumer advocate panelists. i will now introduce our industry representatives.frist, we will hear from joann needleman, who is president-elect of the national associationof retail collection attorneys, and after joann, we'll hear from patrick morris, whois the ceo of aca international, the largest trade association of debt collectors. joann? joann needleman: thank you, corey, and thankyou, steve, and thank you, director cordray and the whole cfpb staff for inviting me toparticipate in today's field hearing. portland
is my second favorite city. i was coming hereanyway, and thank you very much for allowing me to do that a day early. and it's an honorto be here, and thank you to the participants in the audience today for coming. my name is joann needleman, and i am an attorneyand vice president of the law firm of maurice & needleman, which is located in both pennsylvaniaand new jersey. my firm represents clients in the consumer financial services industry,and we litigate extensively in matters involving the fair debt collection practices act, whichyou will hear today being referenced as the fdcpa, and the fair credit reporting act,which we will talk about in terms of fcra. i've been a collection attorney for 17 years,and, additionally, as corey indicated, i am
the president-elect of the national associationof retail collection attorneys, also known as narca. narca is a trade association comprisedof over 700 debt collection law firms committed to the fair and ethical treatment of all participantsin the debt collection process. our members are required to adhere to narca's code ofprofessional conduct and ethics, and as attorneys, we are required to practice law in a mannerconsistent with our responsibilities as officers of the court. as attorneys, we must also adhereto applicable state and federal laws, rules of civil procedure, state bar licensing, andcertification requirements, and rules of professional conduct for our particular states in whichwe practice. the cfpb's recent bulletin regarding the prohibitionof unfair, deceptive, abusive acts or practices,
as we will probably call as "udaap" today,and the collection of consumer debt identifies these same prohibitive acts as are alreadyidentified in the fdcpa. debt collectors who engage in udaap as well as those who intentionallyignore and violate the fdcpa is unacceptable. ultimately, this harms consumers by creatingcommunication barriers between legitimate debt collectors and consumers who legitimatelywant to resolve their debts. narca concurs with the cfpb that consumersmust be treated fairly and with respect, and narca supports measures that will help consumersdistinguish professional, responsible, and ethical collectors from those who are not. narca appreciates the cfpb's collaborativeapproach to finding solutions to the issue
facing consumers. over the past several years,representatives of narca have met with representatives of the cfpb personally to discuss these issues.the cfpb has always provided an open ear and a forum for thoughtful discussion and theexchange of ideas and viewpoints. i was very pleased to participate in last month's cfpb/ftcroundtable discussion which helped identify issues and possible solutions regarding debtcollection data. narca was also very appreciative for the opportunityto offer its input on the design of the cfpb's debt collection complaint portal, which yousaw on the slides this morning. the cfpb was very gracious in allowing its representativesto present a webinar to all narca members on the complaint process, and narca had theopportunity to encourage its members to register
their contact information with the cfpb. through this interaction, narca has developeda better understanding of the cfpb's initiatives and deep commitment to consumers. likewise,i believe the cfpb has come to understand the viewpoints and concerns of narca's members,which also demonstrates a commitment to consumer protection and fair and reasonable regulation. expanding on the open line of communicationnarca has enjoyed with the cfpb, it is also critically important that consumers communicateand participate as well, not with just the cfpb or state regulators, but also with thepeople who are attempting to collect your debt. communication is the single most criticalaction that can lead to resolution of issues.
if you receive a letter or a call from a collectionattorney, respond. open a dialogue. ask questions. be specific. if you dispute a debt, let usknow what it is that you dispute. remember that communication is a two-way street. while the cfpb has provided you with somesample letters that may be helpful in some circumstances, the idea is to communicate—theidea is not to communicate in order to build barriers, but to communicate in order to achievea resolution. narca has also developed tips for consumers in responding to a consumer—toa collection attorney, and it is on our website at narca.org. finally, if you receive a summons to appearin court, please, please appear. i know the
court process seems intimidating, but it isdesigned to provide a level playing field that treats all parties equally. it does thisin two ways. first, as collection attorneys, we are bound by our ethical rules of professionalconduct and state bar rules to treat consumers—to communicate with consumers in certain ways,especially when they don't have attorneys, and, second, inside the courtroom, you havea completely impartial, unbiased judge who is the ultimate finder of fact. this is youropportunity to explain your side of things, and it is important that you be heard. today's hearing epitomizes the cfpb's collaborativeapproach with the participation of industry and advocacy panelists and, most importantly,the consumers in this audience. i particularly
want to thank them for taking the time outof their busy day to attend today's hearing. thank you. corey stone: thanks, joann. pat? frank d'alessandro: thank you, corey. the aca is pleased to participate and appreciatesour ongoing work with the cfpb to help the bureau better understand our industry andhelp our members better understand the bureau. to give you a little context, aca internationalis the largest trade association in the world for debt collection. we have about 5,000 memberworldwide. we've worked with the cfpb from the outseton its creation of the consumer complaint
