Possible Changes For Student And Payday Lenders

The director of the CFPB Consumer Advisory Board, Richard Cordray, issued a statement for a meeting of the CFPB, which signals possible changes for student and payday lenders. Towards student loans, Mr. Cordray spoke about the similarities between servicing problems experienced by mortgage loan borrowers and those experienced by student loan borrowers. Student loan sales have the “same problematic [financial] incentive structure” as mortgage loan servicing, because the creditor (not the borrower) hires the servicer. Cordray commented that many consumers are unable “to negotiate for a more affordable payment plan on their loan obligations…even when a modification would make sense for all concerned.”Comparisons between the mortgage and student loan markets were also drawn last year by Rohit Chopra, the CFPB’s Student Loan Ombudsman; it seems likely the CFPB is considering rulemaking to establish servicing standards for student loans. Director Cordray is setting up the framework for CFPB civil investigations and enforcement of servicers of federal and private student loans; welcome news for anyone struggling with their student loan payments.Payday loan and other short-term loan lenders are also high on the CFPB’s list of problem industries; the Director indicated they too will be under increased scrutiny in coming months. Cordray described the rollover on payday loans as creating a “cycle of debt [that] is essential to the business model because they generate “the high fee income necessary to make the economics of the product work and perhaps to subsidize other products.” He added that the CFPB has been “analyzing these situations and determining how to deploy [its] various tools to best protect consumers while preserving access to responsible credit.”If a collection agency has harassed you, you may be entitled to money damages up to $1,000.00, based on the FDCPA, which has been around for almost 35 years. The FDCPA is a federal law that applies to every state. In other words, everyone is protected by the FDCPA. The FDCPA is essentially a laundry list of what debt collectors can and cannot do while collecting a debt, as well as things debt collectors must do while collecting a debt. Plus, the FDCPA has a fee-shift provision. This means, the collection agency pays your attorney’s fees and costs. Founding attorney, Michael Agruss, has settled over 1,500 debt collection harassment cases. We want to help you, too.