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Director of CJ's CAPP Program, Rebecca Coleman, contributes to OSI's Audacious Ideas Blog

Wed, 03 Aug 2011 05:00:00 GMT

Rebecca Coleman, Director of the Credit Abuse Project (CAPP) and a 2010 Open Society Institute Baltimore County fellow has contributed to the Open Society Institute Audacious Ideas blog. Her article, entitled "Make Creditors Prove They are Entitled to Collect a Debt" can be viewed here. Audacious Ideas is a blog that was created to stimulate ideas and discussion about solutions to difficult problems in Baltimore.

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Category: Bankruptcy

CJ Member Peter Holland has published an article titled "The One Hundred Billion Dollar Problem in Small Claims Court: Robo Signing and Lack of Proof in Debt Buyer Cases".

Tue, 05 Jul 2011 05:00:00 GMT

CJ Member Peter Holland has published an article titled “The One Hundred Billion Dollar Problem in Small Claims Court: Robo-Signing and Lack of Proof in Debt Buyer Cases.” Below is the abstract.

ABSTRACT
Recent years have seen the rise of a new industry which has clogged the dockets of small claims courts throughout the country. It is known as the "debt buyer" industry. Members of this $100 billion per year industry exist for no reason other than to purchase consumer debt which others have already deemed uncollectable, and then try to succeed in collecting where others have failed. Debt buyers pay pennies on the dollar for this charged off debt, and then seek to collect, through hundreds of thousands of lawsuits, the full face value of the debt. The emergence and vitality of this industry presents several legal, ethical and economic issues which merit exploration, study and scholarly debate.

This article focuses on the problem of robo-signing and the lack of proof in debt buyer cases. Although this problem has received limited attention from the media and from regulators, there is a paucity of legal scholarship about debt buyers in general, and this problem in particular. This article demonstrates that robo-signing and fraud are rampant in this industry, and that the debt buyers who pursue these claims often lack proof necessary to show that they own the debt, and often lack proof even that a debt was ever owed in the first place. The fact that this lack of proof has led to consumers being sued twice on the same debt demonstrates the due process concerns which are implicated when courts enter judgments against consumers based on robo-signing and insufficient proof.

This article calls on courts to hold plaintiffs in debt buyer cases to the same standards required of other litigants. Courts must require a demonstration of personal knowledge of the matter at issue before any affidavit is accepted, before any person testifies, and before any documents are admitted into evidence.

Click here for the full article.

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Category: Bankruptcy

Category: News

Category: Public Interest Litigation

Civil Justice Submits Comments to the Office of the Comptroller of the Currency Regarding the Proposed Regulations to Implement the Dodd-Frank Wall Street Reform and Consumer Protection Act

Tue, 28 Jun 2011 05:00:00 GMT

   On June 27, 2011, Civil Justice submitted to the Office of the Comptroller of the Currency (OCC) its comments regarding the OCC’s proposed regulatory amendments in response to the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Act was created to address serious problems with how consumers are protected from fraudulent or otherwise unethical behavior on the part of lenders, including mortgage companies. Chief among these problems is the OCC’s 2004 regulation implementing the National Bank Act, which prevented a great number of state laws that protected consumers from abusive lending practices from being enforced against national banks. This preemption of state law enabled national banks to engage in predatory and reckless lending practices and played a direct and significant role in causing the current financial crisis.
   Unfortunately, the proposed regulations do not solve this problem, but rather amount to more of the same. For example, while the Act specifically restricts the OCC’s ability to preempt a state consumer financial law to situations in which such a law “prevents or significantly interferes with the exercise by the national bank of its powers,” the proposed regulations actually retain in all but name the far lower “obstruct, impair, or condition” standard. The proposed amendments also ignore the Act’s requirement that the OCC only preempt state laws on a case-by-case basis, and only after consulting with the Consumer Financial Protection Bureau. Moreover, while the Act prohibits the OCC from preempting a state law unless there is “substantial evidence” that the law “significantly interferes with bank powers,” the proposed amendments would leave much of the 2004 regulatory scheme intact without such a showing.
   Far from correcting the significant problems that the Dodd-Frank Act was intended to address, the OCC’s proposed regulations would result in national banks remaining immune from broad areas of state consumer protection laws, leaving them free to continue their dangerous practices. This would be a disaster for consumers. In our comments, Civil Justice proposed several changes to prevent this result. First, we proposed that the regulations emphasize the limited scope of the National Bank Act, and make clear that it does not apply to state laws regulating foreclosures or unfair and deceptive practices, which generally apply equally to all commercial transactions. Second, we proposed that the regulations make clear that the National Bank Act does not enable national banks to skirt state law when they purchase assets or liabilities from state-regulated entities to which state unfair-and-deceptive-practices laws apply. Third, we proposed that the regulations take such steps as are necessary to prevent the abuse of the National Bank Act by national banks that have been using it as a loophole. Lastly, we proposed that the regulations make clear that the National Bank Act’s protections do not extend to buyers of toxic assets, for whom these protections were not intended to apply. We hope that the OCC will seriously consider our proposed changes and rectify the serious deficiencies in its proposed regulations. Otherwise, the Dodd-Frank Act will someday be remembered as a lot of “sound and fury, signifying nothing.”