resolution process for debt collection thatthe director mentioned earlier. aca has helped provide insights and feedback from our membershipon important aspects unique to consumer debt collection that the cfpb should be consideringas it created this complaint resolution process. last month, similar to what narca did, wejointly hosted a teleseminar to help aca members learn about the details of this new process,which was immensely valuable to our members, and there was high participation. and we thankthe bureau for providing the speakers for that as well. cfpb continues to work with aca to get memberquestions about the complaint resolution portal answered from that seminar, and aca continuesto encourage its members to sign up to the
complaint resolution company portal, and manyaca members have participated in the training that's been held by the cfpb. the last counti heard in the last couple days was over 600 or so of our agencies have already signedup. now, while some might want to paint with abroad brush—and i don't want to quibble with your seating arrangements, corey, butour view is that debt collectors are not the enemy of consumers. our members take collectionlaws and consumer complaints seriously and want to resolve them and deal with consumersevery day in a respectful and professional manner. we believe that consumers are bestserved when they have the opportunity to communicate and resolve their complaints, as was mentionedearlier. communication between a consumer
and a debt collector is absolutely critical,and without that communication, we can't resolve the reason for the contact. we can't identifya wrong party contact, and, importantly, without communication, we can't address and resolveconsumer complaints. we are heartened by the cfpb's recent reportoutlining a reduction in consumer complaints against debt collectors, but, no, there ismuch more work to be done to continue to reduce complaints from ever occurring and resolvingexisting complaints. based on the counsel of the better businessbureau's annual report on inquiries and complaint statistics, we have reportedly shown thatwhen given the opportunity to communicate with the consumers, we can be successful ataccomplishing this feat. u.s. collection agencies
resolved 86 percent of the consumer complaintsreceived in 2012, exceeding the national average of 77 percent for all industries. in society, debt collectors and others arepublicly measured by the raw numbers of complaints received. it garners significant media attentionand is often used as a benchmark of industry performance, yet often there is also littlecontext to these consumer complaints. it is imperative to point out that just becausea consumer has complained to the cfpb does not mean or imply that the debt collectorhas actually violated the law or engaged in wrongdoing of any kind. each year, creditors and debt collectors makemore than 1 billion contacts to consumers,
and the number of complaints is relativelysmall in comparison. we need to keep this in mind before castigating debt collectorsor connecting complaints automatically to bad behavior. our members believe consumers have importantrights under federal and state law and describe to be treated fairly, respectfully, and freeof deception and abuse. it is a hallmark of our training, and aca will continue and encourageactive communication between consumers, consumer groups, and third-party debt collectors, inaddition to working with the cfpb to provide feedback that refines the resolution processto ensure that it accurately reflects the environment of consumer debt collection. thankyou for having me.
corey stone: thank you, pat, and thank you,joann and daliã©, alexis, and frank. we will now begin our questions with actingdeputy director antonakes. steve antonakes: great. thank you, corey.good afternoon, and welcome, everyone. like everyone else, i'm especially pleased to beat this outside-the-beltway hearing, especially pleased because it's an opportunity for meto come home to new england. i want to welcome all of our panelists here today. and, patrick for being patient and for beingthe last to speak, you have the benefit of getting the first question. so director cordrayannounced earlier today that we will start taking complaints on debt collection, andyou also referenced some of the efforts of
your members to become ready for this process.i just would ask you to speak a little bit more so about how your members feel abouthaving complaints taken on debt collection practices by the bureau. frank d'alessandro: thank you. thank you forletting me go first again—or last first. we've worked with regulators at the statelevel, certainly at the federal level, on matters pertaining to industry oversight sincethe association was formed in 1939. our members, i think, are very familiar with the laws andthe regulations governing their work. as i mentioned earlier, we do extensive trainingthrough the association and at all the agencies that i visited to make sure that members arefamiliar with that.
our members have welcomed the developmentof the complaint portal. our members, i believe, are ready for it. most have already robustinternal compliance departments, and as i had mentioned earlier, as we had put the wordout that you all were starting to ask for the contact at the agency, there was a quickresponse. our agencies want to get these complaints resolved and want to make sure that you allhave the person to talk to, to get them resolved timely. steve antonakes: thank you. zixta q. martinez: i want to add my thanksto the panelists as well. we learn a great deal from these conversations and are gratefulthat you are willing to engage in conversation
with us. this question is for professor jimã©nez. professorjimã©nez, can you describe what you see as some of the benefits and potential challengesas well to having the cfpb take debt collection complaints from consumers? dali㉠jimã‰nez: absolutely. i think—well,i'll start with the benefits because i think there are many, and they are very excitingactually. one is just the availability of information for the bureau and other regulators,but where the problems might be, both physically where they might be around the country, aswell as what kinds of collectors, whether it's a particular type of debt being collectedor a particular size or company that is collecting,
and any problems associated with that, soa sort of heat map, if you will. i think that is invaluable to determining where to focusefforts, limited resources in terms of enforcement and other investigations. the other one is that all of that information,if the bureau continues to do what it's been doing in the past, will be public at somelevel for the rest of the country to search and to look at and to see whether their stateor their area is particularly hard hit by these types of complaints or others and touse that in their—you know, whether it's an attorney general or others as they arepursuing cases or trying to resolve some of these issues.
