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Breaking News

Hunstein Decision Not Final for All Other Circuit Courts Pending Possible R…

Steel Rose

The 11th Circuit Court of Appeals is withholding issuance of the mandate in Hunstein v. Preferred Collection and Management Services, Inc.as of June 14, 2021. Therefore the Hunstein Decision is not final in all other circuit courts pending all 12 of the 11th circuit judges determining if they will rehear the case...

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The Bottom Line

Product Spotlight

CSS Product Spotlight

Henry Gardner

CSS, Inc., a leading provider of enterprise class accounts receivable management and financial software offers a broad portfolio of platforms & solutions. CSS enables companies to transition their legacy revenue & payment management systems to a modern, cognitive, centralized, cloud-based Financial Ecosystem®. CSS may be utilized to provide business financial...

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Skip Tracing Advisor

Developing a Network of Closed Sources by Ron Brown, Skip Tr…

Ron Brown

As we begin this article it is very important that the professional tracer clearly understand what constitutes a “CLOSED SOURCE”, the value of a closed source network and the obligation due to each closed source. Definition: CLOSED SOURCE… sources of information with restricted access and information available only through mutual information...

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Collection Software Roundtables

Shielding Collectors From TCPA and FDCPA Violations

Joshua Fluegel

The demands of regulators lead collection professionals to collect debt with the credo of “as little contact with the consumer as possible.” Every eliminated encounter with a consumer while the payment is still being collected is one less chance for a TCPA or FDCPA violation. For this reason many accounts...

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Feature Stories

Hunstein on Rehearing – Revisiting Article III Standing in t…

Eve Cann and Jonathan Green

On April 21, 2021, the Eleventh Circuit Court of Appeals issued its decision in Richard Hunstein v. Preferred Collection and Management Services, Inc., and potentially created a new claim under the Fair Debt Collection Practices Act (FDCPA) – ruling that a debt collector's sharing of information with a vendor is a violation...

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Collection Agency Advisor

The Secret to Excelling in Profit AND Performance

Gordon C. Beck III

To each their own. That’s what I keep telling myself when discussing with my competitors what their strategy is to run and operate a successful collection agency. Everyone’s outlook is different, but the same. Sure, everyone wants to be a top agency, that’s what everyone is supposed to say. But...

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Legal Collection Advisor

Executive Orders Impacting Collections

Michael Starzec

No, this is not a review of the 1996 thriller starring Kurt Russell, Halle Berry and Steven Seagal but it does focus on the prestige of the word “Executive.”   At hotels and sports arenas, you want the executive suite. In Illinois, at least a 1,000 corporations integrate “executive” into their...

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Collection Industry Advisor

3 Options to Offer During Tax Season

Nick Jarman

When it comes to collecting debt, tax season is without argument the most profitable season of the year. Tax season starts at the beginning of February and wraps up in early May. February generally sees the highest return and slightly tapers off each month thereafter. One issue that can ease...

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Compliance Advisor

PCI Compliance, SOC, and HITRUST

Debra J. Ciskey

With the June, 2019, disclosure of a data breach at AMCA looming large in the rearview mirror, debt collectors both large and small are scrambling to verify the security of their consumer portals and their consumer information in general. With numerous vendors and auditors serving the industry in this key...

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Kanye West and the CFPB

  • Written by Michael L. Starzec

starzec michaelAmericans always love a redemption story, especially where the party seeking forgiveness is a celebrity. For example, to this day, Kanye West is vilified for stepping on Taylor Swift’s moment at the 2009 MTV Video Music Awards. Notwithstanding, recently, despite having married a woman who became famous under the worst of circumstances, Kanye has literally found religion, leading revival meetings around the nation and having expressed contrition to the Swifties. As a sure sign of his sincerity, he has even suggested Kim dress less suggestively, which surely cuts against their bottomline. Now, if you are wondering how “Keeping Up with the Kardashians” intersects with collections, you need only refer to a Justice Department brief, ostensibly filed on behalf of the CFPB, where the CFPB declared itself unconstitutional.

CFPB Declares Itself Unconstitutional?

This admission against interest was greeted with a range of emotions in the collection universe, from mocking “I-told-you-sos” to utter relief. So is this a Kanye redemption moment? Has the CFPB repented of its extraconstitutional powers? Have they admitted wrongdoing in seeking liability for actions never determined illegal? More importantly, will the CFPB now rely on input of both creditor and consumer advocates?

Hardly. As always, the devil is in the details.

Having read the decision, the CFPB is not advocating to decommission itself like an unwanted nuclear reactor. In reality, it suggests a modified version of the Queen of Hearts from “Alice in Wonderland” combined with the Hydra – off with its head – and then replace the single head with several more.

It all started when a collection firm sought writ of certiorari to the U.S. Supreme Court appealing a lower court’s finding the CFPB’s structure constitutional, thereby allowing the CFPB’s Civil Investigative Demand (CID) against the firm to proceed. The firm had argued that the CFPB’s single director, removable only for “inefficiency, neglect of duty or malfeasance” violated the separation of powers of the Constitution. Surprisingly, the DOJ filed a brief in support of the writ, arguing that the President is constitutionally bound to ensure the laws are faithfully executed, so that the President’s abilities to appoint, oversee and remove executive officials were all essential to fulfill that duty. The brief also disagreed with the lower court’s finding that the CFPB’s structure was analogous to that of the FTC because both the FTC and CFPB directors were removable for cause. According to the DOJ, the CFPB, prosecutes and investigates, i.e. executive powers, while the FTC is a board with quasi-legislative and judicial powers, with staggered terms, assuring a more bi-partisan, collaborative policymaking body. Staggered terms allow Presidential appointment to the FTC which contrasts with the CFPB whose director actually serves longer than a President, shielding them from the electorate.

Part May Remain

However, the CFPB’s end is not nigh. The Credit Card Accountability Responsibility and Disclosure Act (CARD Act), consistent with precedent, explicitly allows that if one part were found unconstitutional, the remainder of the Act would survive. Importantly, the brief did not question that CIDs were constitutional because Congress can delegate its subpoena powers.

And with all things collection related, there are politics: If the Supremes agree, they punt to Congress to rewrite the Act. Who among us thinks the Democrats and Republicans are going to agree, in an election year, on the CFPB’s structure and let Trump appoint the first commissioners? Even more, imagine if Elizabeth Warren, from whose mind the CFPB erupted, is the President when Congress considers changes? All I can say to that is this: Kanye 2024!


Michael L. Starzec is a partner with Blitt and Gaines, P.C and is vicepresident of the Illinois Creditors Bar. He is a frequent speaker, writer and litigator on creditor’s rights.