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Tags: Dodd-Frank Wall Street Reforms,Office of the Comptroller of the Currency

Category: News

Category: Public Interest Litigation

"Hot Coffee" Premiers on HBO, June 27, 9pm

Tue, 07 Jun 2011 05:00:00 GMT

HBO will be airing an important documentary film about tort reform and its threat to the civil justice system called “Hot Coffee” on Monday, June 27, 2011 at 9pm. The documentary follows four people, including the infamous McDonald’s Hot coffee lawsuit plaintiff Stella Liebeck, whose lives have been affected by their inability to access the courts, and how caps on damages hurt them. The film also examines the role of corporations and a complicit media in promoting tort reform. “Hot Coffee” was a selection of the 2011 Sundance Film Festival. Watch a trailer of the documentary here, and for a review of the movie, click here.

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Tags: Tort Reform,Documentary,McDonald's coffee

Category: Education

Category: News

Category: Public Interest Litigation

Civil Justice Holds First Training for Creditor Abuse Prevention Project

Tue, 31 May 2011 05:00:00 GMT

On Friday, May 20, 2011, Civil Justice held the first attorney training in its new Creditor Abuse Prevention Project (CAPP). Over 30 attorneys attended the full-day training to learn more about bringing creditor abuse claims in Chapter 13 bankruptcy cases. Attorneys were given the option of taking the training for free if they agreed to take pro bono cases as part of CAPP. The morning session of the training focused on three main areas of creditor abuse in bankruptcy. Laura Margulies, of Laura Margulies & Associates (http://www.law-margulies.com), explained the process for filing proofs of claim in bankruptcy and identified common problems that arise in the claims filed by creditors. She also presented sample objections based on common creditor abuses. Professor Peter Holland of the University of Maryland School of Law Consumer Protection Clinic (http://www.law.umaryland.edu), briefly discussed common debt collection violations that can be brought as affirmative claims in bankruptcy. And Scott Borison, of the Legg Law Firm (http://www.legglaw.com/), focused on affirmative claims that debtors can raise against mortgage originators, lenders, and servicers.

In the afternoon, Professor Peter Holland presented an intensive course on defending debt collection suits in state court. He identified common creditor abuses in the state court system and stressed the need for debtors to obtain representation in debt collection actions. He also showed attorneys how they can help clients and earn a living by bringing affirmative claims for debt collection violations under statutes with fee shifting provisions.

Attorneys who attended the training gave it high marks calling it “practical” and “informative.” Many stressed that there was a need for more continuing legal education session like this. One attorney, who had originally registered to pay to take the training, rather than electing the pro bono option, contacted Civil Justice after the event to let us know that he was so impressed by the training; he had decided to volunteer for the pro bono project and become a member of Civil Justice.

For more information about the Creditor Abuse Prevention Project, contact Rebecca Coleman.

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Tags: Creditor Abuse Project,CAPP,Creditor Abuse

Category: Bankruptcy

Category: Education