the fact that beginning with this system,unlike the ftc, we will be able to—sorry—the cfpb will actually do some investigation ofthe complaints if it thinks it's warranted, will actually resolve them in the sense of,yes, there is a violation of law here or there isn't, not all, but the ones with its limitedresources, it can get to. we will actually have some more detailed informationabout what really is going on. are consumers complaining about things that aren't violationof law, but they just perceive as inconvenient or they think they might be violations oflaw, or are there really true violations going on here? and that sort of gets me to the downside orthe potential pitfalls here, and that is,
if the volume that the ftc was seeing playsout with the cfpb or anything close to that, it will be i think very difficult, given thestaff that cfpb has, to really pay as much attention to those complaints as it wantsand as it has with other kinds of services. so i think that is the challenge in the balancehere, but i'm very hopeful. thank you. corey stone: i have a question for joann,and this relates to the bulletin director cordray announced today related to communicationsabout credit reports and credit scores. how feasible is it for a collector or, for thatmatter, a collections attorney to know that a debt is or isn't obsolete for credit reportingpurposes? joann needleman: thank you for that question.
the answer is it's really—it depends. ihate to give you that answer, a typical lawyer answer, but sometimes it's not feasible, and,again, it comes back to issues of information. the fcra says that you can't report a debtthat is 7 years past default, and sometimes default, does that mean charge-off? does thatmean last date of payment? so we have to define what that is. sometimes there's information where we don'tknow. maybe there was a payment, so maybe that could extend the time. so it can be difficult,but i can tell you from my perspective in dealing with members who are collection attorneys,that is not an issue that we run into because most of our members don't credit-report. tothe extent that our members do any pre-litigation
activity and have communications with consumers,yes, that is an issue. i think that there's—i know that there's trading on that issue, butit's not—i think that's something really more that patrick can talk about because ithink that many of his members are involved in more credit reporting, just based on agenciesand working with creditors, more so than my member law firms. but i think your question raises some issues,and, again, that goes back to what we were talking about last month. it's the informationof data integrity. how do we get the proper information to know what is the default, andhow does that information travel? corey stone: and thank you for pointing outthe ambiguity of when the clock starts. it
is i think under the fcra the date of firstdelinquency rather than default— joann needleman: yeah. corey stone: —which has its own definitionalissues, but, pat, do you want to—do you have anything to add? frank d'alessandro: yeah. let me just startby saying i'm not an attorney, and i'm not going to fake it with this question. frank d'alessandro: yeah. i just think kindof an important point to bring forward is, look, the debt collector's work in the third-partyworld relies on the data provided by the creditor, and a bunch of folks have already referencedthe roundtable that a lot of us participated
in last month with you all and the ftc. andthis includes account details, documentation, information about the consumer believed tohave incurred the debt. certainly, i think the information provided by the creditor isgoing to be pivotal to what most third-party collection agencies then have and can do. corey stone: thanks. steve antonakes: so my next question is foralexis. alexis, as you know, certainly credit scores are comprised of many variables, manyof which are interrelated. with that in mind, is it possible that a creditor could reliablytell a consumer that taking a certain action would have a direct impact on their creditscore?
alexis iwanisziw: as we see on our hotlineand we hear from callers to our hotline—we do have a legal hotline—it is absolutelythe case that debt collectors will tell people that paying a debt will have a certain effecton their credit score, even when the collector may not be able to be reliably sure that thatis the case or may not be reporting to credit bureaus. so the cfpb's action today issuingthe bulletin, reining in that abusive practice is really important . and i'd just like to say one thing about whythis tactic works for collectors also. it's because people are so concerned about theircredit and how it determines their access to jobs, to housing, to insurance, and, ofcourse, loans as well. and the credit bureaus,
the private companies that aggregate thisinformation, have really stepped up their marketing, and this expanding use of creditinformation has a discriminatory impact on lower income people, on people of color whoare too often targeted for predatory financial products. steve antonakes: great. thank you, alexis. zixta q. martinez: this next question is forpat. pat, can you talk a little bit about standard procedures and creditor operations?for example, is it a standard procedure in creditor operations to do business in a mannerthat might be considered an fdcpa or other violation if the creditor were also a debtcollector?
frank d'alessandro: well, again, the majorityof our members are third-party debt collectors and collection attorneys and not creditors,but based on what we know from our creditor members, most of the large creditors alreadyconfirm to the internal collections process, to the spirit of the fdcpa, for a lot of reasons,the least of which, as i think most of the attorneys here will know, the ftc alreadyhas the ability to consider nonconforming practices to be unfair or a deceptive tradepractice under section 5 of the ftc act. zixta q. martinez: thank you. corey stone: so i have a question for frank,and this is maybe a great one for consumers. how can a consumer ensure that someone whomay be calling them about a debt has a legitimate
right to contact them and collect from them? frank d'alessandro: well, that can be a difficultquestion to answer. under the fair debt collection practices act, the debt collector is supposedto provide information validating the debt to the consumer within 5 days of the initialcommunication with the consumer. the problem is when that doesn't happen and a consumeris not aware of their rights, there are other protections in the statute. the consumer canrequest that information if they request it from the debt collector within 30 days ofthe contact. many consumers are not aware of that, and many debt collectors, if yougo outside that 30-day period, will refuse to provide the information.
so it's a difficult issue. it's really important.i mean, we have seen cases where a consumer—multiple parties try to collect the same debt for theconsumer, and so its' important that the consumer be able to verify that the person contactingthem actually has the right to enforce a debt, and it's not just a—you know, it's not just—it'snot just for show to make them prove that. it's a really important thing that beforesomeone makes a payment on a debt, that they're assured that the person they're making thepayment to is the one to whom they may owe the money. corey stone: thank you. steve antonakes: that's wonderful. so i willbegin the lightning round. i will have one
question that i'll ask of all the panelists.i'll ask for the consumer representatives to respond first and the industry representativesto follow, and the question is this. if you were advising a consumer who wanted to resolvea debt, what is the one thing that you would recommend that they would do, and what isalso something that you would tell them to be cautious about? so just one more time,since i'm going to ask everyone to respond. advising a consumer who wants to resolve adebt, what would you recommend that they do, and what would you recommend that they becautious about? daliã©, we can start with you, if you like. dali㉠jimã‰nez: okay. well, i guess it dependson where, the stage at which the debt is at,
but let's pretend that it's early on, andthey have just gotten a letter or a call. i mean, the question corey just asked is critical,make sure that this is the party that if you do believe you owe this debt that you shouldbe paying and get that. the letters that the cfpb has just put on their website actuallywould help with that, at the very least, to get the consumer to say the right words andto feel like they have confidence to do that, to request information that would validateor verify that this is the right creditor, and be cautious both of that and of the amountthat you are being asked to pay, even if you believe, yes, i did have such a debt and ididn't actually pay it, make sure you get verification that the amount you are payingis, you know, the correct amount.
steve antonakes: thank you. frank? frank d'alessandro: i think it would be—toadd to that, it would be helpful to contact, to get some legal help, you know, to consultthe cfpb website, to consult like pine tree legal assistance website, to speak to an attorney,and not just assume that just because someone has contacted you that you owe the debt, especiallyif you don't feel like you owe the debt. if you feel like it's the wrong amount, you feellike you never had the credit card in the first place, or you never heard of this personor this debt collection agency who's contacting you and trying to collect the money, it'swithin your rights, and there's nothing wrong about contacting, requesting the informationyou need from the debt collector, for them
to show you that they in fact own this debtthat they are trying to collect. alexis iwanisziw: yes, i would echo what'salready been said, especially about seeking free legal assistance or free financial counseling,if it's available. and i would also just point out that a lotof the debt that we see that's charged off by banks is debt that they've sold for pennieson the dollar with very little documentation. so the banks aren't held accountable for thatdebt, and the collectors who are trying to collect on that debt are doing so with verylimited information and sometimes don't have sufficient proof and therefore rely on rob-signingand other abusive tactics when bringing lawsuits. so people should just be aware that that'sgoing on as well.
steve antonakes: okay. anything you'd wantto add about anything consumers should be particularly cautious about in addition tomaking sure they take the steps to verify that the debt is correct? alexis iwanisziw: just also being aware oftheir rights around exempt income, that social security, unemployment, many sources of incomeare protected from debt collection, and people should also think about prioritizing debtsand making sure they don't agree to settlement agreements that will not allow them to paytheir rent, pay their bills, put food on the table, and they can prioritize those thingsabove. steve antonakes: great. thank you. patrick?
patrick morris: yeah. as was mentioned inthe director's remarks, you have to communicate. avoiding a letter or not taking the call won'tmake that debt disappear, and by communicating and talking to the collection agency, youcan pay the debt. you can verify the debt. you can confirm whether or not they have reachedthe right person, and, of course, as has been mentioned, it gives you the ability to notifythe agency if you dispute it, which then by law the collector must inform you of yourrights. steve antonakes: great. thank you. joann? joann needleman: thank you, steve. your questionraises a good point, especially from the perspective of my members as attorneys. it's hard forus to advise consumers because we represent
the client. so we have to be very, very careful,and question like that really ids the conflict that attorneys have in the debt collectionspace, is that we have a professional obligation to properly and zealously represent our clients,but at the same time, we have to give tremendous deference to consumers, especially if theyare not represented. so i'm happy to say that i agree with someof the points that the consumer side is making. i do agree that if you have free legal servicesavailable to you when you're discussing the settlement of debt, absolutely go seek thoseservices. i think that they can provide some excellent counseling. and i also agree that when a consumer is confidentthat this is their debt and this is their
obligation and they want to pay it—and wehave this on our tips on our website—only agree to what you can afford. do not enterinto an agreement that you can't afford. that's not going to resolve the issue. o, again,the prioritization, the understanding of what your priorities are, your rent or whatever,after that really look at what you have and make a settlement. you would be pleasantlysurprised that even a small commitment a month, even if it's small, would be acceptable tothe majority of responsible and ethical debt collects. steve antonakes: great. thank you. corey stone: than you do our panelists, joannneedleman, patrick morris, daliã© jimã©nez,
frank d'alessandro, and alexis iwanisziw.this concludes the panel portion of our public hearing, and we ask our panelists to acceptapplause from the audience and leave the stage. richard cordray: zixta, as they are leavingthe stage and before we start with the audience portion, there were two points came up inthe discussion, i just want to emphasize. the first point is why it's very important,as was noted, for a consumer to actually communicate with the collector, and that's because thereis a certain amount of communication that occurs that is completely illegitimate. itis not an actual debt collector. it is somebody who is a fraudster or a scammer imitatingor mimicking a debt collector. around every financial services industry or practice thatwe have seen, there is a fringe element of
scams and frauds that exist. it happens withmortgage servicing, it happens with debt collection, where people will simply be communicatingwith completely phony things just to see what kind of money they can get. so that's anotherreason. and both legitimate debt collection companies and consumers are victimized bythat practice that pollutes otherwise normal communication. the second point is one that i really didn'tcover adequately in my remarks when i talked about our consumer complaint database. notonly is it a method of resolving complaints, but it also is—we've done something somewhatunusual, which is not unprecedented in the federal government, but we've opened up ourdatabase to be accessible to the public. so
once we go live with debt collection complaints—andthere's a bit of a lag, maybe a 30-day lag as we go through the process and resolve individualcomplaints—they will be logged into the system, and you will be able to help yourselfto take a look at what kind of complaints are being registered there, which ones arecoming from maine, which ones involve which companies. and the point of that is that notonly as i said are complaints very useful to us in doing our work, but we think thataccordingly, they probably will be very useful to consumers, and we have heard that thatis so, and to companies to know what's going on, know what their competitors are going.so we do invite you to make use of the consumer complaint database, not only about debt collectioncomplaints, but all the others that we take
that may be helpful to you if you're consumeradvocates working and advocating for consumers are public officials and as industry, as you'retrying to understand what's happening, and how you compare. maybe you compare favorablywith your competitors in terms of your responsiveness and your speed, and if so, you should feelfree to brag about that. that's a good thing. zixta q. martinez: great. now it's time tohear from audience participants here today. our audience includes community leaders, advocates,industry representatives, and, of course, consumers. the open mic portion of today'sfield hearing is an opportunity for the cfpb to hear from you directly, to get your perspectiveon today's discussion on debt collection, but also to hear from other consumer financetrends and practices in your community and
in maine. each person will have about 2 minutes forcomments, and what we hear from you is invaluable. it is part of how we take in new, fresh information.we want to hear from as many of you as possible. so i encourage you to please observe the timelimit, so that as many folks has signed up to share their observations have the opportunityto do so. so, with that, let's get started with staterepresentative jane pringle. representative pringle, you will soon get a mic. jane pringle: thank you very much. i am heremore to listen and learn, although one of my questions relates to the responsibilityof the lender in the first place of making
sure that the person they are loaning moneyto can pay it back. it seems to me watching the financial crisis, i kept wondering howpeople were able to buy these homes. i knew how much i made and how much i could affordto borrow, and it seemed like loans were being made in astronomical amounts to people whodidn't have income or assets. so we didn't hear about that. is there any effort to lookinto that or improve, or is that part of dodd-frank and not related to what you're doing heretoday? zixta q. martinez: thank you. you just threwa softball question at us. we have spent the first couple of years at the bureau engagingin mortgage market rulemaking, specifically around title 14, that creates ability to repayrequirements designed to get both generally
and specifically at precisely that issue. you're right. in the run-up to the crisis,loans were made without regard to ability to repay in many instances. dodd-frank actdid address that, and we hope that we have created the kind of framework that will encourageresponsible lending attuned to ability to pay and make it a little tougher for the dishonestoriginators that led up to the crisis. thank you. laura buxbaum. laura buxbaum: i think i signed up last andget to speak second. this is great. thank you so much, director cordray, and allof the cfpb staff for coming here to maine.
this is just wonderful to have you here andtelling us what you're up to and listening to consumers and others from maine. i work for costal enterprises, incorporated,cei. we are a nonprofit community development financial institution based in wiscasset,maine. we are a hud-approved housing counseling agency. so my experience and comments havemore to do with mortgage lending and foreclosure prevention than with debt collection, perse, although obviously they're related. i wanted to comment on two things. one isthat i understand the cfpb has recently instituted a consumer financial civil penalty fund, andthat i've missed the deadline for your comment period, but i wanted to say thank you fordoing that. i think it's a great idea, and
to reinforce the comments that i believe youreceived from the national housing resource center, this is a fund to help recompense—orto be held for victims, but if victims can't be found, then the funds will go into a poolthat can be used for financial literacy and consumer education, as i understand it. andi wanted to urge you to also create as large a pool as possible and to include one-on-onecounseling in the allowable activities that you would fund, to include hud counselingagencies like mine as eligible recipients, and to think about a range of organizationsthat could be recipients, including hard-to-reach populations, the ones that serve hard-to-reachpopulations, limited english proficiency, and rural. we serve a rural population here,and that's really important.
so i also wanted to say that i appreciatethe new rules that i saw on your website that will require counseling for high-cost loans.i think that's going to be in force in january of 2014. i'd like to ask you to do what you can. idon't know what is within your power to do, but to work with hud and others to find waysto incentivize support and even require housing counseling for other borrowers, borrowersthat may be putting down low down payments or that may be less than perfect credit andmaybe others, because our experience is that consumers who receive either homebuyer educationor one-on-one counseling, or both, become responsible homebuyers, don't fall into someof the traps of predatory lenders, and not
just predatory lenders, but just don't fallinto traps of borrowing more than they can afford, understand being responsible homebuyers. so those are my two comments. thank you verymuch. zixta q. martinez: thank you, ms. buxbaum,and thank you for the work that housing counselors do around the country. it's very importantwork. it's front-line work. we know how difficult it is, but it is of great benefit to the consumersthat you serve. we received the comments from the nationalhousing resource center. we meet with them frequently, and they have been an invaluablesource of important information, as we have worked toward putting together the civil penaltyfund, and we will certainly take your views
and suggestions into consideration in thatprocess. thank you. steve parker. steve parker: good afternoon. thank you, andthank you for all the panelists and you for coming. my name is steve parker. i'm an attorney,a collection attorney with daggett & parker. i'm a member of narca as well. narca was representedon the board—on the panel, rather. i just wanted to make two brief statements.one, that, of course, that was said, the number of complaints clearly doesn't necessarily—that'sthe number of problems. in nearly 25 years of being a collection attorney, i've had severalcomplaints with in fact will lund's office. they've always been resolved, and not becauseit's been a problem that something has been
done wrong. it's because someone didn't understandthe process. for example, someone had a court order for a payment. their paycheck was garnished,and they thought this was a terrible thing to do, but they just didn't understand theprocess. so not all—not all complaints, of course, equal a problem, equal somethingthat someone has done wrong. very often, it's something that people don't understand theprocess. also, i believe it was director cordray hadmade a comment that it shouldn't ever be personal. i actually disagree. it should always be personal.every collector, when they are doing the collections, should know the information from the debtor,what's going on in their life. especially when they are dealing with the debtor, workingon a collection, everything that debtor is
going through is personal to them, and it'simportant to what can be done to the situation, how it can be resolved. an awful lot of debtcases cannot be resolved. people don't have the money. it doesn't mean it's not owed.they just don't have the money, so it can't be resolved. but all those things are verypersonal. so it's really always personal. it certainly should never get out of line,and the fdpca clearly should always be followed. the very last thing is that another commentsaid those collectors who are treating the consumers fairly have nothing to worry about,and, unfortunately, especially with attorneys, that's not always the case. there is a smallgroup of people who are disguised as consumer advocates, and we're not talking about thefrank d'alessandros and the will lunds of
the world. we are talking about people whoset up practices, who go after very minor technical violations of the fdpca, which isreally something to be concerned about because what it does is it pushes a large number ofcollection matters into litigation where it doesn't need to be. zixta q. martinez: thank you, mr. parker.you make some fair points, and we certainly take them into consideration and appreciateyour participation today. renee dillard. [no response.] zixta q. martinez: diane cipollone.
diane cipollone: i am diane cipollone, thedirector of training at the national fair housing alliance, known as nfha, which isheadquartered in washington, d.c. nfha is also a member of a large consortium of consumeradvocates known as the americans for financial reform. on behalf of nfha, i would certainly liketo applaud the bureau for the announcement today that you will be using your rulemakingauthority under udaap to close an enormous loophole in the fair debt collections practicesact; that is, that it does not apply to the original creditor collecting his own or herown debts. in your opening remarks, dr. cordray, youstated that your new rulemaking under udaap,
you will be addressing the issue of the integrityof the information and the data relied upon by creditors. this recommendation, we're veryglad to hear this because this recommendation was also in a letter recently to you of may17th from afr, also urging the bureau to use its authority to make sure that all collectorshave correct and accurate information on the particular debt. requiring that data and information travelfrom one collector to another if the original collector is unsuccessful and the debt isclosed would be a very, very strong consumer protection, akin to mortgage loan servicingwhere one servicer then transfers—the servicing is transferred. all the information travels,and the homeowner under—excuse me—the
debtor in this case would understand, "well,who are you now? i've never heard of you." so that if all of the information requiredto be tracked as between the buyers of these debts, then that would go to the issue ofwho does this debtor think is now collecting the debt. is there some chain of authority,so that the person contacting them, the debtor can rely on and say, "yes, you are the personi should be dealing with"? thank you. zixta q. martinez: thank you, ms. cipollone. jim devine. jim devine: hello. my name is jim devine.i'm an advocate with homeless voices for justice, a public resource center, and i also havea consumer seat on the board of directors
of pine tree legal. and, you know, i would like to express myappreciation, first and foremost, to the city of portland to honor their commitment to provideemergency shelter to everyone who needs it, which the numbers is getting greater and greater,and the overflow is going into the overflow. and it's a distressing situation. i meet a lot of people. people are there fora variety of reasons. i know of one individual, an older person from upstate maine, who losthis farm because of foreclosure, you know, and a variety of people, a number of debtorsare there for a variety of reasons. i think i really appreciate this forum here,coming here, cfpb and all they do, and i appreciate
what pine tree legal does. i know that pinetree legal, because of resource problems, can only help about 20 percent of the peoplethat ask for help. so as far as the solution to this is concerned, from my perspectiveand doing the outreach that i do, i think the more education that can be done to people,to consumers, to that they know their rights and where they stand, what they can do abouttheir problems, so they don't just throw up their hands and go occupy the shelter, youknow. any hints or clues or opportunities to put the good word out that people havetheir rights would be much appreciated, so thanks for the time. zixta q. martinez: thank you, mr. devine.thank you for your comments and for the work
that you do to help people. lynn bromley. lynn bromley: hi. i'm lynn bromley. i am theregional advocate for the sba's office of advocacy, and i just want to say thank youfor being here today. just a couple of quick things. one is we allknow lots of small businesses use their credit cards to finance what they do. so the debtcollection issues have a huge impact on that economic drag, want you to pay attention tothat. and also when the net gets cast and people get pulled into the net, you talkedabout the difficulty in protecting consumers, but also acknowledging that the vast majorityof the businesses practices are sound, that
where that net has gotten too wide, i hopeyou will hear from some of the people here today to let you know that, because that alsohas a big drag in the economy. so i'll defer the rest of my 2 minutes toa consumer maybe that has had a bad debt collection experience, and i hope that you get to hearthat. thanks. zixta q. martinez: thank you, ms. bromley. claude morgan. claude morgan: thank you. i want to thankthe panel. very instructive afternoon and interesting information. i will just say that if we're talking abouta dispute process between the debtor and a
collector, there is a model that exists rightnow for folks to dispute their credit reports and information in the credit reports, andthat's through the e-oscar system. that allows an electronic portal for both the consumerand the lender to clarify and to make accurate information. it seems to me that you mighttake a peek at that model. it may be ready-made for this dispute process that you're talkingabout. it certainly keeps the clock ticking, and it keeps folks responsible. zixta q. martinez: thank you, mr. morgan. carol mccracken. zixta q. martinez: anthony armstrong.
anthony armstrong: thank you very much. thanks.my name is tony armstrong. i am chairman of the legislative committee for the maine associationof mortgage professionals. i'm involved in the board of directors of that associationand its predecessor organization, the mba of maine, for over 25 years. and i've beenin the mortgage banking industry in maine for about the same amount of time. i own amortgage corporation, which is a small mortgage lender, resident here in portland, and itserves the entire state of maine. i'm also an attorney. so i guess i would say that iprobably take a little more interest in the debt collection process, both on behalf ofmy customers and as a public policy matter than maybe some people might because i tendto get into the weeds a little bit along with
some of my friends in the legal community. i had some prepared remarks here, considerableprepared remarks, but i am going to just kind of skip over that. first of all, i'd liketo thank you very, very much for coming to maine. it really is an opportunity for northernnew england to speak directly to the folks at cfpb, and we really do appreciate it. secondly, we really appreciate the fact thatyou are focusing on this very important area to the mortgage banking industry and to consumers.what we find is that we kind of—the people in my organization who i have talked to aboutthese issues, we tend not to be so focused on the debt collector and how he treats theconsumer on the front end or the contact and
the days of response and all that. what wefind where the rubber meets the road is, when someone applies for a loan and unbeknownstto them, their credit score comes in lower than they expect, and they either can't getthe loan or get involved in a process that i'll explain in a minute, that's where weget involved. so our focus is kind of interacting and helping the consumer interact with thedebt collector midstream, so to speak, and oftentimes i find that the system is set upso that basically the debt collectors particularly on small debts won't be harassing or callingthe consumer. they just sit and wait until the apply for a loan, and then the consumercomes to them. that's sort of the automatic aspect of all this.
so what's happened in our situation, my fellowassociates in the mortgage banking industry and in the banking industry which also hasmembers in our organization, along with credit unions, is that we are dealing at that stageof the game with fico scores and what happened and why is the fico score lower and how didthis all happen. what i want to do for a second is digressand make it very clear to people how things have changed in the last 2 years with ficoscores when it comes to mortgages. obviously, we all know fico scores have become more andmore important over the years, but in the last couple of years, fannie mae and freddiemac, for reasons we can probably all understand in another seminar, decided to adopt risk-basedpricing grids, and basically, what they are
looking for is a higher payment from peoplewho are higher risk on a loan for a new home or for refinancing. and if you're familiarwith these grids—i can provide them, but basically, they're asking for a higher upfrontdiscount charge for the loan when you have a lower credit score, lower fico score, anda higher loan-to-value ratio. and this thing can be significant. the break points are 20 points on your ficoscore. so if your fico score is 2 points lower or even 1 point lower than it might otherwisebe as a result of a debt collection error or some kind of error on your credit report,what we found literally, it can change your pricing on your loan by up to 1.75 percenton that grid. so if you have a $200,000 loan,
all of a sudden, we're telling you that ifwe can't help you resolve this problem on this debt collection matter which you dispute,you are going to have to pay $3,500 more to get this loan or pay—if you understand thediscounting system—or pay up to three-eighths of a percent higher on your rate. so thisis a significant factor in who has been able to refinance and how much refinancing hasbeen able to occur to help people reduce their mortgage payments and to help move our economyforward because people are spending less on mortgages. so i want to just—if people really appreciatethe significance of one mistake in the debt collection process. that's my major pointthere.
i'm going to make three quick points. i'llavoid going through the list of the kinds of things that happen to people, but i canassure you that i've had people who withdrew from their exercise club that's associatedwith a national franchise, and the guy in their exercise club forgot to take them offthe list. they had a credit card hit for 30 bucks for a month. they didn't know. it wentinto collection, and all of a sudden, they're looking at me, and i'm telling them if wedon't resolve this problem, you're going to pay 1,500 bucks more for your loan to getrefinanced. zixta q. martinez: mr. armstrong, we'd behappy to take your written comments. anthony armstrong: yes. i—
zixta q. martinez: i really appreciate yourparticipation. anthony armstrong: i do appreciate that. i want to make three suggestions. first ofall, i didn't really get a close look at the new portal, but i really, on behalf of myassociation, appreciate the fact that you're making that effort to make it easier for consumersto communicate. secondly, i hope the portal is focused, isbroad enough so that people that are in the situation that i am describing downstreamcan make that complaint, it's not just an upfront, you know, "i'm getting harassed bya credit collector type of complaint." so i hope the portal makes it easy for peopleto talk about the kinds of things that i'm
talking about. i expect it probably is. secondly, i think that one of the things youmight think about is what i would call a reverse tape-recording system because a lot of consumerscomplaint to me about how they're being treated over the phone by debt collectors, and i knowthat the credit card companies love to tape-record things. fine. richard cordray: sir, there are a lot of otherpeople who want to speak here as well. you can talk to a member of the bureau outsideof this particular public forum. if we have time at the end, we can come back to you.thank you. anthony armstrong: i want to make one more,one more recommendation.
richard cordray: no. thank you. we'll go toothers, and if there's time, we'll come back to you. thank you. zixta q. martinez: thank you, mr. armstrong. kenneth wilson. kenneth wilson: thank you. i appreciate thatyou've come out to the great state of maine and had a forum here. there were just a coupleof comments that i—or issues that i wanted to make, some of which were already addressed. with respect to the portal, i think it's importantthat, as i believe mr. parker pointed out, that there be some mechanism somewhere downthe line where there's a sorting out of what
are truly complaints regarding treatment ofconsumers versus what are concerns of consumers but that don't rise to the level of a complaintregarding the collection activity. i think that would give you more valid statisticalanalysis on those things. secondly, it was interesting to hear todaythat the cfpb has put out some action letters for consumers. as a member of the debt collectionindustry, i know that we for years had asked the ftc if they were willing to put out someguidance for our industry, particularly around the g notice, and it would be i think usefulto members of our industry if the cfpb would consider making some standard language thatwould adequately give consumers notice of their debt validation rights, while at thesame time protecting members of our industry
from technical violations. finally, to put i my 2 cents, i run a lawfirm in massachusetts that does debt collection. the question was asked by, i believe, mr.stone of members of the panel of whether or not a debt collector can provide informationregarding the impact of paying debt on someone's credit information or credit score. from myown experience, the types of information that i get, i don't think it's possible. we have a strict policy in our office thatwe do not talk at all about credit reporting or effect on credit score because, frankly,we're not experts in that area. how would i know? thank you very much.
zixta q. martinez: thank you, mr. wilson. sandra cloutier. sandra cloutier: i work at a credit unionright here locally in p:ortland and west burke, and i'd like to make a statement on the mortgage-relatedrules. in 2013, the cfpb issued final rules regardinglenders, including credit unions, to determine whether a borrower has the ability to repay.we do this already, so, you know, we don't feel that obviously this is a problem. however,the rule also sets forth strict definition of a qualified mortgage, to include a 43 percentdebt-to-income ratio and 3 points in fees limits. the rule is designed to offer consumersbasic protections, a concept that we all agree
on and deserves serious scrutiny. in addition to that regulation, the cfpb hasissued a number of other mortgage-related regulations, including rules on mortgage servicing. in our opinion, this has not been fully consideredas the unprecedented burden and impact these regulations place on many credit unions. thecfpb rules, in your own words, are significant, complex, and intertwined. on the originationside, doing mortgages that are not qualified mortgages will be riskier and likely morecostly. so a credit union such as mine may not find the risk to be justified or worthwhile. on the servicing side, servicers would haveto adjust their current practices through
gap analysis, capacity analysis, adjustingpolicy and procedures, upgrading it infrastructures, training, staff, and development of new formsand compliant process. these changes will have enhancements and a major impact on smallerorganizations and the demand to increase staff in order to maintain compliance with overwhelmingchanges set forth. zixta q. martinez: thank you, ms. cloutier,and thank you for giving us the opportunity to encourage credit unions to visit our regulatoryimplementation webpage. we have engaged in robust conversations with credit unions aroundthe country to ensure that we understand their business operations and the impact to theircompliance and legal systems, and we agree with you. credit unions were not part of thelending that led to the crisis. we're very
sensitive to that, and we are very closelymonitoring the impact of the mortgage markets on small businesses like credit unions. thankyou so much for raising that. richard cordray: let me ask you two questions,miss. what's the size of the assets of your credit union? sandra cloutier: 2 1/2 million. richard cordray: 2 1/2 million? okay. andthe loans you're talking about, do you sell them in the secondary market to fannie andfreddie or fha, or do you keep them in portfolio? sandra cloutier: currently in portfolio. richard cordray: okay. those are all qualifiedmortgages under our rule. so there's not a
mortgage you're making that won't be protectedwith the highest status of protection here, and mortgages you service, you service fewerthan 5,000 mortgages? sandra cloutier: yes, we do. richard cordray: so you're largely exemptfrom many of our servicing rules as well. so, anyway, take a look at our page. we'retrying to get word out through the associations about the actual impact of these rules. ithink some of the anxieties which existed initially, and we understood, have turnedout to be substantially overblown, but we want to make sure that everybody understandsthat carefully. thank you. sandra cloutier: thank you.
zixta q. martinez: joanna murphy? zixta q. martinez: that concludes the fieldhearing on debt collection in portland, maine. thank you, everyone, for joining us here today.what you have to say to us is very important. we take it to heart, and thank you to thosewho viewed by livestream.
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